ANIRUDDHA MUKHERJEE,RAHARA BARRACKPUR vs. INCOME TAX OFFICER, WARD - 2(4), KUSHINAGAR

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH (SMC), VARANASI BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA Nos.196 & 197/VNS/2024 Assessment Year: 2011-12 Aniruddha Mukherjee v. The Income Tax Officer House No.1A Ward 2(4) Mission Para, Rahara Kushinagar Opposite United Bank of India Rahara Barrackpur – II North 24 Parganas (W.B) TAN/PAN:AFZPM5532K (Applicant) (Respondent) Applicant by: Shri Ashish Bansal, Advocate Respondent by: Shri Sabayasachi Chakraborty, D.R. O R D E R The Appeal filed by the assessee in ITA No.196/VNS/2024 is directed against the order dated 20.09.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) in quantum proceedings and Appeal in ITA No.197/VNS/2024 is directed against the order dated 20.09.2024 passed by the NFAC confirming the penalty under section 271(1)(c) of the Act for Assessment Year 2011-12.

2.0 The brief facts of the case are that during the captioned assessment year, the assessee was an employee of M/s Simplex Infrastructure Limited and derived income from salary and interest. The Income Tax Department was in possession of information that the assessee had made cash deposits totaling to

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Rs.21,12,000/- in his Saving Bank Account. The case of the assessee was reopened under section 147 of the Income Tax Act, 1961 (hereinafter called 'the Act’) after issuing notice under section 148 of the Act to the assessee. However, in response to notice under section 148 of the Act, there was no response from the side of the assessee. Thereafter, the AO issued statutory notices to the assessee, requiring the assessee to explain the source of cash deposits with supporting evidence. However, there was still no response from the side of the assessee. The AO, subsequently, issued a show cause notice to the assessee for completion of assessment under section 144 of the Act, vide which the assessee was required to furnish the details of source of cash deposits. Since again there was no response from the side of the assessee, the AO called for information under section 133(6) of the Act from the State Bank of India, Kasya, Kushinagar, which confirmed cash deposits of Rs.27,52,119/- by the assessee under appeal in Account No.30055110846 during the year under consideration. Since the assessee had failed to file the return of income for the year under consideration and had also failed to substantiate and explain the source of the aforesaid cash deposits, the AO treated the cash deposits of Rs.27,52,120/- as unexplained deposits of the assessee and added the same to the total income of the assessee.

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2.1 The AO, subsequently, initiated penalty proceedings under section 271AAC(1) of the Act on the total addition of Rs.27,52,119/-. The AO worked out the penalty under section 271(1)(c) of the Act at Rs.7,00,025/- and imposed a penalty of Rs.7,00,025/-.

2.2 Aggrieved, the Assessee preferred appeals before the NFAC against the quantum addition as well as the penalty. The appeal filed by the assessee against the order of the AO in quantum proceedings was dismissed by the Ld. First Appellate Authority for the reason of delay in filing the appeal before the Ld. First Appellate Authority and the appeal of the assessee against the order of the AO imposing penalty under section 271(1)(c) of the Act was dismissed by the Ld. First Appellate Authority by confirming the order of the AO.

2.3 Now the assessee has approached this Tribunal challenging the orders of the NFAC, by raising the following grounds of appeal:

GROUNDS IN ITA NO.196/LKW/2024:

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below and there occurred violation of principles of natural justice which was duly available to the appellant, accordingly, the orders of the authorities below deserve to be set aside and the matter be restored back. 12. BECAUSE order appealed against, is contrary to facts, law and principles of natural justice. GROUNDS IN ITA NO.197/LKW/2024:

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271(1)(c) as also order passed under the said section is wholly illegal and void ab-initio. 5. BECAUSE the source of cash deposit aggregating to Rs.22,69,000/- and not Rs.27,52,119/- as alleged in the assessment order dated 27.12.2018 was out of cash withdrawal made by the appellant from the available balance in his bank account, the ld. Assessing Officer has erred in adding the same as alleged unexplained cash deposit and levying penalty of Rs.7,00,025/- on the same under section 271(1)(c) of the Act for alleged concealment of income and the CIT(A) has further erred in affirming the same in the impugned order dated 20.09.2024. 6. BECAUSE simultaneous appellate proceedings relating to quantum appeal and penalty appeal were being carried out by the appellate authority on the e-portal, the reply of the appellant by mistake were interchanged and uploaded on the e-portal, the CIT(A) on the basis of interchanged reply dismissed the appeal of the appellant by observing that "I find that the submission of the appellant is only against the order passed u/s 144, and the initiation of proceedings u/s 147 and issue of notice u/s 148 dated 29/03/2018 and noting against the imposition of penalty u/s 271(1)(c) of the Act of Rs.7,00,100." 7. BECAUSE there was reasonable cause due to which the reply relating to penalty could not be placed by the appellant before the ld. Assessing Officer as he was completely unaware with the assessment/ penalty proceedings against him and mistake occurred while filing the response in the penalty appeal before the appellate authority, penalty of

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Rs.7,00,025/- levied upon the appellant is in complete violation of principles of natural justice. 8. BECAUSE in any case, the impugned penalty order lacks vital ingredients of a valid penalty order and the same is not sustainable either on facts or in law. 9. BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice. 2.4 During the course of hearing before me, the Ld. Authorized Representative for the assessee (Ld. A.R.), inviting my attention to Grounds No.6 & 7 of appeal in ITA No.196/VNS/2024, submitted that the Ld. First Appellate Authority had erred in law and on facts in dismissing the appeal of the assessee as non-maintainable without condoning the delay in filing the appeal. The Ld. A.R., therefore, prayed that, in the interest of justice, the matter may be restored to the file of the Ld. First Appellate Authority for deciding the same on merits after condoning the delay in filing the appeal and after providing reasonable opportunity of being heard to the assessee. It was further prayed that the appeal of the assessee in ITA No.197/VNS/2024 also may be restored to the file of the Ld. First Appellate Authority along with appeal of the assessee in No.196/VNS/2024.

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3.0 The Ld. Sr. D.R. objected to the restoration of appeals to the file of the Ld. First Appellate Authority and submitted that both the appeals of the assessee be dismissed.

4.0 I have heard head the both the parties and have also perused the material on record. Looking into the facts of the case, I restore ITA No.196/VNS/2024 to the Office of the Ld. First Appellate Authority with the direction to the assessee to explain the delay in filing the appeal before the Ld. First Appellate Authority. If the assessee succeeds in explaining the delay in filing the appeal, the Ld. First Appellate Authority shall condone the delay in filing of the appeal and decide the appeal of the assessee on merits after providing an opportunity to the assessee to present his case. I also caution the assessee to fully comply with the directions of the Ld. First Appellate Authority in the set- aside proceedings when called upon to do so, failing which, the Ld. First Appellate Authority would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.

4.1 Since the quantum appeal has been restored to the Ld. First Appellate Authority, the penalty appeal is also being restored to the file of the Ld. First Appellate Authority for re- adjudication after giving proper opportunity to the assessee.

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5.0 In the result, both the appeals of the assessee stand allowed for statistical purposes.

Order pronounced in the open Court on 23/07/2026.

Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:23/07/2026 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR By order

Assistant Registrar/DDO