ITAT allows appeal, remands income addition issue for reconciliation. Delay condoned due to employee's inadvertent omission.

The ITAT allowed the appeal, remanding the issue of income addition back to the Assessing Officer for detailed reconciliation. The delay in filing the appeal was condoned due to inadvertent omission by the assessee's employee.

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Issues:
1. Addition of Rs.19,55,652/- to the income of the assessee due to difference between sales in profit and loss account and gross services in service tax return.
2. Delay in filing the appeal and condonation of the same.

Analysis:

Issue 1: Addition of Rs.19,55,652/- to the income of the assessee
The appeal was filed against the CIT(A)'s order confirming the addition made by the Assessing Officer. The assessee contended that the difference in turnover was due to changes in service tax payment basis and billing methods. The AR provided details to support the contention that the turnover as per service tax and profit and loss account would naturally differ due to the nature of services provided and tax regulations. However, the CIT(A) rejected the explanation as party-wise details of service tax turnover were not provided. The ITAT noted that while the difference required explanation, it did not automatically indicate lower income offered for taxation. Therefore, the matter was remanded back to the Assessing Officer for the assessee to submit a detailed reconciliation, including party-wise details, to clarify the difference. The ITAT allowed the appeal with this direction, emphasizing the need for proper evidence to support the reconciliation.

Issue 2: Delay in filing the appeal and condonation
The appeal was filed with a substantial delay of 764 days, which the assessee attributed to inadvertent omission by an employee. The assessee submitted an affidavit explaining the circumstances leading to the delay, stating that upon discovering the oversight, immediate action was taken to file the appeal. The ITAT, considering the explanation and lack of malafide intent, decided to condone the delay in filing the appeal. The decision was based on prioritizing the merits of the case over technicalities, especially when the delay was not intentional.

In conclusion, the ITAT allowed the appeal for statistical purposes, remanding the issue of addition back to the Assessing Officer for detailed reconciliation. The delay in filing the appeal was condoned due to the inadvertent nature of the omission by the assessee's employee.

This detailed analysis covers the issues raised in the legal judgment, highlighting the key arguments, decisions, and directions provided by the ITAT in response to the appeal filed by the assessee.

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