DEEPAK DEMBA,ULHASNAGAR vs. INCOME TAX OFFICER WARD 2(1), KALYAN, KALYAN

आदेश / ORDER

PER SHRI AMIT SHUKLA, JUDICIAL MEMBER:

The aforesaid appeal has been filed by the assessee against the impugned order dated 09.01.2026, passed by the learned Commissioner of Income-tax

ITA 3506/MUM/2026 DEEPAK DEMBA (Appeals), National Faceless Appeal Centre, Delhi, for the Assessment Year 2013-14, whereby the appeal of the assessee has been dismissed in limine on account of delay of 1537 days in filing the appeal. 2. Brief facts are that the assessee was a non-filer for the relevant assessment year. On the basis of information available in the system that cash aggregating to Rs.35,81,830/- had been deposited in his savings bank account maintained with ICICI Bank Ltd., proceedings under section 147 were initiated by issuance of notice under section 148 dated 12.02.2020. During the course of reassessment proceedings, notices under section 142(1) were issued from time to time requiring the assessee, inter alia, to furnish details regarding the nature of his business activities, bank statements and source of cash deposits. Since there was no effective compliance, the Assessing Officer proceeded to complete the assessment ex parte under section 147 read with section 144, vide order dated 10.09.2021, determining the total income at Rs.35,81,830/- by treating the entire cash deposits as income from unexplained sources. 3. The assessee challenged the said assessment order before the learned CIT(A); however, there was a delay of 1537 days in filing the appeal. It was explained before the learned CIT(A) that the assessee was an individual earning his livelihood as a commission agent and was dependent upon his Income-tax Practitioner for attending to his tax matters. According to the assessee, he was not informed about the assessment proceedings and came to know about the outstanding demand only when an Inspector of the Income-tax Department visited his premises for recovery, whereafter he engaged another practitioner and took steps for filing the appeal. The learned CIT(A), however, was not satisfied with the explanation furnished for such prolonged delay and, accordingly, declined to condone the delay and dismissed the appeal as barred by limitation without adjudicating the grounds on merits.

ITA 3506/MUM/2026 DEEPAK DEMBA 4. Before us, learned counsel submitted that the assessee has also filed an affidavit explaining the circumstances resulting in the delay and reiterated that the assessee had remained unaware of the proceedings as he was entirely dependent upon his earlier tax practitioner. It was further submitted that even the assessment itself has been framed ex parte without the assessee having any effective opportunity to explain the nature and source of the deposits. The bank account, according to the assessee, contained both deposits and corresponding withdrawals arising in the course of his activities and, therefore, treating the aggregate deposits as income without examining the bank account and the underlying transactions has resulted in substantial prejudice. Learned DR, on the other hand, relied upon the orders of the authorities below. 5. We have heard the rival submissions and perused the material placed before us. It is an undisputed fact that the assessment was framed ex parte under section 144 read with section 147 and the entire amount of cash deposits of Rs.35,81,830/- was brought to tax without examination of the assessee’s explanation or the underlying bank transactions. Thereafter, the first appeal also came to be dismissed at the threshold solely on the ground of limitation. Thus, effectively, the merits of the addition have remained unexamined at both stages. 6. Section 249(3) confers discretion upon the first appellate authority to admit a belated appeal where sufficient cause is shown for its delayed presentation. In the present case, the assessee has explained the circumstances leading to the delay and has also placed an affidavit on record. Having regard to the peculiar facts of the case, particularly that the assessment itself was completed ex parte and the substantive addition represents the entire deposits appearing in the bank account, we are of the opinion that the matter ought not to remain concluded merely on account of the delay without the assessee

ITA 3506/MUM/2026 DEEPAK DEMBA getting one effective opportunity to substantiate his case on merits. We, accordingly, condone the delay in filing the appeal before the learned CIT(A) in the interest of substantial justice. 7. Since the assessment itself was framed ex parte and the relevant factual aspects, including the nature of the assessee’s activities, bank transactions, corresponding withdrawals, if any, and the source and character of the deposits, require factual examination at the assessment stage, we consider it appropriate to restore the matter directly to the file of the Assessing Officer rather than remitting it to the learned CIT(A). Accordingly, the impugned order of the learned CIT(A) as well as the assessment order dated 10.09.2021 are set aside and the entire assessment is restored to the file of the Assessing Officer for de novo adjudication in accordance with law, after affording due and effective opportunity of hearing to the assessee. The assessee shall be at liberty to furnish the bank statements, details of withdrawals and deposits and all other evidence in support of his explanation. The Assessing Officer shall examine the same objectively and determine the income afresh uninfluenced by the earlier assessment. Needless to say, the assessee shall also cooperate in the proceedings and comply with the notices issued by the Assessing Officer. 8. We clarify that we have not expressed any opinion on the merits of the addition or on the other legal grounds raised by the assessee, and all such issues are left open for consideration in accordance with law. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 19th day of August 2026.

Sd/- Sd/-

(ARUN KHODPIA) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 19/08/2026 4

ITA 3506/MUM/2026 DEEPAK DEMBA Soumili, PS

Copy of the Order forwarded to: अपीलाथ�/The Appellant , 1. �ितवादी/ The Respondent. 2. आयकरआयु� CIT 3. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, 4. Mumbai गाड�फाइल/Guard file. 5.

BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI