2024 (3) TMI 727 - AT - Income Tax

Condonation of delay - assessee preferred an appeal before the CIT (A)-NFAC belatedly with a delay of 895 days - sufficient cause to condone the delay or not? - HELD THAT - There is no representation on behalf of the assessee to represent the assessee s case and to explain the sufficient cause to condone the delay caused while filing the appeal before the CIT(A)-NFAC. It is a settled principle that the burden heavily lies on the assessee to explain the sufficient cause which prevented the assessee to file an appeal within the prescribed time limit. As per section 5 of the Limitation Act, 1963, any appeal or any application, may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period. It implies that the delay of each day needs to be justified and there must be sufficient cause for not preferring the appeal which is lacking in the instant case. Hon ble Supreme Court in the case of Ramlal vs. Rewa Coalfields Ltd. 1961 (5) TMI 54 - SUPREME COURT has held that the cause for the delay in filing the appeal which by due care and attention could have been avoided cannot be a sufficient cause within the meaning of the limitation provision. Where no negligence, nor inaction, or want of bona fides can be imputed to the appellant, a liberal construction of the provisions has to be made in order to advance substantial justice. In the present case, the assessee took more than two years to file the appeal before the Ld. CIT(A)-NFAC. But, the assessee has not given any plausible reasons before the CIT(A)-NFAC which constitutes a sufficient cause to condone the delay. Considering these facts and circumstances of the case, CIT(A)-NFAC has rightly dismissed the condonation of delay petition filed by the assessee - Appeal filed by the assessee is dismissed.

Summary

Issues:
The appeal against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi under section 144 of the Income Tax Act, 1961 for the AY 2017-18.

Delay in Filing Appeal:
The assessee filed an appeal before the Ld. CIT (A)-NFAC belatedly with a delay of 895 days. The Ld. CIT(A)-NFAC concluded that the delay could not be attributed to any reasonable cause other than negligence and deliberate inaction by the assessee. The reasons provided were deemed insufficient, leading to the dismissal of the appeal. The Tribunal upheld this decision after considering the principles of the Limitation Act, emphasizing the need for a sufficient cause to justify the delay. The Supreme Court precedent highlighted that negligence or inaction cannot be considered sufficient cause. As the assessee failed to provide plausible reasons for the delay, the Tribunal affirmed the dismissal of the appeal, finding no infirmity in the CIT(A)-NFAC's decision.

Unexplained Cash Deposits:
The case involved cash deposits of Rs. 15,42,000 during the demonetization period. The Ld. AO treated this amount as unexplained money under section 69A of the Act due to the assessee's non-compliance with notices and failure to provide supporting documentary evidence. The assessee contended that the cash deposits were from earlier cash withdrawals and were disclosed under the PMGKY scheme, thus should not be considered unexplained. Additionally, an alternative argument was made to treat the cash deposits as business receipts under section 44AD for taxation purposes. However, since the assessee did not appear during the appeal hearing, the Tribunal proceeded to adjudicate the appeal based on available records. The Ld. DR supported the CIT(A)-NFAC's decision to dismiss the appeal due to the delay and lack of proper explanation by the assessee. Consequently, the Tribunal upheld the order of the CIT(A)-NFAC, resulting in the dismissal of the appeal filed by the assessee.

Conclusion:
The Tribunal dismissed the appeal filed by the assessee against the order of the Ld. CIT (A)-NFAC, emphasizing the importance of providing a sufficient cause to justify delays in filing appeals. The decision to treat the cash deposits as unexplained money under section 69A of the Act was upheld due to the assessee's non-compliance with notices and failure to provide necessary documentation. The Tribunal's decision was based on the principles of the Limitation Act and the lack of substantial reasons presented by the assessee, leading to the affirmation of the CIT(A)-NFAC's order.