2020 (12) TMI 335 - AT - Income Tax

Condonation of delay - delay of 158 days in filing this appeal before the Tribunal - HELD THAT - Admittedly, the assessee is suffering from physical disability certified by the Directorate for Empowerment of Differently Abled Senior Citizens, Bangalore. The assessee in the affidavit has stated that he has handed over the papers to earlier counsel who appeared before the CIT(Appeals), who failed to take proper action to file necessary appeal before the Tribunal. Later, he approached the present counsel, Mr. V. Srinivasan, who has filed the appeal within 48 hours before this Tribunal. In my opinion, there exists sufficient reason in filing the appeal belatedly before this Tribunal. Relying on the Hon ble Supreme Court judgment in the case of Collector, Land Acquisition v. MST. Katiji Ors. 1987 (2) TMI 61 - SUPREME COURT we are inclined to condone the delay and admit the appeal for adjudication. Addition u/s 68 or 69A - Deposits into bank accounts - HELD THAT - When the amounts could not have been added under section 68, the Tribunal was not competent to make the addition under section 69A. That being so, when the Tribunal has no power to sustain addition u/s. 69A of the Act, after deleting it u/s. 68, the same is equally applicable to CIT(Appeals) also. He cannot sustain addition u/s. 69A after deleting it u/s. 68 of the Act. The orders relied on by the ld. DR in the case of Anup Sharma 2014 (9) TMI 1185 - ITAT CHANDIGARH and P.V. Ajay Narayan 1996 (7) TMI 172 - ITAT BANGALORE have no occasion to consider judgment of Hon ble Allahabad High Court in the case of Smt. Sarika Jain v. CIT 2017 (7) TMI 870 - ALLAHABAD HIGH COURT - the Hon ble Allahabad High Court judgment (supra) will prevail over the orders of the Tribunal cited by the ld. DR. Therefore, I have not considered the orders of Tribunal relied on by the ld. DR. In light of the above, the addition sustained by the CIT(Appeals) u/s. 69A of the Act is deleted. Appeal by the assessee is allowed.

Summary

Issues:
Delay in filing appeal before the Tribunal, Sustainment of addition under section 69A after deletion under section 68.

Issue 1: Delay in filing appeal before the Tribunal

The appellant filed an appeal against the order of CIT(Appeals) after a delay of 158 days. The appellant cited reasons for the delay, including ill-health due to hypertension, diabetes, and back pain, as well as physical disability and residing far from Bangalore. The Tribunal, considering the circumstances and the physical disability of the appellant, relied on the Supreme Court judgment in Collector, Land Acquisition v. MST. Katiji & Ors. to condone the delay and admit the appeal for adjudication. The delay was deemed justified, and the appeal was allowed to proceed.

Issue 2: Sustainment of addition under section 69A after deletion under section 68

The main issue for consideration was the addition of a specific amount under section 69A of the Income-tax Act, 1961, which was initially made under section 68 by the Assessing Officer. The CIT(Appeals) deleted the addition under section 68 but sustained it under section 69A. The appellant argued that the addition under section 69A was unjustified as it required a mandatory notice under section 251(2) of the Act, which was not given. The appellant relied on a Tribunal decision to support this argument. On the other hand, the Department argued that since there was no enhancement of income and the CIT(Appeals) did not discover anything new, there was no requirement for a notice under section 251(2). The Department cited tribunal judgments to support its position.

The Tribunal analyzed the situation and referred to the Allahabad High Court judgment in Smt. Sarika Jain v. CIT to determine that when an addition could not be made under section 68, it could not be sustained under section 69A. The Tribunal held that the CIT(Appeals) was not justified in sustaining the addition under section 69A after deleting it under section 68. The Tribunal emphasized that the power to pass orders must be confined to the issues raised in the appeal and not extend beyond that. Therefore, the addition sustained under section 69A was deleted, and the appeal by the assessee was allowed.

In conclusion, the Tribunal addressed the delay in filing the appeal and justified its decision to admit the appeal for adjudication. Additionally, the Tribunal analyzed the sustainment of the addition under section 69A after deletion under section 68, ultimately ruling in favor of the appellant based on legal precedents and the specific circumstances of the case.