2023 (7) TMI 461 - AT - Income Tax

Condonation of delay in filing the present appeal by 1241 days - reasons for delay - period of delay comprises of period of Covid 19 pandemic where all activities in the economy came to a standstill due to national lockdown and appreciating the said situation - HELD THAT - The period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation for the filing the appeal and effectively, the said period need not be counted and has to be excluded for working out the delay in filing the present appeal. As far as period prior to 15/03/2020 and post 28/02/2022 till filing of present appeal is concerned, it is no doubt true that the assessee was outside the country and travelling to USA to attend to his family affairs for sufficient long period except for some intermittent period, however, the fact that he was travelling doesn t take away his obligation to attend to the tax proceedings and that too, his own appeal which has been filed before the ld CIT(A). Merely filing the appeal is not enough to seek shelter from the tax obligations or the consequent tax liability. Once the appeal is filed, he is equally required to attend to the proceedings before the ld CIT(A) and/or appoint the Counsel who can seek his instructions and attend to the proceedings and file necessary documentation/submission in support of the grounds of appeal. In the instant case, the appeal was filed on 18/01/2019 and disposed off by the ld CIT(A) on 10/07/2019 and in between, three notices were sent through speed post which remained unattended. Once the appeal has been dismissed ex-parte by the ld CIT(A) due to non-prosecution and his bank account has been attached by the Revenue authorities, the assessee has woken up again and filed the present appeal that too with a substantial delay. We therefore find that there are clearly latches and negligence on part of the assessee in not filing the present appeal within prescribed time frame. At the same time, we believe that where the assessee has come in appeal before this Tribunal, he deserves an opportunity to be heard on merits of his case before the matter is consigned to records.Therefore, in exercise of powers under section 253(5) and in interest of substantial justice, we hereby condone the delay in filing the present appeal subject to cost of Rs 5,000/- which shall be deposited in PM National Relief Fund and evidence thereof should be brought on record. Addition u/s 68 - unexplained cash deposit - As both before the AO as well as before the ld. CIT(A), the additions have been made and confirmed without considering the explanation which the assessee may like to submit in support of the source of the cash deposit in his bank account maintained with Axis Bank. Therefore, in the interest of substantial justice and fair play, we believe that the assessee deserves one more opportunity and the matter is, accordingly, set aside to the file of the AO to decide the same afresh after providing reasonable opportunity to the assessee. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues Involved:
1. Delay in filing the appeal.
2. Merits of the addition of Rs. 49,40,750/- as unexplained cash deposit.

Summary:

1. Delay in Filing the Appeal:
The assessee filed an appeal against the ex-parte order of the CIT(A) with a delay of 1241 days. The delay was attributed to the assessee's frequent travels to the USA to attend to family affairs and his father's illness. The assessee claimed that he was unaware of the CIT(A)'s order due to his absence from India and the non-receipt of the order. The COVID-19 pandemic also contributed to the delay, as the Supreme Court extended the limitation period for filing appeals during the pandemic. The Tribunal acknowledged the delay but noted that the assessee should have attended to his tax affairs despite his travels. However, in the interest of substantial justice, the Tribunal condoned the delay subject to a cost of Rs. 5,000/- to be deposited in the PM National Relief Fund.

2. Merits of the Addition:
The Assessing Officer (AO) made an addition of Rs. 49,40,750/- under Section 144 read with Section 147 due to the assessee's failure to explain the source of cash deposits in his Axis Bank account. The CIT(A) confirmed the addition ex-parte due to the assessee's non-appearance. The Tribunal found that the addition was made without considering the assessee's explanation and set aside the matter to the AO for fresh adjudication. The assessee was directed to provide necessary information and documentation to explain the source of the cash deposits and to cooperate with the AO for timely completion of the proceedings.

Conclusion:
The appeal was allowed for statistical purposes, with the delay condoned and the matter remanded to the AO for fresh consideration. The assessee was instructed to actively participate in the proceedings and provide the required evidence.