Appeal Dismissed: Upheld ITAT's Findings, No Question of Law. Rule of Consistency Applied.

The High Court dismissed the appeal, upholding the factual findings by the ITAT. It was determined that no substantial question of law arose for consideration in the case. The court affirmed the application of the rule of consistency in tax assessments and concluded that the appeal lacked merit, resulting in its dismissal.

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Issues Involved:
1. Delay in filing and re-filing the appeal.
2. Legitimacy of the business activities and income declared by the Respondent-Assessee.
3. Validity of the addition made by the AO on account of unexplained credits.
4. Application of the rule of consistency in tax assessments.

Detailed Analysis:

1. Delay in Filing and Re-filing the Appeal:
- C.M.No.15852/2019 (delay in filing): The court condoned the delay of 70 days in filing the appeal based on the averments made in the application.
- C.M.No.15853/2019 (delay in re-filing): Similarly, the court condoned the delay of 140 days in re-filing the appeal, allowing the application.

2. Legitimacy of the Business Activities and Income Declared by the Respondent-Assessee:
- The Respondent-Assessee filed his ITR for AY 2014-15 declaring an income of Rs. 41,60,010/-. The AO noticed discrepancies such as the business being listed in Mumbai while the ITR was filed with a Delhi address, and the absence of a weighing machine despite trading in fabrics.
- The AO conducted a physical verification under Section 133B of the Act and concluded that the business premises were abandoned, leading to the suspicion of money laundering. Consequently, the AO added Rs. 4,20,62,550/- as unexplained credits.

3. Validity of the Addition Made by the AO on Account of Unexplained Credits:
- The CIT(A) upheld the AO's findings, noting the absence of a weighing machine and other inconsistencies. However, the ITAT overruled this, stating that the AO was not justified in treating the sales as income from unexplained sources.
- The ITAT emphasized that the opening stock, purchases, and sales had been accepted in earlier assessments, including scrutiny under Section 143(3) in AY 2007-08 and AY 2012-13. The ITAT found that the AO's inquiry conducted in FY 2016-17 (post-closure of the business) did not affect the legitimacy of the business activities in FY 2013-14.

4. Application of the Rule of Consistency in Tax Assessments:
- The ITAT applied the rule of consistency, noting that the Respondent-Assessee's trading activities and stock had been accepted in previous years. The ITAT held that the sales made out of the opening stock could not be treated as unexplained income.
- The court emphasized that the principles of res judicata do not apply to tax proceedings, but the rule of consistency is a recognized principle. The ITAT's findings were based on the entire material on record, including the AO's report, and there was no perversity in the ITAT's order.

Conclusion:
- The High Court dismissed the appeal, stating that no substantial question of law arose for consideration. The factual findings by the ITAT were upheld, and the appeal was dismissed.

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