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TMI Blog2014 (11) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... l against the order of the Ld.CIT(A) and it was at this time that it was pointed out that the primary grievance of the assessee emanates from the order passed u/s.263 and the legal remedy lies in filing an appeal against the order u/s. 263 of the act. 2. Facts in brief: The aseesee is a partnership firm and is in the business of manufacture, export of home furnishing products. A search and seizure operation was conducted on the assessee on 24.04.2007. The assessee filed its return of income on 13.09.2009 returning a total income of Rs. 9,36,82,650/-. They argued that the assesee was under a bonafide belief that remedy lies in appealing against the order of the AO passed U/s.154 read with sec.263 and this was due to his lack of knowledge and proper guidance. It was pleaded that under the aforesaid facts and circumstances, as the matter was beyond the control or knowledge of the assessee, the delay in filing of the appeal has to be condoned. An affidavit has been filed to this extent. Reliance was placed on : (a) Collector, Land Acquisition vs. MST Katiji & Others (SC) 167 ITR 471 (SC) ; (b) ITA 3335/Del/2012 in Ghaziabad Development Authority vs. ACIT, the Delhi "F" Bench of the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n handed justice on meritsin preference to the approach which scuttles a decision on merits. Turning to the facts of the matter, giving rise to the present appeal, we are satisfied that sufficient cause exists for the delay. The order of the High Court dismissing the appeal before it as time barred, therefore, set aside. Delay is condoned. And the matter is remitted to the High Court. The High Court will now dispose of the appeal on merits after affording reasonable opportunity of hearing to both the sides. Appeal is allowed accordingly. No costs." "Sufficient cause" for the purpose of condonation of delay, should be interpreted with a view to do justice on merits in preference to approach with correct discussion on merits. 5. Rival contentions heard. This is a case, where the assessee has been diligently pursuing remedies against the order of the revenue authorities. It is not a case whether the assesee has given up its case at any stage. No doubt the assesee is guided by professionals in its litigation. This does not mean that there could not be a mistake on the part of assessee or its counsels in interpreting the order of the Ld.CIT(A) u/s 263 and coming to a conclusion that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was barred by limitation by a couple of months. This appeal was dismissed on the ground that there was not sufficient ground for condonation of delay. On mistaken advice, the appellant filed a second appeal to the High Court which was thereafter treated by the Court as a revision application. This was also dismissed. The appellant then filed a review petition which was also dismissed. Against that the appellant filed a SLP which was also delayed. The delay in filing the SLP was condoned and the question before the Supreme Court was whether the District Judge was justified in dismissing the first appeal on the ground of delay. HELD allowing the appeal: (i) While considering an application for condonation of delay no strait jacket formula is prescribed to come to the conclusion is sufficient and good grounds have been made out or not. Each case has to be weighed from its facts and the circumstances in which the party acts and behaves. From the conduct, behavior and attitude of the appellant it cannot be said that it had been absolutely callous and negligent in prosecuting the matter; (ii) Justice can be done only when the matter is fought on merits and in accordance with law rath ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of limitation if the appellant shows sufficient cause for not preferring the appeal "within such period." Held, that it would be irrelevant to invoke general considerations such as diligence of the appellant in construing the words of Sec.5. The expression "within such period" does not mean during such period and the failure of the appellant to account for his non diligence during the whole period of limitation does not disqualify him from praying for condonation of delay. In showing sufficient cause for condoning the delay the appellant has to explain the whole of the delay covered by the period between the last day of limitation and the date on which the appeal was actually filed". In the case on hand, in our view, the assessee has explained the delay in question. iv. In the case of J&K Small Scale Industries Development Corporation Ltd. vs. ACIT (supra) the Tribunal came to a conclusion that the assessee has suppressed material facts and that it did not approach the Courts with clean hands. 5.3. As already stated in the case on hand the assesee has shown a sufficient cause and reason to explain the whole of the delay covered by the period between the last day of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,11,87,190/- inter alia making addition of : (a) Rs. 24,537/- on account of disallowance of depreciation. (b) an amount of Rs. 25 laks on account of unexplained money on the basis of seized material. (c) addition on account of stock difference to the tune of Rs. 1,49,80,000/-. 6.2.1. Aggrieved the asessee carried the matter in appeal before the Ld.CIT(Appeals). 6.3. The Ld.CIT(A)-I, Ludhiana vide order dated 18.02.2011 considered appeal of the assessee against the order passed U/s.143(3) read with Sec.153B by the AO and dismissed the same on merits. He upheld the finding of the Assessing Officer. 6.4. Later the Ld.CIT(Central), Gurgaon passed the impugned order U/s.263 Of the Act on 15.02.2012 revising the order passed by the Assessing Officer u/s 143(3) r.w.s. 153B dt. 29.12.2009. In this order the Ld.CIT(Central), Gurgaon was of the view that the actual stock difference was Rs. 13,54,07,957/- and this remained unexplained by the assesee. He observed that the assesee offered to surrender, during the course of assessment proceedings, Rs. 10 crores only, on account of shortage of stock and the gross profit rate of 14.98% was applied on the shortage of stock and addition was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ul consideration of the facts and circumstances of the case, on perusal of orders of lower authorities, material on record and various case laws cited, we hold as follows. 10. The AO in his order u/s143(3) considered the issue of stock difference at para 11 to 11.15, (which we are not reproducing for the sake of brevity) and rejected the contentions of the assessee. Thus in our view it cannot be said that there is non application of mind by the AO nor that the AO was negligent. The decision taken by the AO on this issue in our view is a considered decision and a possible view. 10.1. The assessee carried the matter in appeal before the First Appellate Authority. 10.2. The Ld.CIT(A)-I, Ludhiana in his order dt. 18-2-2011 on the issue of these stocks at page 8 of his order considered the submissions of the assessee at length and at page 15 held as under. "Regarding addition of Rs. 1,49,80,000/- on account of stock difference, the issue has been discussed by the Assessing Officer in para 11 of assessment order. As per facts noted in assessment order, sotck of Rs. 23,17,23,865/- was found at the premises of assessee (without taking into account the stock lying with other concerns as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer found some discrepancies as noted in assessment order. In view of the above and also for the reasons discussed in assessment order, assessee offered the amount of Rs. 1,49,80,000/- as undisclosed income on undisclosed sale of Rs. 10 crores as noted in para 11.15 of the assessment order." 10.3. A perusal of the above clearly demonstrates: (i) That the AO has applied his mind and after carefully considering the facts and circumstances of the case took a possible view. Under such circumstances we are of the considered opinion that the order passed by the CIT (Central) u/s 263 is bad in law. For the proposition that the revision u/s 263 is bad in law, when the AO duly applied his mind as regards the issue on hand, we rely on the following decisions. a) CIT vs. Bharat Aluminium Co.Ltd. (2008) 303 ITR 256 (Del) b) CIT vs. Design and Automation Engineers (Bombay) Pvt.Ltd. 13 DTR 145 (Bom) c) Raj Shyama Construction (P) Ltd. vs. ACIT, 135 TTJ 33 (Del) d) CIT vs. Hero Auto Ltd. 343 ITR 342 (Del.) (2012) (ii) Even otherwise, the issue of stock difference and the taxability of income thereon, was subject matter of appeal before the Ld.CIT(A), Ludhiana. The Ld.CIT(A) Ludhiana up held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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