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TMI Blog2010 (3) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... in restricting the estimation of net profit at 5 per cent as against 12 per cent adopted by the Assessing Officer on sale of old tractors. 3. As the issues raised in these appeals being similar, they were heard, considered together and disposed of, for the sake of convenience and clarity, in this common order. 4. The brief facts of the case are as follows:- The assessee, an individual, was a wholesale dealer in Mahindra and Mahindra tractors (M&M). There was an action under section 132 of the Act in the business and residential premises of the assessee on various places during December, 2003. Consequent upon the search operation, the assessment proceedings were initiated under section 153A of the Act. In compliance, the assessee had furnished returns of income for all the assessment years on20-1-2005, admitting the identical incomes, which were declared in the original returns, earlier. 4.1 The case of the Revenue was that the materials unearthed during the search operations reveal that apart from dealership in M&M tractors, the assessee had indulged in the business of purchase and sale of old tractors, besides advancing monies to various parties, investments on various propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tements recorded in the course of assessment proceedings, the Assessing Officer has observed thus - (i) The assessee had advanced money to the new tractor buyers to enable them to pay seed money deposit to the banks for obtaining finance and for purpose of such advances, the assessee taking into his custody the old tractor of the customers which shows that the assessee was directly or indirectly dealing in old tractors, till such time the old tractor is sold and the amount realized, the customer will be a debtor in the assessee's book; - once the assessee realize the sale proceeds of the old tractor, the customer's accounted credited and squared up; (ii) the books of account also show that in many cases, such debit balances were carried forward from year to year and during such period, the old tractors of such customers were in assessee's custody; (iii) the assessee was dealing in old tractors and the related transactions were recorded in his books - not in regular books - on many occasions. He had made profits as well as losses on a few cases; (iv) the assessee himself had admitted on oath that - 'such schemes (exchange of old tractors for new tractors) e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) was the estimation of profit on old tractors at 12 per cent. 6.1 Before dealing with the issue raised by the assessee, the CIT (A) was confronted with a fact that there was a considerable and inordinate delay of 28 months in preferring these appeals against the orders for the assessment years under dispute. 6.1.1 The contention of the assessee before the CIT(A) was that "K. Prabhakar Rao was admitted to hospital due to mental depression after search and dis-entitling of tractor business". 6.1.2 The observation of the CIT(A) was that "He has filed medical certificate of Dr. K. Satish dated 14-1-2004 where he is advised due to diabetics, hypertension and mild chronic changes in ECG to take complete rest and reduce work load. Assessee has also relied on Apex Court decision in case of Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471. Owing toApex Court decision delay is condoned." 6.2 With regard to estimation of profit at 12 per cent, the Ld. CIT(A), after due consideration of the assessee's contention and also extensively quoting the Assessing Officer's version, had observed thus - "7.2........ After considering argument it is seen that appellant is dealing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling of block assessment return, appeared before the Assessing Officer in assessment proceedings, his statements on oath was recorded on two occasions, approached the Hon'ble High Court in a writ for release of jewellery etc., for which his alleged mental depression and ill-health did not come in the way. During the course of hearing, the Ld. D R furnished a paper book containing among others copies, (i) Assessing Officer's report, (ii) petition for condonation of delay, filed by the assessee before the CIT(A) etc. 7.1.1 On the other hand, the ld. A.R., after his lengthy argument, has summed up the issue thus- (i) the assessee had suffered immense financial loss due to the search and seizure action in December, 2003 which led to the cancellation of the dealership rights of M&M tractors and subsequent liabilities which arose with ICICI Bank of more than Rs. 3 crores; (ii) the financial stress and the social stigma had made the assessee a physical wreck which made the assessee to lose sight of his normal duties; (iii) the CIT(A) based his decision to condone the delay not merely on medical certificate, but, considered the whole facts of the case in a judicious manner; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in view of the Supreme Court's judgment". 8.1.1 However, on a glimpse of the impugned order under dispute, we find to our dismay that the cryptic observation of the Ld. CIT(A) was "Owing toApex Court decision, delay is condoned." Further, the Ld. A.R. was trying to canvass to justify the CIT(A)'s action in the guise of section 249(3) of the Act. 8.1.2 Let us have a glance of what section 249(3) says- "S.249(3) The Commissioner (Appeals) may admit an appeal after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting it within that period." 8.1.3 No doubt, the Ld. CIT(A) shall be within his realm under the provisions of section 249(3) of the Act to admit an appeal after the expiration of the said period if he is satisfied and the appellant had sufficient cause. However, in the instant case, there was no evidence whatsoever to suggest that the Ld. CIT(A) was satisfied that the appellant had sufficient cause for not presenting it within that period. Instead, we would like to point out with a heavy heart that a vital issue has been dealt with by the Ld. CIT(A) in a casual way without realizing its consequence. 8.1.4 Turni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters, appeared before the authorities concerned and his statements were recorded on oath, which proves beyond doubt that the medical certificate dated 14-1-2004 had no locus standi to attribute that he was prevented by a reasonable cause in not preferring the appeals in time. As a matter of fact, the Ld. CIT(A), in our considered view, should not have taken cognizance of the Medical Certificate obtained way back in early 2004 - whereas the assessment orders were passed on23-3-2006 and they were received by the assessee on10-4-2006 - in condoning the delay of preferring of the appeals in 2008. 8.1.6 With respect, we have duly considered the case laws on which the assessee has placed strong reliance. Notably, in the case of the Mst. Katiji, the highest judiciary of the country in its wisdom had ruled that "to condone delay for 'sufficient cause', the courts should have a pragmatic and liberal approach". 8.1.7 With due regards, we would like to point out that the Hon'ble Apex Court was pleased to observe that the Courts should have a pragmatic and liberal approach to condone the delay for 'sufficient cause'. However, in the instant case, the assessee had not brought on record any do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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