TaxTMI 
TaxTMI 
2015 (11) TMI 570
X X X X Extracts X X X X
X X X X Extracts X X X X
....credit. iii. The CIT(A) erred in confirming the addition of Rs. 10,000/- on account of alleged interest received but not offered to tax. (II) In ITA No.9188/Mum/2010 For A.Y. 2004-05: i. The CIT(A) erred in upholding the validity of the notice under section 148 of the Act and the proceedings pursuant thereto. ii The CIT(A) erred in confirming the addition of Rs. 3,73,000/- on account of alleged unexplained cash credit. iii. The CIT(A) erred in confirming the addition of Rs. 10,000/- on account of alleged interest received but not offered to tax. (III) In ITA No.9189/Mum/2010 For A.Y. 2005-06: i. The CIT(A) erred in upholding the validity of the notice under section 148 of the Act and the proceedings pursuant thereto. ii The CIT(A) erred in confirming the addition of Rs. 5,41,500/- on account of alleged unexplained cash credit. iii. The CIT(A) erred in confirming the addition of Rs. 10,000/- on account of alleged interest received but not offered to tax. 3. Before we proceed to dispose this appeal on merits, it has been noted by us, that there is a delay of 288 days in filing of these appeals the Assessee before....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... these companies have, in the financial year ending 31st March 2010 (i.e.financial year 2009- 2010), suffered severe financial crisis and their operations have had to be closed down. Hereto annexed and marked EXHIBIT - "A" is a copy of the profit and loss account of the Company for the year ended 31st March 2010. Hereto annexed and marked EXHIBIT - "B" is a copy of the Board resolution of the Company passed on 15th March 2010 closing down the manufacturing activities of the Company with effect from 31st March, 2010. The application to the Labour Commissioner dated 25th November 2010 intimating for the closure of the manufacturing unit and seeking issuance of Labour NOC, is hereto annexed and marked EXHIBIT "C". The notice of the closure of the said unit was also given in the Lokmat and Pudhari newspaper at Thane issue dated 14th October, 2010, a copy of which is hereto annexed and marked EXHIBIT "D" Colly. Hereto annexed and marked EXHIBIT - "E" is a copy of the profit and loss account of Saino Engineering Pvt. Ltd. for the year ended 31st March 2010. Hereto annexed and marked EXHIBIT "F" is a copy of the Board resolution of Saino Engineering Pvt. Ltd. passed on 15th March 2010 clo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Assessee. 3.5. On the other hand, the Ld Counsel pleaded on behalf of the Assessee that the Assessee was heavily engrossed in certain matters, of serious nature, pertaining to closure of business of two companies, whose management and control was in the hands of the assessee. These companies suffered severe financial crises and finally, their business had to be closed down. The assessee was entangled with the Labour Commissioner and was engaged in other activities pertaining to closure of the aforesaid two companies. It has been further stated that the Assessee was not well educated and had studied only up to sixth standard. Although, he could sign in English also but he was not aware of the complexities and nitty-gritty's of income tax proceedings. In these circumstances, the assessee was dependent on the advice given to him by his employees. Most of the senior and experienced employees/staff members had him left due to closure of these two companies. When situation came somewhat in control, in June 2010, then one of the employees of the Assessee informed him about delay occurred in filing of these appeals before the Tribunal. On getting this information, the Assessee came ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o, even handed justice on merits in preference to approach which scuttles the decision on merits and it was further held that powers of condonation of delay is conferred with a view to enable the courts to do substantial justice to litigants by disposing of the cases on merits. It was held by the Hon'ble Supreme Court that liberal approach should be adopted, on principle, in these matters because: "1.Ordinarily, a litigant does not stand to benefit by lodging an appeal late. 2 Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties 3. "Every day's delay must be explained"- does not mean that pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, common sense and pragmatic manner. 4. When substantial justice and technical considerations ate pitted against each other, the cause of substantial justice deserve to be preferred, for the other side cannot claim to have vested ri....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... illegal and deserves to be quashed. 4.1. In addition to the above in the written submissions filed before the Ld. CIT(A), the assessee made following submissions before the Ld. CIT(A) with respect to Ground No.1 and 2 of the appeal memo: Ground 1&2: It is now settled law that for assuming jurisdiction under section 148 of the Income Tax Act (hereinafter referred to as "the Act") the Assessing Officer must record reasons before the issue of notice to demonstrate his belief that income has escaped assessment. The Appellants says that the notice under section 148 of the Act has been issued without recording of reasons. The Appellant prays that the Assessing Officer be called upon to show that reasons have been recorded by him before the issue of notice under section 148 of the Act. If indeed such reasons are recorded, the Appellant prays that an opportunity be afforded to him to challenge the legality of assuming jurisdiction under section 148 of the Act based on the reasons recorded, it any. 4.2. However, while deciding the appeals of the Assessee, Ld. CIT(A) did not adjudicate these grounds under some wrong and erroneous assumption of facts and held vide para 17 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f reopening, as contained in sections 147 to 151 of the Income Tax Act r.w.s.143(2) and 143(3) of the Income Tax Act 1961. These Grounds are purely legal grounds, and can be raised at any stage. These can be raised even for the first time before the Tribunal as has been held by the Bombay High Court in the case of Inventors Industrial Corporation Ltd. vs. C I T, (1992) 194 ITR 548 (Bom), holding that the Assessee was entitled to challenge the jurisdiction of the AO to initiate the reassessment proceedings before the Ld CIT(A) in the second round of proceedings even though he had not raised it earlier before the AO or in the earlier appeal in the first round. We further derive support from the judgment of Hon'ble Supreme Court in the case of NTPC 229 ITR 383, holding that legal ground can be raised at any stage. It is noted that facts of case before us are even stronger. Although, the Assessee had not taken these grounds before the AO, but these grounds, with regard to reopening, were taken before the Ld CIT(A). Justice has not been done with this case, by not deciding jurisdictional grounds by the Ld. CIT(A), in a proper manner. 4.5. Thus, taking into consideration, all the afor....