2019 (11) TMI 32 - AT - Income Tax

Condonation of delay - delay of 154 days in filing this appeal by the assessee - CIT (Central) Hyderabad invoked the provisions of section 263 and passed an order on 10/03/2015 setting aside the assessment made u/s 144 of the Act and directed the AO to re-do the assessment - assessee stated that he was under bonafide impression that appeal if any would lie when the AO passed an order in consequence to the direction of Ld. Pr. CIT - HELD THAT - Having appeared before the Pr. CIT and filed the details before him and received the order from Pr.CIT what we do not understand is after receiving the order from Pr. CIT why he was not approached the Advocate was not explained before us. He has only approached the Advocate when he received the order passed by the AO u/s 143(3) rws 263 of the Act on 31/12/2015. In our considered the view the explanation offered by the assessee for the delay in filing the appeal is not bonafide and therefore it is not a fit case to condone the delay as the assessee has failed to establish that the assessee is prevented by sufficient cause for not filing the appeal within the stipulated time. Accordingly the appeal is dismissed as not admitted. Unexplained investment u/s 69 - gold and silver articles found in search operation - AO gave credit for gold worth Rs. 26, 40, 468/- (weight of gold 1333.57) treating the same as inherited from assessee s parents and the remaining gold jewellery as unexplained investment - HELD THAT - It is a fact that assessee s son and his daughter-in-law both are working in USA and there is every possibility that out of their earnings they must have brought some gold jewellery. Therefore we are of the view that some more credit should be given to the assessee and accordingly we direct the AO to give credit of gold worth Rs. 24, 00, 000/- to the assessee and recalculate the addition (Rs. 1, 04, 66, 134 Rs. 24, 00, 000) accordingly. Thus ground No. 2 is partly allowed.

Summary

Issues involved:
1. Condonation of delay in filing appeal against order of Pr. CIT (Central) invoking section 263.
2. Assessment of unexplained investment in gold and silver articles by AO based on order of Pr. CIT (Central) under section 263.

Issue 1: Condonation of delay in filing appeal against order of Pr. CIT (Central) invoking section 263:

In the case, the assessee filed an appeal against the order of Pr. CIT (Central) under section 263 for the AY 2011-12, with a delay of 154 days. The assessee requested condonation of the delay, stating that they were under the impression that the appeal would lie after the AO passed an order in response to the direction of Pr. CIT. The ITAT found that the explanation provided by the assessee for the delay was not bona fide. The ITAT observed that the assessee had approached the advocate only after receiving the order passed by the AO, not when the order was received from Pr. CIT. Consequently, the delay was not condoned, and the appeal was dismissed as not admitted.

Issue 2: Assessment of unexplained investment in gold and silver articles by AO based on order of Pr. CIT (Central) under section 263:

The second appeal related to the assessment of unexplained investment in gold and silver articles by the AO, following the order of Pr. CIT (Central) under section 263. The Pr. CIT set aside the original assessment due to lack of documentary evidence regarding the sources of acquisition of gold and silver articles. The AO, after issuing a show cause notice and considering the submissions of the assessee, made additions based on the unexplained nature of the investments. The CIT(A) upheld the AO's decision.

However, the ITAT partially allowed the appeal, directing the AO to give additional credit to the assessee for gold brought by their son and daughter-in-law from the USA. The ITAT found that some more credit should be given to the assessee, leading to a reduction in the addition made by the AO. Additionally, the ITAT directed the AO regarding the charging of interest under sections 234A, 234B, and 234C, as consequential in nature.

In conclusion, the ITAT dismissed the appeal in ITA No. 98/H/16 concerning the delay condonation issue and partly allowed the appeal in ITA No. 513/H/17 related to the assessment of unexplained investment in gold and silver articles.

This detailed analysis covers the issues of delay condonation and assessment of unexplained investment in gold and silver articles as addressed in the legal judgment by the ITAT Hyderabad.