UDAYAKUMAR,CHENNAI vs. DEPUTY COMMISSIONER OF INCOME TAX, NON CORP. CIR 22(1) (TBM), CHENNAI

The brief facts of the case are that the assessee is an individual and had not filed his return of income for the AY 2013-14. As per the information available with the department, the AO found that the assessee has made payment of Rs.19,02,354/- in settlement of his credit card bills and received a sum of Rs.9,72,761/- as salary income 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.2013-14. Further, the AO issued statutory notices and called for details. In response, the assessee filed return of income on 22.02.2022 for A.Y.2013-14, declaring income from salary at Rs.4,14,381/- and claiming TDS of Rs.14,304/- which was an invalid return as per CPC Portal and he has not furnished any documentary evidence on the concealment of income. On perusal the documents available on record, the AO made the additions to the amount of Rs.9,72,761/- as income from salary and amount of Rs.19,02,354/- as unexplained expenditure u/s.69C of the Act and concluded the assessment proceedings by passing an order u/s.147 r.w.s 144 r.w.s 144B of the Act dated 27.02.2022.

Further, the AO initiated penalty proceedings u/s.271(1)(c) of the Act for concealment of income. During the penalty proceedings the assessee stated that the assessee had given all the documents to his consultant at Chennai to file ITR but the consultant failed to file ITR and the assessee was not aware of the fact that ITR was not filed. On perusal of the reply submitted by the assessee, the AO was not convinced and imposed a penalty of Rs.7,13,312/- being 100% of tax payable on income by passing a penalty order u/s.271(1)(c) of the Act dated 29.08.2022.

Aggrieved by the orders of the AO, the assessee filed two separate appeals before the ld.CIT(A), NFAC, Delhi on 11.12.2025 with a delay in filing the appeals.

At the outset, we observed that the ld.CIT(A) dismissed the appeals in limine filed by the assessee without condoning the delay in filing the appeals by 1,353 days and 1,170 days respectively. Aggrieved by the impugned orders of the Ld.CIT(A), the assessee is in appeal before us.

The ld.AR submitted that the assessee is not well educated, is dependent upon tax consultants for compliance, and resides in an area where there is a shortage of professional assistance. The assessee was unaware of the assessment order passed by the Assessing Officer due to lack of knowledge of income-tax procedures. Further, the ld.AR of the assessee argued that the ld.CIT(A) erred in upholding the addition of Rs.19,02,354/- u/s.69C of the Act as unexplained expenditure despite the assessee has offered 8% of such amount as presumptive income u/s.44AD of the Act in the tax computation filed and paid applicable taxes thereon in facts and circumstances of the case. In view of the above, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO by providing one more opportunity. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment 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 1,353 days and 1,170 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 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 the appeals before the first appellate authority. Since the assessee has failed to participate before the Assessing Officer as well as the ld.CIT(A), we levy the cost of Rs.30,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the assessee shall satisfy the payment of cost before the authorities.

Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we deem it fit to give one more opportunity to the assessee. Therefore, we condone the delay in filing the appeals before ld.CIT(A) as the assessee had filed the condonation of delay in his form 35 itself and hence, we set aside the order of the ld.CIT(A) and remit the matter back to the file of AO and direct the AO to de novo frame the assessment order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.

Since the order in quantum appeal in ITA No.2484/Chny/2026 (supra) has been set aside and remitted back to the AO, the consequential penalty order passed u/s.271(1)(c) of the Act dated 18.06.2024, which is dismissed by the ld.CIT(A) is likewise hereby set aside and remitted back to AO 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.