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Facts
The assessee challenged an addition of Rs. 19,17,000 made under Section 68 of the Income Tax Act. The assessee argued that she was a second joint holder in a bank account where the primary holder was deceased, and the deposits were made by the primary holder. The assessee also claimed the deposits were already taxed in the mother's case and that proper opportunity was not given.
Held
The Tribunal condoned the delay in filing the appeal. While not going into the merits, the Tribunal noted that the assessee had not filed crucial documents before the AO and filed them before the CIT(A) without permission. Therefore, the matter was restored to the CIT(A) for denovo decision.
Key Issues
Whether the addition under Section 68 is sustainable when the assessee was a joint holder and the primary account holder was deceased, and whether the matter should be remanded for fresh consideration due to non-submission of documents.
Sections Cited
68, 250, 253(4), 5
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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI GIRISH AGRAWAL
Date of Hearing 06.11.2025 Date of Pronouncement 29.12.2025 ORDER Per: SHRI. SANDEEP GOSAIN, J.M.:
The present appeal has been filed by the assessee challenging the impugned order dt. 30.06.2025 passed under section 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre (NFAC) / CIT(A) for the assessment year 2016-17. The assessee has raised the following grounds of appeal:
1. The learned CIT(A) erred in law and on facts by sustaining the addition under section 68 without considering that the appellant was merely the second joint holder in the DCB Bank account where the primary account holder was Late Frederick
George Desa (deceased husband of Carmen Juliet Desa), and the actual depositor was the primary account holder, making the addition in the hands of the second joint holder legally untenable and contrary to established judicial precedents..
2. The learned CIT(A) erred in law and on facts by upholding the addition of Rs. 19,17,000/- under section 68 of the Income Tax Act, 1961, when the same cash deposits in the joint DCB Bank Account No. 09411100009874 have already been subjected to taxation in the assessment of the co-joint holder (Carmen Juliet Desa PAN: ALPPD4967P), thereby violating Article 265 of the Constitution of India which prohibits levy of tax except by authority of law and creating an unconstitutional scenario of double taxation on the same transaction.
3. The learned CIT(A) erred in law and on facts by dismissing the reconciliation evidence and documentary proof without proper consideration, when similar evidence was accepted by the Assessing Officer in the parallel assessment of Carmen Juliet Desa for Rs. 15,65,000/- out of the same Rs. 19,17,000/- deposits, thereby creating an inconsistent and discriminatory approach in the treatment of identical evidence for the same transactions.
4. The learned CIT(A) erred in law and on facts by not appreciating the fact that the learned Assessing Officer failure to provide specific details of deposits (dates, amounts, break- up). inadequate opportunity to respond, and conducting assessment proceedings without proper adherence to principles of natural justice, particularly considering the death of the primary account holder which created practical difficulties in obtaining records.
5. The learned CIT(A) erred in law by upholding the addition without considering that under Indian tax jurisprudence and banking law, mere joint holding does not establish beneficial ownership, and in the absence of evidence showing that the appellant was the actual depositor or had beneficial interest in the cash deposits, the addition under section 68 cannot be sustained, particularly when the deposits were made during the lifetime of the primary account holder who had exclusive control over banking operations.
6. Without Prejudice the learned CIT(A) erred in law by not applying settled judicial precedents which establish that once prima facie satisfactory explanation along with source of cash deposit is provided by the assessee addition under section 68 is not sustainable, the burden shifts to the revenue to prove that the explanation is not satisfactory, and failed to recognize that in joint account cases, additions should be made only against the person who has actual control and beneficial ownership of the deposits, making the addition legally unsustainable and bad in law when proper explanation with documentary evidence was furnished.
The appellant craves to add, alter, classify, reclassify, delete or modify any of the above grounds of appeal and requests to consider each of the above grounds without prejudice to one another.
At the very outset, we noticed that there is delay of 5 days in filing present appeal and in this regard assessee has filed an application seeking condonation of delay is on the record. The contentions of which is reproduced herein below:
FACTUAL BACKGROUND AND APPEAL FILING 1.1 That the appellant, Clementine Fernandes, is an individual taxpayer who received the impugned order dated 30/06/2025 from the learned Commissioner of Income Tax (Appeals) upholding an addition of Rs. 19,17,000/- under section 68 of the Income Tax Act, 1961, for Assessment Year 2016-17. 1.2 That under section 253(4) of the Income Tax Act, 1961, the appeal before this Hon'ble Tribunal was required to be filed within 60 days from the date of receipt of the CIT(A) order, i.e., by 29/08/2025, however, the appeal is being filed on 05/09/2025, resulting in a delay of 6 days beyond the statutory period.
1.3 That the appellant is seeking condonation of the said delay of 6 days under section 5 of the Limitation Act, 1963, read with section 253(4) of the Income Tax Act, 1961, on the grounds stated hereinafter.
2. GROUNDS FOR CONDONATION OF DELAY 2.1 LACK OF ADEQUATE KNOWLEDGE OF LAW AND LEGAL PROCEDURES That the appellant is a layperson without adequate knowledge of income tax law, appellate procedures, legal requirements for filing appeals before the Hon'ble ITAT, or the technical complexities involved in challenging additions made under section 68 of the Act. The appellant was neither familiar with the statutory timelines nor the procedural requirements for filing appeals before specialized tax tribunals. 2 TIME REQUIRED FOR APPOINTMENT OF COMPETENT COUNSEL That immediately upon receipt of the adverse order from the CIT(A), the appellant recognized the need for professional legal assistance given the complex nature of the case involving joint account transactions, double taxation issues, and technical legal arguments under section 68 of the Act. The appellant commenced the process of identifying and appointing competent tax counsel with expertise in ITAT proceedings. 2.3 DILIGENT EFFORTS TO SECURE APPROPRIATE LEGAL REPRESENTATION That the appellant made diligent efforts to secure the services of a qualified chartered accountant and tax advocate with specific expertise in ITAT appeals and section 68 matters. The process involved consultations with multiple professionals, evaluation of their expertise, discussion of case merits, and finalization of professional engagement, which required substantial time beyond the appellant's initial expectations. 2.4 GOOD FAITH AND ABSENCE OF DELIBERATE DELAY That the delay was not intentional, deliberate, or due to negligence on the part of the appellant. The appellant acted in good faith and with due diligence in attempting to comply with the statutory requirements. The delay occurred purely due to Clementine Fernandes, Mumbai. the time required to secure competent legal representation for effectively presenting the case before this Hon'ble Tribunal.
3. PRAYER FOR RELIEF WHEREFORE, the appellant most respectfully prays that this Hon'ble Tribunal may be pleased to: 1. Condone the delay of 6 days in filing the present appeal under section 5 of the Limitation Act, 1963, read with section 253 of the Income Tax Act, 1961; 2. Accept the appeal for hearing and adjudication on merits; 3. Grant such other relief as this Hon'ble Tribunal may deem fit and proper in the circumstances of the case.
On the other hand Ld. DR refuted the contents contained in the application and requested for dismissal of the same.
After having heard Ld. DR on this application for seeking condonation of delay and considering the entire factual position as explained in the application and also keeping in view the principles laid down by Hon'ble Supreme Court in the case of Land Acquisition Collector Vs MST Katiji and others 1987 AIR 1353 Supreme Court, wherein it has been held that were substantial justice is pitted against technicalities of non deliberate delay, then in that eventuality substantial justice is to be preferred. In our view the principals of advancing substantial justice is of prime importance. Hence considering the explanation put forth by the Assessee by justifiably and properly explaining the delay which Clementine Fernandes, Mumbai. occurred in filing the appeal and taking sympathetic view that assessee in his application is suffering from cancer and construing the expression "sufficient cause" liberally we are inclined to condone the delay in filing the appeal before us. Therefore we condone the delay and admit the appeal to be heard on merits.
4. All the grounds raised by the assessee are interrelated and interconnected and relates to challenging the order of Ld. CIT(A) in sustaining the addition of Rs. 19,17,000/- u/s 68 of the Act.
We have heard the counsels for both the parties, perused the material placed on record, judgments cited before us and also the orders passed by the revenue authorities. From the records, we noticed that based on the AIR information it was noticed by the AO that substantial cash was deposited in the assessee’s DCB bank account. However despite multiple opportunities assessee failed to submit any satisfactory explanation or documentary evidence to substantiate the source of such cash deposit before the AO and Ld. CIT(A).
Now before us the only contention of the assessee was that the amount in question had already been subject to Clementine Fernandes, Mumbai. assessment in her mother’s case. However, the said fact was also not been conclusively substantiated. Ld. AR submitted that he had placed on record documents at Sr. No. 10 to 19 before Ld. CIT(A). However, in this regard no permission under Rule 46A was sought by the assessee during the appellate proceedings before Ld. CIT(A). Since the burden of proof was squarely on the assessee to establish the nature and source of credits appearing in the bank account, which he failed to discharge in accordance with procedure laid down by law.
7. Be that as it may without going into the merits of the claim raised by the assessee it is an admitted fact that assessee had not filed documents at Sr. No. 10 to 19 before the AO and had only filed before Ld. CIT(A) for the first time without seeking permission to lead additional evidences, which are factual in nature and required verification. Therefore, we are of the view that the matter in question needs to be restore back to the file of Ld. CIT(A) for denovo decision of the appeal subject to cost of Rs. 5000/- imposed upon the assessee which shall be deposited in the Prime Minister Relief Fund and a copy of the receipt shall be placed on the file before Ld. CIT(A) within 30 days from the date of receipt of this order. We also grant liberty to the assessee to file application for leading additional evidences, if so advised. The assessee
Before parting, we make it clear that our decision to restore the matter back to the file of the Ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute which shall be adjudicated by the Ld. CIT(A) independently in accordance with law.
In the result the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 29/12/2025.