RAMASAMY PONNUSAMY,TIRUPPUR vs. ITO, TIRUPPUR

The brief facts of the case are that the assessee is an individual and agriculturalist and had not filed his return of income for the AY 2018-19. As per the information available with the department, the Assessing Officer found that the assessee made cash deposits to the tune of Rs.16,89,790/- and received interest amounting to Rs.19,047/- and made time deposit amounting to Rs.20,16,087/- into his bank account maintained with HDFC Bank during the assessment year. The case was re-opened u/s.147 of the Act, a notice u/s.148 of the Act was issued to the assessee. In response, the assessee failed to file the return of income for A.Y.2018-19. Further, the AO issued statutory notices and called for details. However, the assessee chose to be silent and did not respond to any of the notices and hence, the AO made additions to the tune of Rs.16,89,790/- as unexplained cash deposit u/s.69A of the Act and amount of Rs.19,047/- as undisclosed interest and amount of Rs.20,16,087/- as unexplained time deposit u/s.69 of the Act and concluded the assessment proceedings by passing an exparte order u/s.147 r.w.s 144 r.w.s 144B of the Act dated 04.03.2024.

Further, the AO initiated penalty proceedings u/s.271AAC(1) of the Act and notices were issued to the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the AO imposed a penalty of Rs.2,89,058/- being 10% of tax payable on income by passing a penalty order u/s.271AAC(1) of the Act dated 13.09.2024.

Aggrieved by the orders of the AO, the assessee filed two separate appeals before the ld.CIT(A), NFAC, Delhi on 17.02.2026 with a delay in filing the appeals.

At the outset, we observed that the ld.CIT(A) dismissed both the appeals in limine filed by the assessee without condoning the delay in filing the appeals

The ld.AR submitted that the assessee was unaware of the hearing notices and assessment order passed by the AO during the relevant period and he became aware of the assessment order passed by the AO only after receiving receipt of notice for recovery proceedings. Therefore, the assessee could not file the appeals before the first appellate authority within stipulated time limit. Further, the ld.AR of the assessee argued that the AO/ld.CIT(A) ought to have noted that the entire cash deposits have been made from the agricultural earnings and accumulated savings over a period of time. Therefore, ld.AR prayed for one more opportunity to be provided to the assessee to represent his case before the ld.CIT(A) in the interest of natural justice. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the ld.CIT(A) to complete the appeal proceedings effectively.

Per contra, the ld.DR submitted that the appeal was to be filed before the ld.CIT(A) by the assessee within 30 days of the service, but the assessee has filed these appeals with delay of 685 days and 492 days respectively. The assessee has been negligent in filing the appeals within the time limit provided and hence prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO have passed exparte orders by considering the information available with the department and on appeal the same have been dismissed in limine by the ld.CIT(A), NFAC due to delay in filing of the appeals before the first appellate authority.

Since the order in quantum appeal in ITA No.1898/Chny/2026 (supra) has been set aside and remitted back to the ld.CIT(A), the consequential penalty order passed u/s.271AAC(1) of the Act dated 13.09.2024, which is dismissed by the ld.CIT(A) is likewise hereby set aside and remitted back to ld.CIT(A) to decide the issue on merit along with the quantum appeal.

In the result, both the appeals filed by the assessee are allowed for statistical purposes.