2023 (8) TMI 450 - AT - Income Tax

Condonation of delay - Appeal as time-barred by 246 days - Assessee explained delay was on account of incorrect advice of the earlier counsel appointed by the assessee - HELD THAT - It is a settled principle of law that the Tribunal, u/s 253 of the Act, may admit an appeal, or cross-objection, after the expiry of prescribed period, if it is satisfied that there was sufficient cause for not presenting it within that period. As decided in the case of Smt. Samanthapudi Lavanya 2021 (5) TMI 26 - ITAT VISAKHAPATNAM held that where assessee was under bona fide impression that its appeal had been filed by accountant, but came to know fact of not having filed appeal when there was pressure from department for payment of demand, delay of 492 days in filing appeal was to be condoned, in the interests of justice. Thus in the interest of justice, the delay in filing of the present appeal is being condoned. Assessment order passed by ACIT, Circle 6(1) Ahmedabad u/s 153A - as argued according to CBDT Instruction it is mandatory that search cases shall be centralised in central charges but AO passed assessment order, who is not in charge of Central Range in violation of aforesaid Instruction of CBDT - HELD THAT - It is a well settled law that no person can call in question the jurisdiction of the assessing officer after the expiry of time limit laid down in subsection (3) of section 124 of the Act which ensures that the objection is raised before the assessment is completed. The brief facts of the instant case are that the assessment was completed 31-12-2016 u/s 153A of the Act and the appeal was disposed of by Ld. CIT(Appeals) vide order dated 16-08-2018. However, the assessee now before us vide application dated 17-01-2022 is seeking to challenge the jurisdiction of the assessing officer on the ground that in view of the CBDT Instruction, the concerned officer did not have requisite authority to pass the assessment order Assessee did not object to the jurisdiction of the assessing officer during the course of assessment proceedings and nor any challenge was posed before CIT(Appeals) during the course of appellate proceedings. Therefore, now, after a period of substantial lapse of time of almost 6 years from completion of assessment, the appeal of jurisdiction cannot be raised at appellate stage before us. Accordingly, the additional ground raised by the assessee is dismissed. Additional ground raised by the assessee is dismissed. Unexplained cash credit - Gifts receipts - as per DR amount which was gifted to the assessee from his mother came from a joint account, in which the mother is the primary account holder and the assessee is the joint holder - gift deed was discarded by the assessing officer on the ground that genuineness of the said could gift deed was in doubt - HELD THAT - As what also needs to be seen in the instant facts is that the aforesaid gift deed is also duly supported by bank transfer from the bank account in which the mother of the assessee is the primary holder to the account of the assessee during the year under consideration. Further, the aforesaid gift has not been transferred by way of a single transfer on a single date, but comprises of multiple transfers made to the account of the assessee on various dates though under Gift Deed gives a consolidated figure of these multiple transfers. Therefore, in our considered view, it would not be correct to conclude that the gift deed was an afterthought since the aforesaid transfers were made on dates much prior to the date when the search was carried out at the premises of the assessee and notice under section 153A of the Act was issued to the assessee. We observe that the gifted deed was on a stamp paper and the same was also duly supported by way of bank transfers. Therefore, in our view the assessee has been able to reasonably explain the source of gift from his mother. Decided in favour of assessee.

Summary

Issues Involved:
1. Condonation of Delay
2. Jurisdiction of Assessing Officer
3. Addition under Section 68 of the Income Tax Act

Condonation of Delay:
The appeal was time-barred by 246 days. The assessee claimed the delay was due to incorrect advice from their previous counsel. The Tribunal noted that "sufficient cause" for condonation should receive a liberal construction to advance substantial justice, as per the Supreme Court's ruling in State of West Bengal v. Administrator, Howrah Municipality. The Tribunal also referenced the Mumbai ITAT case of Sterlite Industries (India) Ltd., emphasizing that the length of delay is immaterial if the explanation is acceptable. Given the bona fide reasons presented, the Tribunal condoned the delay.

Jurisdiction of Assessing Officer:
The assessee argued that the assessment order was void ab initio as it was passed by an officer not in charge of the Central Range, violating CBDT Instruction No. 8 dated 14-08-2002. The Tribunal cited several cases, including Bhupindra Food & Malt Industries and Hindustan Transport Co., which held that objections to jurisdiction must be raised within the time limits specified in Section 124(3) of the Act. Since the assessee did not raise the jurisdictional issue during the assessment or appellate proceedings, the Tribunal dismissed the additional ground.

Addition under Section 68 of the Income Tax Act:
The AO observed an increase in the assessee's capital and questioned the genuineness of a gift from the assessee's mother. The AO treated the gift as unexplained cash credit due to discrepancies in the gift deed. The CIT(A) upheld this view, noting the joint account from which the gift was made. However, the Tribunal found that the gift deed was supported by multiple bank transfers made before the search and issuance of notice under Section 153A. The Tribunal concluded that the assessee reasonably explained the gift's source and set aside the addition.

Conclusion:
The Tribunal condoned the delay, dismissed the jurisdictional challenge, and allowed the appeal on merits, setting aside the addition under Section 68. The order was pronounced in open court on 04/08/2023.