CHARANJIT SINGH, HUF,PATIALA vs. INCOME TAX OFFICER, WARD--3, PATIALA

आदेश / O R D E R RAJESH DAMODARLAL SHARMA (Judicial Member) 1. Aforesaid appeal by the assessee for Assessment Year (AY) 2013-14 arises out of an order of learned Commissioner of Income Tax (Appeals), NAFC [CIT(A)] dated 05.01.2026 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s 147 r.w.s. 144 r.w.s. 144B of the Act on 26.03.2022. 2. Brief facts as narrated by the assessee in the case records are as follows:

1.The appellant is a Hindu Undivided Family engaged primarily in agricultural activities and deriving agricultural income. During the relevant assessment year 2013-14, the appellant had no taxable income except nominal bank interests which was below the basic exemption limit. Therefore, the appellant did not file a return of income for the assessment year under consideration as there was no income chargeable to tax under the Income-tax Act, 1961. 2. On the basis of AIR/ITS information relating to cash deposits in a savings bank account with Punjab & Sind Bank, the learned Assessing Officer initiated reassessment proceedings under section 147 by issuing notice under section 148. 3. Verification letter was issued to the appellant to furnish the source of cash deposit of Rs.1,95,00,000/- in his savings bank account. In compliance to this appellant submitted the response, that they are agriculturist and the money deposited in the bank is out of sale of agricultural land situated at Village Sanagat Pursodian, Distt. Fatehgarh Sahib, Khewat Khatooni No.95.210/124.291 which is 78 kanal 8.5marle 4. Subsequently, the Assessing Officer reopened the assessment under section 147 and completed the assessment u/s 147 r.w.s. 144 & 144B vide order dated 26.03.2022, making an addition of ₹1,95,00,000/- u/s 69A on account of alleged unexplained cash deposits in the bank account. 5. Assessment order was passed under the faceless regime during COVID-19 period and was not effectively communicated to the appellant, as the email id registered at the portal belongs to the consultant who assisted in filing Income Tax Return and the appellant only came to know of the assessment only upon receipt of consequential penalty notices, whereafter the appeal was filed promptly and without any further delay. 6. Aggrieved by the assessment order, the appellant filed an appeal before the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre. The appeal was filed with a delay of approximately five months, for which a detailed application seeking condonation of delay was submitted along with the Form-35, explaining that the assessment order had not been effectively served and that the appellant became aware of the assessment only upon receipt of consequential penalty notices. 7. Before the learned CIT(A), the appellant also explained that the cash deposits were fully explained and represented sale proceeds of rural agricultural land, which does not fall within the definition of a “capital asset” under section 2(14)(iii) of the Act, and therefore no income chargeable to tax had arisen. 8. The learned CIT(A), however, declined to condone the delay in filing the appeal and dismissed the appeal in limine under section 249(3) of the Act, without adjudicating the grounds raised on merits, and consequently confirmed the addition made by the Assessing Officer. 9. Being aggrieved by the order passed by the learned CIT(A), the appellant has preferred the present appeal before the Hon’ble Income Tax Appellate Tribunal.

The Ld. AR stated that the source of deposits was agricultural land and the assessee has good case on merits, However, Ld. CIT(A) has dismissed the appeal for want of condonation of delay of 5 months. The Ld. AR pleaded for adjudication of the appeal on merits which has been opposed by Ld. Sr. DR. 3. From assessee’s submissions during first appeal, it could be gathered that the delay ahs happened due to the fact that the assessee did not receive any notice of assessment proceedings nor the assessment order was served. No effective knowledge of completion of assessment was available the appellant at the relevant time. The appellant came to know about the same only upon receipt of penalty notices. Thereafter, the assessee obtained copies of the assessment record and filed the appeal without any further delay. The delay has occurred due to lack of proper service of assessment order which constitutes reasonable and sufficient cause within the meaning of Section 249(3) of the Act. It is submitted by the assessee that the assessee has strong meritorious case on fact and law and the dismissal of the appeal would cause irreparable hardship to the assessee. 4. In our considered opinion, considering the facts of the case, the delay could have been condoned by Ld. CIT(A). Nevertheless, we set aside the impugned order and restore the appeal back to the file of Ld. CIT(A) for adjudication of appeal on merits with a direction to the assessee to plead and prove its case forthwith. The issue of delay would not be raised by Ld. CIT(A).

-Sd- -Sd- (MANOJ KUMAR AGGARWAL) (RAJESH DAMODARLAL SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER AS Dated: 12-08-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR – 9A CHANDIGARH