ITAT Mumbai Dismisses Appeal Filed 895 Days Late, Cites Lack of Evidence and Lost Records in Fire

The ITAT Mumbai dismissed an appeal, as the taxpayer failed to furnish proper evidence and documents in support of the grounds raised by it and also for reasons it furnished for delaying filing the appeal by 895 days. The tribunal also did not find it relevant to remand the case back to the CIT(A), as the taxpayer had also lost all its records and data in the fire.

The Income Tax Authorities had made two major additions, amounting to Rs 11.27 lakh and Rs 7.35 lakh, to the assessee’s income under Sections 69C and 69 of the Income Tax Act, respectively, for the Assessment Year 2012-23.

These additions were the result of the disallowances of certain claims made by the assessee. Since the assessee had failed to furnish relevant explanations and documentary evidence regarding the debits in credit card bills/expenditures claimed by it, the tax authorities had denied accepting the same. Additionally, the assessee could not explain the nature and source of the time deposits made by it in the bank account maintained with United Bank of India during the year in consideration.

The aggrieved assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]; however, the same was dismissed on the grounds of lack of proper submissions. The CIT(A) had noted that the assessee was granted a fair opportunity of hearing; however, it still failed to submit a proper explanation in support of the grounds raised by it.

The assessee thereafter approached the ITAT Mumbai; however, it delayed filing the appeal by 895 days. Hence, to explain the reason for the delay, the assessee filed an affidavit filed by its director. The assessee explains that during the tax proceedings, its company had suffered a massive fire, due to which the entire business operation had stopped.

The assessee claims that “the registered office, which was mortgaged with the bank, was also sold against the recovery of the loan, and, therefore, the assessee had not received any of the notices or orders. The assessee company became inoperative due to the closure of business, and the mailbox was not in use.” Further submits that it has lost all the company’s records and data in a fire. Consequently, it was unable to produce any evidence in support of the grounds it raised; consequently, the tax authorities made the impugned additions/disallowances.

When the tribunal analysed the case, it noted that in the case of the assessee, it had not properly complied with either the tax authorities or with the CIT(A). The tax authorities had made the impugned additions in the absence of proper submissions, explanation, or corroborative evidence. The same situation was before the lower appellate authorities and is now before the tribunal too. A decision cannot be announced in favour of the assessee without consideration of evidence/documents explaining the claims made by it. Additionally, the appeal before the tribunal was filed 895 days late, for which reason the delay was not explained with proof.

Even if the matter is sent back to the first appellate authorities, the assessee will still not be able to furnish proper explanations/evidence, as it has lost most of its records and data in the fire. Consequently, the tribunal held that there is no point in continuing the case further and dismissed the appeal.