NEETU SINGH,UNNAO vs. INCOME TAX OFFICER, UNNAO

PER KUL BHARAT, VICE PRESIDENT.:

This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax/National Faceless Appeal Centre (NFAC), Delhi dated 28.02.2026, pertaining to the assessment year 2018-19. The assessee has raised the following grounds of appeal: -

“1. Because on facts and in circumstances of the case and in law, the Ld CIT (Appeals) has erred in holding that the delay in filing the appeal cannot be condoned, by ignoring the facts that there was sufficient and reasonable cause for such delay in filing the appeal before him. 2. Because on facts and in circumstances of the case and in law, the Ld CIT (Appeals) has erred in holding that the delay in filing of the appeal cannot be condoned, by ignoring the facts that there was no negligence and undue diligence on the part of the appellant towards delay in filing of the appeal before him. 3 Because on the facts and in the circumstances of the case and in law, the appellant prays that the delay may kindly be condoned. The appellant prays that the appeal may be heard on merits by Hon'ble

ITA No. 652/LKW/2026 Page 2 of 6 Bench itself or the Ld CIT (Appeals) may be directed to hear and to decide the appeal on its merit after allowing adequate opportunity of being heard to the appellant-assessee. 4. Because on facts and in law, the Ld CIT (Appeals) has erred for confirming the action of assessing officer without appreciating the fact that the impugned assessment was passed without ensuring the compliance of notice issued under section 133(6) of the Income Tax Act, 1961 during the course of assessment proceedings by the assessing officer himself. 5. Because on facts and in law, the Ld CIT (Appeals) has erred in dismissing the appeal in limine without deciding the issue of its merit and thereby in default confirming the impugned addition of Rs. 6,47,260/- made under section 69A of the Income Tax Act, 1961 as unexplained money being cash deposits. 6. Because on facts and in law, the Ld CIT (Appeals) has erred in dismissing the appeal in limine without deciding the issue of its merit and thereby in default confirming the impugned addition of Rs. 1,37,72,547/-made under section 69A of the I.T. Act, 1961 as unexplained money being cash withdrawals from unexplained sources. 7. Because on facts and in law, the Ld CIT (Appeals) has erred in dismissing the appeal in limine without deciding the issue of its merit and thereby in default confirming the impugned addition of Rs. 2,175/- made as undisclosed interest income and taxable in the eye of law. 8. Because on facts and in law, the Ld CIT (Appeals) has erred for confirming the impugned assessment order without considering the facts that the assessment proceedings were wrongly initiated by issuance of notice under section 148 r.w.s. 147 of the Income Tax Act, 1961 as there was no such income escaped in the assessment year 2018-19. 9. Because on facts and in law, the Ld CIT (Appeals) has erred for ignoring the principle of natural justice since no reasonable and sufficient opportunity of being heard has been provided to the appellant-assessee. 10. Because on facts and in law, the Ld CIT (Appeals) has erred in confirming the action of the assessing officer for penalty proceedings initiated under section 270A, 272 AAC (1) and 272A(1)(d) of the Income Tax Act, 1961. 11. Because on facts and in law, the Ld CIT (Appeals) has erred in confirming the action of the assessing officer for charging of interest under section 234A, 2348 and 234F of the Income Tax Act, 1961. 12. Because on facts and in law, the appellate order dated 28/02/2026 passed by the Ld CIT (Appeals) dismissing the appeal is arbitrary, unjustified & bad in law, and therefore deserve to be cancelled. 13. Because on facts and in circumstances of the case, the appellant reserves the right to amend, to introduce / add to other grounds of appeal and new facts with the kind permission of your Honour.”

ITA No. 652/LKW/2026 Page 3 of 6 2. Apropos to the grounds of appeal, the Ld. Counsel for the assessee has filed detailed submissions of fact and reiterated the submissions as made therein. The Ld. Counsel for the assessee contended that there is gross miscarriage of justice in this case. It is further submitted that the First Appellate Authority dismissed the appeal purely on the ground of the delay without looking to the merits of the case. He further submitted that under the scheme of State Bank of India (SBI) for financial inclusion of remote area of the country. The assessee was employed as a business correspondent of SBI. The bank has opened Customer Service Point (CSP) to facilitate their customers at remote unbanked or under banked areas. Under the scheme, a current account was opened and when a bank customer arrived at CSP, the business correspondent after checking depositors balance, debited his savings accounts and credited his own current account and made the payment to the bank customer from the cash available with him. It was submitted that the cash withdrawn by the assessee represented withdrawals from the accumulated credit balance available in her current bank account. Although the cash withdrawals appeared to be of a large amount, in fact, they did not represent the income of the assessee, as the amounts were merely withdrawn from the accumulated credit balance available in the assessee's bank account. The bank for rendering such services to its customers paid commission to the assessee @ 1% or 2%. The assessee has received gross commission of Rs.2,90,874/- which was found credited in the saving bank of the assessee and interest income amounting to Rs.2,175/-. However, after deducting the expenditure incurred for earning the said commission income, the assessee's total income fell below the taxable limit. The provisions of Section 87A of the Income Tax Act, 1961 (“Act”, for short) is also applicable in the facts of the present case.

ITA No. 652/LKW/2026 Page 4 of 6 Therefore, the reason for non-filing of income tax return for the relevant assessment year was that the income from all sources of the assessee was below the taxable limit. It was further submitted that the assessee could not be effectively represented before the Ld. CIT(A). The learned Counsel also drew our attention to the certificate dated 10.01.2024 issued by the State Bank of India, Nawabganj Branch, Unnao, Uttar Pradesh, confirming that the assessee was acting as a Business Correspondent of the bank. Ld. Counsel further submitted that the Ld. CIT(A) has dismissed the appeal purely on the ground of the delay without going into the merit of the case. The such action of the Ld. CIT(A) is contrary to the settled principles of law. He, therefore, prayed that the impugned order may be set aside and the assessment be restored to the Assessing Authority.

ITA No. 652/LKW/2026 Page 5 of 6 Bank of India. Pertinently, the authorities below have not examined this aspect of the matter. It is a well-settled law that no tax liability can be fastened on an assessee, if he is not liable for such tax in accordance with the provisions of the Act. It is also a well-settled law that, while considering an application for condonation of delay, the concerned authority is required to take into consideration the merits of the case. If, it appears that the assessee has a strong prima facie case and has been wrongly subjected to tax, the authority concerned should adopt a liberal approach while considering the application for condonation of delay. This view finds support from the judgment of the Hon'ble Supreme Court in the case of Collector, Land Acquisition v. Mst. Katiji & Others (1987) 167 ITR 471 (SC). In the present case, the assessee has made out a prima facie case for condonation of delay. In our view, the Ld. CIT(A) ought to have condoned the delay and decided the appeal on its merit. It is also noted that the assessment order is ex parte to the assessee passed u/s 144 of the Act. Therefore, looking to the totality of the facts as stated by the assessee needs thorough verification at the end of AO, we hereby set aside the impugned order and restore the assessment to the file of the Assessing Officer to make assessment afresh, after conducting proper inquiry from the bank for verification of correctness of the claim of the assessee and the assessee would co-operate with the Assessing Authority for furnishing the requisite evidence as may be called for by the Assessing Officer. Grounds raised in this appeal are allowed for statistical purposes.

ITA No. 652/LKW/2026 Page 6 of 6 5. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 31/07/2026.

Sd/- Sd/- [ननखखल चौिरी] [कुल भारत] [NIKHIL CHOUDHARY] [KUL BHARAT] लेखा सदस्य/ACCOUNTANT MEMBER उपाध्यक्ष/VICE PRESIDENT ददनांक/DATED: 31/07/2026 Vijay Pal Singh, (Sr. PS)