TMI Blog2014 (5) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the assessee’s husband Mr. Jawahar B. Purohit – proceeding u/s 153C has been initiated in the case of the assessee - it cannot be held that the assessment proceedings for the assessment year 2005-06 were pending on the date of the search - the original assessment order in the case does not get abated - Once the original order does not abate, then whatever is the fate of the addition made u/s 68, in the regular proceedings u/s 143(3), it would be applicable in the proceedings only and that would be final qua the assessment year 2005-06 - No further addition on this count as to u/s 68, pertaining to same creditors can be made again u/s 153C / 153A proceedings – Relying upon CIT v/s Shaila Agarwal [2011 (11) TMI 213 - ALLAHABAD HIGH COURT] - only the assessment proceedings and the re-assessment pending on the date of initiation of search, shall abate under the second provisio to section 153A and if an appeal is pending against a completed assessment before the Tribunal on the date of search, then such completed proceeding do not abate -if any addition on account of provisions of section 68 is called for in the case, it should be examined in the regular assessment proceedings u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal was filed on 10th February 2009. The contents of the second affidavit sworn on 5th March 2014, by the then authorised representative, Mr. Surendra R. Desai, is reproduced herein below:- I, Surendra R. Desai, aged about 56 years s/o. Shri Ramanlal Desai resident of C/10, Madhuban Co. Op. Hsg. Soc., Simpoli Cross Road, Borivali (West), Mumbai - 400092, do hereby solemnly declare and affirm on oath as under: 1. That I am an Income Tax Practitioner and I had been appointed as authorized representative to appear and present the case of Mrs. Savita J. Purohit before the ACIT-25(2), Mumbai and CIT(A)-25, Mumbai for the proceedings pending for A.Y. 2005-06 under the Income Tax Act, 1961. 2. That the appellate order dated 09-07-2008 passed by the Ld. CIT(A)-25, Mumbai for A.Y. 2005-06 in the case of Mrs. Savita J. Purohit was directly received by me from the I.T. Department on 15-07-2008 which was given to my office clerk for the preparation of further appeal before the Hon'ble ITAT. 3. That I omitted to inform Mrs. Savita J. Purohit about the passing and receipt of the appellate order dated 09-07-2008 passed by the Ld. CIT(A)-25, Mumbai for A.Y. 2005-06. 4. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the learned Commissioner (Appeals)-XXV, Mumbai, was served upon the assessee s authorised representative and not upon the assessee. Once that is so, then, the averments made by Mr. Surendra R. Desai, in his two affidavits that the fate of the order was not communicated to the assessee and it got misplaced at his office by his clerk, can be presumed to be true. Under these circumstances there can be presumption in favour of the assessee and in the interest of substantial justice, we hold that the assessee was prevented by sufficient and reasonable cause from filing the appeal on time. Consequently, we condone the delay of 157 days in filing of the appeal, as the assessee s authorised representative has accepted his mistake of filing the appeal belatedly for the facts deposed to in his affidavit. We now proceed to dispose off the appeal on merit. 5. The sole grounds raised by the assessee in this appeal is that the learned Commissioner (Appeals) has erred in law and on facts in confirming the addition of sums aggregating to Rs. 92,59,530, on account of loan received from various persons which has been added as unexplained cash credit under section 68 of the Act. 6. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reproduced in Page-4 of the impugned order, read as under:- To Date: 7th July 2008 The CIT Appeal XXV Bandra Kurla Compex, Mumbai-51 Ref: Savita Purohit PAN No. A GUPP5547R With regards to the above mentioned assessee/ irrespective of the submission regarding addition made in our assessment for Ass. Year 2005-2006 for loan uls.68 for Rs.92,59,530/-. We would like to inform you that the assessee was /17 prima facie belief at the time of accepting the loan that by accepting the loan she is not breaching any of the Income-tax provisions. In this context we would like to submit that all the loans have been accepted from close relatives of Savita Purohit. All the relatives are staying in District Sevadia / Rajashan. As all the relatives are agriculturist inter alia all of them are illiterate or very less qualified. Secondly as my relatives are old age people including father and father in law it is very difficult to bring them to Mumbai and bring them to the Income Tax Department. In view of the above facts and in order to buy peace with the department/ we accept the loans taken by us to be added to the total income of the assessee uls.68. This suomoto declaration is al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Appellate Tribunal Rules, 1962, for admission of these additional evidences, stating various reasons as to why these documents could not be filed earlier in the regular assessment proceedings. In any case, he submitted that the same very documents are already on record of the Department during the course of proceedings under section 153C, which were specifically submitted before the Special Auditors. On the basis of these additional evidences, he submitted that these documents / evidences should be taken into consideration while adjudicating the issue involved on merits. 10. On the other hand, the learned Departmental Representative, submitted that once the assessee, through her authorised representative, has accepted the said addition that is, made an offer to include the cash loan as her income, then the same cannot be agitated here before the Tribunal. The affidavit which has been filed by the assessee denying the contents of the letter filed by the authorised representative is a self-serving and does not support the assessee s case. He submitted that the then authorised representative was acting on behalf of the assessee, therefore, the assessee cannot back track from su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee before us. In support of this denial, an affidavit of the assessee has also been filed before us. Under these circumstances, it is very difficult, either to accept the contents of the said offer letter filed before the learned Commissioner (Appeals), which has been signed by the then authorized representative or to accept the assessee s affidavit denying such letter, as it is mere self serving statement. The act done by an authorized representative under a power of attorney given by the assessee is binding, unless the authorized person himself accepts his mistake on his own account while acting on behalf of the assessee. Now, whether the offer letter, as filed before the learned Commissioner (Appeals), can be said to be conclusive against the assessee qua these additions. On a perusal of the letter, it can be seen that two offers were made; first, in order to buy peace, the loans have been accepted to be added as income; and second such an offer is being made with a condition that no penalty proceedings should be initiated. The learned Commissioner (Appeals), on such conditions, ought to have rejected the entire offer because addition or penalty thereof can be confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013, for the assessment year 2005-06, vide which, following ground has been raised:- That the learned assessing authority (Assistant commissioner of Income Tax, Central Circle-22, Mumbai) and the learned Commissioner of Income Tax (Appeals)-39, Mumbai have grossly erred in law and on the facts and circumstances of the case in making and confirming the addition to the income of the appellant to the extent of Rs.92,82,500/- on account of unexplained cash credit u/ s. 68 of the Income Tax Act, 1961, inspite of the fact that all relevant documents to prove identity, credit worthiness and genuineness of transaction were produced before the ld. A.O as well as before the ld. CIT(A). It is mentioned that the said documents / evidences have not been examined / verified / scrutinized by the ld. A.O. or the ld. CIT(A) under the garb that the matter is already pending at the level of Hon'ble ITAT, Mumbai. 14. The issue arising out of the aforesaid ground relates to the proceedings under section 153C r/w section 153A. In this case also, similar addition under section 68, on account of same creditors has been made, the Assessing Officer has taken note of all the facts from the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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