Delay in Filing Appeal can’t Condone merely on the basis of Self-Serving Documents: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai has held that the delay of 285 days in filing appeal cannot be condoned merely on the basis of self-serving documents in the absence of any evidence to prove bonafideness of the assessee.

The Assessing Officer re-opened the assessment against the assessee on the basis of the information received from the DGIT (Inv), Mumbai which suggests that the assessee is a beneficiary of accommodation entries provided by hawala operator, M/s. Globex International, which resulted in under assessment of income.

Since the assessee was not able to produce any document to prove the claim of purchase of capital asset and mere production of journal entry is not sufficient to prove the genuineness of purchase made from the above party, the re-opening proceedings were confirmed.

Later, the assessee preferred to file an appeal before the first appellate authority with a delay of 285 days. To justify the delay, the assessee argued that it has not filed the appeal in time under the bonafide belief supported by an expert advice of Chartered Accountant Shri Ronak Dharmidharika that the assessee had no merit in the case.

On second appeal, the Tribunal noted that the assessee failed to bring any evidence to prove that there is change in facts existed at the time of filing the appeal before the CIT(A) and the facts existed at the time of assessment proceedings.

“When the assessee has taken a conscious decision not to file appeal against the order passed by the AO, there is no valid reason to be considered by the learned CIT(A) to condone the delay in filing the appeal merely on the basis of self-serving documents filed by the assessee, i.e. affidavits of two professionals. No doubt, the appellate authority have inherent power to condone the delay in filing the appeal, provided the assessee who filed the appeal makes out a case of sufficient and reasonable ground for not filing the appeal within the time prescribed under the Act,” the Tribunal said.

“In this case, on perusal of details filed by the assessee, we found that there is no change in the facts existed at the time of assessment proceedings and at the time of filing appeal before the CIT(A). The only change in facts is that there are divergent statements by way of affidavits from two Chartered Accountants, one in favour of the assessee and one is against the assessee. Except this the assessee has not brought out any records to prove its bonafide attempts made in filing appeal against the order passed by the AO. Had it been the case of the assessee that it has handed over all papers to the professional for filing the appeal, but the professional who had advised the assessee to not to file the appeal. In the absence of any evidence to prove bonafideness of the assessee, merely on the basis of self-serving documents, huge delay in filing appeal cannot be condoned. Therefore, we are of the considered view that the assessee has failed to make out sufficient and reasonable cause for condonation of delay in filing the appeal filed before the CIT(A). Although, the assessee has relied upon various decision in support of its arguments, the facts remain that the term “sufficient cause” is not explained and hence whether to condone the delay or not is purely depends upon the facts and circumstance of each case. Therefore, all the case law relied upon by the assessee are considered to be not applicable to the assessee’s case and accordingly not considered,” the bench added.