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Facts
The Assessee, a co-operative society, appealed against an order confirming an addition of Rs. 5,67,000 made under Section 69A for unexplained cash deposits during demonetization. The appeal was delayed by 198 days due to a travel abroad by the person handling the tax affairs, and an erroneous impression that relief was granted for this year as in previous years.
Held
The Tribunal condoned the delay, citing the Supreme Court's decision in Collector of Land Acquisition Vs. Mst. Katiji & others, emphasizing substantial justice over technicalities. The Tribunal found that the Assessee had provided sufficient documentary evidence regarding the nature and source of cash deposits, which the lower authorities failed to appreciate, and thus deleted the addition.
Key Issues
Whether the addition of Rs. 5,67,000 for unexplained cash deposits made during the demonetization period is justified, and whether the lower authorities correctly appreciated the evidence submitted by the Assessee.
Sections Cited
144, 69A, 234A, 234B, 234C, 234D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “J (SMC
IN THE INCOME TAX APPELLATE TRIBUNAL “J (SMC)” BENCH, MUMBAI SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER Chandraprabha Co-operative Credit Society Ltd. 10, Parshuram Building, Ram Maruti Road, Dadar (West), Mumbai – 400028. Maharashtra. [PAN:AAABC0416G] …………. Appellant Vs Income Tax Officer 22(1)(6), Mumbai Piramal Chambers, Mumbai - 400012 Maharashtra. …………. Respondent Appearance For the Appellant/Assessee : Ashish Thakurdesai For the Respondent/Department : Shri Aditya Rai Date Conclusion of hearing : 18.09.2025 Pronouncement of order : 29.09.2025 O R D E R [ Per Rahul Chaudhary, Judicial Member:
1. 1. The present appeal preferred by the Assessee is directed against the order, dated 23/09/2024, passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘the CIT(A)’] whereby the Ld. CIT(A) had partly allowed the appeal against the Assessment Order, dated 18/12/2019, passed under Section 144 of the Income Tax Act, 1961 for the Assessment Year 2017-2018.
2. The appeal preferred by the Assessee, a co-operative society, was delayed by 198 days. As per the affidavit filed by the Assessee in support of the application seeking condonation of delay, the delay was neither intentional nor due to negligence but was occasion on account 2 Assessment Year 2017-2018 of the fact that the person dealing with the tax affairs of the Society Company was travelling to United States of America for visiting of his daughter. The impugned order passed by the Ld. CIT(A) was received to the Assessee during the period when the said person was not in India. Further, the aforesaid order was received alongwith other orders passed by the Ld. CIT(A) for the Assessment Year 2012-2013 and 2015-2016. Since, the Ld. CIT(A) had granted relief to the Assessee in the said orders, the concerned person of the co-operative society was under the impression that relief was also been granted for the Assessment Year 2017-2018. On account of the aforesaid the conclusion the appeal could not be file within the time prescribed. Subsequently, it was discovered that the order passed by the Ld. CIT(A) for the Assessment Year 2017-2018 was not identical to the order passed for the Assessment Year 2012-2013 and 2015-2016 since the Assessee was only granted partial relief. Thereafter, steps were taken by the Assessee to get the present appeal before the Tribunal.
The Hon’ble Supreme Court had, in the case of Collector of Land Acquisition Vs. Mst. Katiji & others AIR 1987 1353 (SC), held that the substantial justice should prevail over technical considerations. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. In the present case, there is nothing on record to doubt the bonafides of the reasoning given by the Assessee for the delay in filing the present appeal. In our view, the Assessee was not set to gain anything from delaying the filing of the present appeal.
Therefore, keeping in view the aforesaid judgment of the Hon’ble Supreme Court in the case of Collector of Land Acquisition Vs. Mst. Katiji & others (supra), we condone the delay of 198 days in filing the 3 Assessment Year 2017-2018 present appeal and proceed to examine the grounds raised by the Assessee which reads as under:
“1. On facts, in circumstances of the case and in law, the learned Commissioner of Income Tax – Appeals, National Faceless Appeal Centre erred in confirming the addition of Rs.5,67,000/- u/s. 69A of the Income Tax Act, 1961.
On facts, in circumstances of the case and in law, the learned Commissioner of Income Tax – Appeals, National Faceless Appeal Centre ought to have deleted interest charged of u/s.234A, u/s.234B, u/s.234C and u/s.234D of the Income Tax Act, 1961.”
The relevant facts in brief are that the Assessee did not file return of income for the Assessment Year 2017-2018. The case of the Assessee was selected for scrutiny and best judgment assessment was framed on the Assessee under Section 144 of the Act vide Assessment Order, dated 18/12/2019. The Assessing Officer, inter-alia, made an addition of INR.5,67,000/- under Section 69A of the Act holding that the cash deposits amounting to INR.5,67,000/- made during the demonetization period in the bank account of the Assessee as remained unexplained.
In appeal preferred by the Assessee against the Assessment Order, dated 18/12/2019, the Ld. CIT(A) admitted the additional evidence furnished by the Assessee after taking into consideration the remand report received from the Assessing Officer. However, the Ld. CIT(A) declined to grant any relief to the Assessee on this issue and vide impugned order, dated 23/09/2024, confirmed the addition made by the Assessing Officer under Section 69A of the Act observing that the Assessee had failed to explain and justify the source of cash deposits of INR.5,67,000/- made in the bank account of the Assessee during the demonetization period.
Being aggrieved, the Assessee has now preferred the present appeal 4 Assessment Year 2017-2018 before the Tribunal on the Grounds reproduced at Paragraph 2 above.
During the course of hearing, the Assessee had placed on record Paper Book running into 112 pages and had submitted that the documents at Page No.1 to 92 of the Paper Book were filed by the Assessee before the Ld. CIT(A), taking us to the date-wise cash deposit summary, the relevant pages of the bank statement, day book of the relevant dates and supporting details of Agent Collections and other cash receipts, the Learned Authorized Representative for the Assessee submitted that the Assessee had furnished adequate details of source of cash deposits made into bank account of the Assessee. It was submitted that despite the aforesaid information/details/documents being available, the Ld. CIT(A) incorrectly concluded that the Assessee had failed to provide evidence regarding nature and source of cash receipts reflecting in cash book of the Assessee.
Per contra, the Learned Departmental Representative submitted that while the Assessee had provided the break-up or details, no supporting evidence were furnished to corroborate the same.
We have considered the rival submissions and have perused the following material forming part of record:
(a) Date wise Cash deposit Summary from 09.11.2016 to 31.12.2016 placed at Page No.1 to 1 of the Paper Book. (b) Relevant pages of bank statement – Saving account with Apna Sahakari Bank Ltd. placed at Page No.2 to 4 of the Paper Book. (c) Relevant pages of bank statement – OD account with Apna Sahakari Bank Ltd. placed at Page No.5 to 6 of the Paper Book. (d) Day Book of relevant dates placed at Page No.7 to 17 of the Paper Book. (e) Sub-day Book of relevant dates – Agent Collections placed at Page No.18 to 41 of the Paper Book.
5 Assessment Year 2017-2018 (f) Sub-day Book of relevant dates – Other credit and debit transaction other than agent collection placed at Page No.42 to 92 of the Paper Book.
On perusal of the above material, we find that the Assessee had furnished the details of cash deposits in the bank account of the Assessee during the demonetization period. The said details provided information about the nature and source of funds utilized by the Assessee. There is nothing on record to disbelieve the documents/details furnished by the Assessee. In our view, both the authorities below had failed to appreciate the documentary evidence furnished by the Assessee. Accordingly, we overturn the decision of the Ld. CIT(A) and delete the addition of INR.5,67,000/- made by the Assessing Officer under Section 69A of the Act. Accordingly, Ground No.1 raised by the Assessee is allowed.
Ground No.2 raised by the Assessee pertains to levy of interest under Section 234A, 234B, 234C and 234D of the Act the same is disposed off as consequential in nature.
In result, the present appeal preferred by the Assessee is allowed.