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Facts
The assessee's assessment was completed under Section 144 of the Income Tax Act, 1961, with an addition of Rs. 41,38,500/- for unexplained cash deposits. The assessee appealed to the CIT(A) who sustained the AO's order, and the assessee is now in appeal before the Tribunal.
Held
The Tribunal condoned the delay in filing the appeal due to the assessee's ill-health and lack of support. The Tribunal admitted additional evidence and remitted the matter back to the AO for fresh examination, considering the principle of substantial justice.
Key Issues
Whether to admit additional evidence and remit the case to the AO for verification of cash deposits, considering the assessee's reasons for non-compliance and delay.
Sections Cited
144
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Income Tax Appellate Tribunal, MUMBAI “J(SMC
Before: SHRI VIKRAM SINGH YADAV & MS. KAVITHA RAJAGOPAL
Date of Hearing : 07-10-2025 Date of Pronouncement : 13-10-2025 O R D E R PER VIKRAM SINGH YADAV, A.M :
This is an appeal filed by the assessee against the order of the Ld.Addl/JCIT(A)-Panchkula, dated 04-12-2024, pertaining to Assessment Year 2017-18.
Briefly the facts of the case are that the assessment in this case was completed u/s.144 of the Income Tax Act, 1961 („the Act‟) vide order dt. 09-12-2019, wherein the addition of Rs. 41,38,500/- was made on account of un-explained cash deposit in the bank account maintained in the name of the assessee. The assessee subsequently, carried the matter in appeal before the Ld.CIT(A), who has since sustained the order of the AO and against the said order, the assessee is in appeal before us.
During the course of hearing, the assessee appeared in person and submitted that due to his continued ill-health and lack of appropriate support from the tax consultant, the matter could not be attended to before the lower authorities and even there is a delay in filing the appeal before this Tribunal. In this regard, our reference was drawn to the affidavit submitted by him seeking condonation of delay. Further, it was submitted that he was running a retail medical shop and sales are largely done in cash and, therefore, the cash so deposited in the bank account is arising out of his regular business of retail sale of the medicines. It was submitted that for the year under consideration, he has reported sales turnover of Rs. 1,21,47,016/- and, therefore, the cash so deposited in the bank account is clearly out of sale proceeds duly reported as part of his return of income. It was submitted that due to his medical conditions, necessary documentation could not be submitted before the AO as well as before the Ld.CIT(A) and in light of the same, he wishes to submit the additional evidences by way of sales and purchase ledgers, VAT returns, daily records of purchase and sales, bank statement, cash ledger and Balance Sheet and profit/loss account and it was submitted that in the interest of justice,, the additional evidence may be admitted and he may be granted one more opportunity and the matter may be remitted to the file of the AO for necessary verification. It was submitted by him that in all earnest, he shall attend to the proceedings before the AO and file necessary information/documentation.
The Ld. DR has been heard, who has submitted that there is lack of compliance on the part of the assessee before the AO as well as before the Ld.CIT(A). At the same time, it was fairly admitted that the matter has been decided ex-parte qua the assessee and it was submitted that where the Bench so decide, to admit the additional evidences, the matter may be remitted to the file of the AO for necessary verification.
We have heard the rival contentions and perused the material available on record. We find that there was reasonable cause on the part of the assessee in terms of non-submission of the requisite documentation before the AO as well as before the Ld.CIT(A) and the delay in filing the present appeal in view of his ill-health and lack of proper support and guidance from the tax consultant. It is equally relevant to note that assessee is in the business of retail medical shop and has reported sales turnover of Rs. 1,21,47,016/- and, therefore, it is important to verify and examine the contentions so raised by the assessee in terms of the cash which has been found deposited in the bank account as to whether the same is part of the sales turnover, already reported as part of the return of income and the additional evidences are thus germane to the issue under consideration. Therefore, considering the overall facts and circumstances of the case and keeping the principle of substantial justice into account, we find that it would be just and fair that the delay in filing the appeal is condoned, the additional evidences so sought to be submitted by the assessee are admitted and the matter be remitted to the file of the AO for carrying out the necessary examination. Accordingly we set aside the matter to the file of AO for necessary examination of the additional evidences so submitted by the assessee and decide the matter afresh as per law after providing reasonable opportunity to the assessee. The assessee is also directed to comply with the notices so issued by the AO, attend to the proceedings and furnish necessary information/documentation so called for/as so advised.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 13-10-2025 Sd/- Sd/- [MS. KAVITHA RAJAGOPAL] [VIKRAM SINGH YADAV] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 13-10-2025 TNMM Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order
Dy./Asst. Registrar I.T.A.T, Mumbai