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Income Tax Appellate Tribunal, BENGALURU (SMC
Shri Somusekhar Reddy Bapanapalli vs The Income Tax Officer 1st Floor, Canara Bank Ward - 6(3(4) Nellisoudha Branch, Kuvempu Road Bangalroe Shimoga 577201 PAN – APDPB5327H (Appellant) (Respondent) Assessee by: Ms. Sunaiana Bhatia, CA Revenue by: Shri Ganesh R. Ghale, Standing Counsel Date of hearing: 17.01.2023 Date of pronouncement: 17.01.2023 O R D E R Per: Chandra Poojari, A.M. This appeal by the assessee is directed against the order of the learned CIT(A)/NFAC, Delhi dated 06.09.2022 for AY 2011-12.
The assessee has raised the following grounds of appeal: - “1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence probabilities, facts and circumstances of the appellant's case.
2. The appellant denies himself liable to be assessed on a total income of Rs. 16,83,980/-, in the assessment order passed u/s. 143[3] rws 147 of the Act as against the returned income of Rs. 2,77,830/- for the year under appeal, under the facts and in the circumstances of the appellant's case.
3. The learned CIT[A] is not justified in sustaining the addition to the extent of Rs.10,06,150/- out of the original addition of Shri Somusekhar Reddy Bapanapalli Rs. 14,06,150/- as unexplained cash deposited in the bank account rejecting the bonafide and truthful explanation tendered by the appellant that the cash was deposited from out of known and explainable sources under the facts and in the circumstances of the appellant's case. 3.1. The learned CIT[A] ought to have appreciated that the cash deposit was made in the bank account of the appellant, who is a Salaried Employee with Canara Bank and the cash was deposited from out of sale proceeds of agricultural produce, amounts returned by the appellant's brother, hand loan from the appellant's father, re-deposit of earlier withdrawals and thus, the cash deposits was made was from out of known and explainable sources of funds and hence, the addition made deserves to be deleted. 4, Without prejudice to the right to seek waiver before the Hon'ble DG/CCIT, the appellant denies himself liable to be charged to interest u/s.234-A and 234-Bof the Act, which requires to be cancelled under the facts and in the circumstances of the appellant's case.
5. For the above and other grounds that may be urged at the time of hearing of the appellant, your appellant humbly prays that the appeal may be allowed and justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”
3. There was a delay of 39 days in filing this appeal before this Tribunal. The learned A.R. explained the delay on the reason that on receipt of the order of learned CIT(A), the assessee had handed over the same to the Chartered Accountant, Shri Manjunath Hedge, who is his regular Tax Consultant. Since Shri Manjunath Hedge is not conversant with the filing of appeal with this Tribunal, the assessee was of the impression that he would engage some other Advocate on his behalf to file the appeal before this Tribunal. However, he failed to take appropriate steps to file the appeal before the Tribunal. Finally the assessee approached one more Chartered Accountant, Mr. Sunil, who advised the assessee to engage the present counsel, Shri V. Srinivasan.
Shri Somusekhar Reddy Bapanapalli Accordingly the assessee engaged the present counsel and thus caused the delay in filing of the appeal before this Tribunal. Further she prayed that this delay was on account of circumstances beyond his control and the delay is neither intentional, wilful nor deliberate and prayed to condone the delay and admit the appeal for adjudication.
On the other hand, the learned D.R. strongly opposed admitting of the appeal by condoning the delay, since the assessee kept quiet for 39 days without enquiring with assessee’s Chartered Account, Mr. Manjunath Hegde. Hence, the delay caused due to negligence of the assessee which cannot be condoned. For this purpose he relied on the order of the coordinate bench in the case of Arvind Mangilal Jain in dated 23.11.2022 which it was held as under: - 4. I find that the Assessment Order was passed on 22.12.2017 and the papers must have been handed over to the CA for filing appeal before the CIT(A) in January 2018. It is hard to believe that till January 2022 assessee did not make any enquiry with the CA about the fate of his appeal. It is even more surprising, when it is said that even the CA did not know that the appeal was listed before CIT(A) and was dismissed for non-prosecution. From the affidavit, it appears that it is only the AO who informed the assessee in January, 2022, that the assessee’s appeal before CIT(A) was dismissed. It is thus clear that there has been clear lack of diligence on the part of the assessee and therefore the delay in filing the appeal cannot be accepted as owing to reasonable cause. Hence, I refuse to condone the delay in filing the appeal and dismiss the appeal as unadmitted.
In the result, appeal of the assessee is dismissed as unadmitted.”
5. I have heard the rival contentions and perused the material on record. Admittedly, there was a delay of 39 days in filing the appeal before the Tribunal. The learned A.R. submitted that the assessee given the order of the learned CIT(A) to Shri Manjunath Hegde, Chartered Accountant to file appeal before the Tribunal. However, he was not well conversant with the appeal Shri Somusekhar Reddy Bapanapalli proceedings before the Tribunal. Hence, he failed to file the appeal in time. Later the assessee contacted one more Chartered Accountant, Shri Sunil, who advised him to engage the present counsel Shri V. Srinivasan and thus caused the delay of 39 days in filing this appeal before this Tribunal. In my opinion, the short delay of 39 days was beyond the control of the assessee and it is neither intentional, wilful nor deliberate. Accordingly the Delay was due to the inability of the assessee’s counsel to take remedial measures to file this appeal before the Tribunal and there is good and sufficient reason for the delay in filing the appeal due the above facts and also the delay not intentional or inordinate. Accordingly, by placing reliance on the judgement of the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors [167 ITR 471 (SC)] I condone the delay of 39 days in this case and admit the appeal for adjudication.
The facts of the case are that the AO issued notice under Section 148 of the Income Tax Act, 1961 (the Act) dated 28.03.2018 was issued and served in the case of the assessee in respect of assessment year 2011-12 as no return of income had been filed for the assessment year 2011-12 and as per information available, the assessee had made cash deposits of Rs.11,53,850/- into bank accounts during the financial year 2010-11 relevant to assessment year 2011- 12. In response to the notice issued, the assessee appeared on 05.11.2018 and stated that a return of income has been filed in response to the notice on 26.10.2018. The assessee, an employee of Canara Bank has deposited cash of Rs. 14,06,150/- in 3 bank accounts maintained with Canara Bank. The assessee has stated that the amounts of cash deposits include agricultural income, amount returned by brother, hand loan from father, re-deposit of earlier withdrawals and amounts withdrawn and re-deposited to maintain standard cash limit of the branch on Friday. The assessee's explanation was not acceptable by the AO for the following reasons:
Shri Somusekhar Reddy Bapanapalli The assessee has not declared any agricultural income as per the Return (i) of Income filed and has not furnished any details of crops grown, bills/receipts in proof of sale of agricultural produce, The claim of amounts returned by brother, hand loan taken from father (ii) and amounts claimed to have been re-deposited from out of earlier withdrawals are not supported by any documentary evidence, It has not been explained with supporting material or evidence as to (iii) why the assessee had to withdraw cash on Friday and re-deposit the same on the next day in order to maintain the standard cash limit of the branch. Accordingly, AO added Rs. 14,06,150/-.
However, the learned CIT(A) after considering the above details gave relief of Rs.4,00,000/- out of the addition of Rs.15,06,150/- and sustained the addition of Rs.10.06.150/-. Against this the assessee is in appeal before the Tribunal.
Before me the learned A.R. submitted that in the assessment year under consideration the assessee is owning 2 acres and 4 gundas of land at Houspur Village, Nandial in Andhra Pradesh and earned a net agricultural income of Rs.2,33,000/- in the assessment year under consideration. Further, the assessee received a gift of Rs. 10,000/- from his brother and Rs.1,20,000/- from his father and Rs.1,45,000/- from his father as loan and there was a cumulative earlier withdrawal of Rs.6,23,000/- from the bank account in the assessment year under consideration and this amount is also used to redeposit into these bank accounts and the same to be considered as the source of deposit and the addition to be deleted.
On the other hand, the learned D.R. submitted that the assessee has not having enough source of fund to deposit into the bank account. Hence, the addition to be sustained. Thus he supported the orders of the lower authorities.
Shri Somusekhar Reddy Bapanapalli 10. I have heard the rival contentions and perused the material on record. In the assessment year under consideration the assessee has deposited a sum of Rs.14,06,150/- in assessee’s bank account. The assessee explained the source of deposit is as follows: - Sl. No. Particulars Amount (in Rs.) 1 Agricultural Income 2,33,000 2 Gift from brother 10,000 3 Loan from father 1,45,000 4 Gift from father 1,20,000 5 Withdrawal from bank account 6,23,000 Total 11,31,000 However, the assessee deposited Rs.14,06,150/- into assessee’s bank account. The assessee filed confirmations from the parties from whom he received the money. He also filed details of copies of RTC showing owning of agricultural land at around 2 acres 4 gundas. According to the learned D.R. the assessee has not disclosed his agricultural income in his return of income, hence, it cannot be believed. In my opinion owning of agricultural land measuring 2 acres and 4 gundas is supported by RTC copy. Hence, earning of agricultural income cannot be doubted. However, the assessee’s source of total income as detailed above is only Rs,11,31,000/- other than from salary. Assessee being employed in bank earned returned income of Rs.2,77,000/- only. Considering these facts, in my opinion the source available to the assessee to deposit into the bank account to be considered around Rs.10,00,000/- out of Rs.11,31,000/- as explained above. The balance amount of Rs. 4,06,150/- to be considered as unexplained and to that extent addition to be sustained. Accordingly I direct the AO to make an addition of Rs.4,06,150/- as unexplained income of the assessee. Ordered accordingly.
Shri Somusekhar Reddy Bapanapalli 11. In the result, the appeal filed by the assessee is partly allowed. Dictated and pronounced in the open Court on 17th January, 2023.