MANOJ KUMAR SONKER,VARANASI vs. INCOME TAX OFFICER, 3(1), VARANASI

IN THE INCOME TAX APPELLATE TRIBUNAL VARANASI CIRCUIT BENCH, VARANASI BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.199/VNS/2024 Assessment Year: 2017-18 Manoj Kumar Sonker v. The ITO 3(1) Chaukaghat Varanasi Varanasi (U.P) TAN/PAN:FKLPS7279R (Applicant) (Respondent) Applicant by: None Respondent by: Shri Sabayasachi Chakraborty, D.R. O R D E R This appeal has been preferred by the Assessee against the order dated 11.01.2024, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2017-18.

2.0 The brief facts of the case are that the assessee was a commission agent dealing in vegetables and was running a proprietorship firm in the name and style “M/s Nageena Prasad & Sons”. The assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee had made huge cash deposits in his Bank Accounts. The Assessing Officer (AO) issued statutory notices to the assessee, requiring the assessee to explain the source of cash deposits made in his bank accounts during the year under consideration. However, there was no

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response from the side of the assessee. The AO, therefore, proceeded to complete the assessment on the basis of Best Judgment Assessment. Accordingly, the AO issued show cause notice dated 12.11.2019 to the assessee, requiring the assessee to show cause as to why the provisions of section 144 of the Income Tax Act, 1961 (hereinafter called “the Act’) may not be invoked. There was no response from the assessee. The AO also issued notice under section 133(6) of the Act to State Bank of India, Hoshiarpur, Punjab and obtained bank account statements of the assessee. The AO noticed that in the Bank Account No.31685693517 maintained with State Bank of India, the assessee had deposited cash of Rs.1,04,22,500/- during the demonetization period and Rs.25,13,000/- during the remaining period of the year under consideration and there were also other credit entries of Rs.6,93,810/-. Since the assessee failed to explain the source of the aforementioned cash deposits and credit entries, the AO treated the same as unexplained money of the assessee and added Rs.1,36,29,310/- (Rs.1,29,35,500 + Rs.6,93,810) to the total income of the assessee under section 68 of the Act. The AO completed the assessment under section 144 of the Act, assessing the total income of the assessee at Rs.1,36,29,310/-.

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2.1 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 271AAC and 271F of the Act, separately.

2.2 Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee and confirmed the order of the AO by passing an order ex-parte qua the assessee.

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

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asset during the course of search or survey and provisions cannot be invoked in a case where assessee has already declared the cash by way of depositing in the bank account and making necessary entries in the books of account regularly maintained by it. 4. That the Assessing Officer erred in making addition in respect of cash deposits without fully appreciating and following the instructions of CBDT issued in this regard and also without referring the matter to higher authorities for necessary approval as was required and also without fully examining the record in regard to cash deposits made by the Appellant as has been directed to be examined by CBDT. 5. That the Assessing Officer erred in making the addition in respect of cash deposited in the bank account which were represented by cash balance in the hands of the Appellant as per the books of account u/s 68/69A and in any case addition could not be made in respect of cash balance as per books of account as on 01.04.2016 in view of clear instructions of CBDT in this regard. 6. That the Assessing Officer erred in applying provisions of Section 115BBE of the Act in the facts and circumstances of the case of Appellant and determining the tax-liability as per the aforesaid Section without appreciating that provisions of Section 68/69A were not applicable in the facts of the case and, therefore, provisions of Section 115BBE of the Act could not be invoked. 7. That the Assessing Officer also erred in initiating penalty proceedings u/s 271AAC of the Act without recording proper satisfaction in that regard.

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4.0 During the course of hearing, it was brought to our notice that there was a delay of 174 days in filing the appeal and a Medical Certificate issued by the Senior Medical Officer, Pt. Deen Dayal Upadhyay Rajkeeya Chikitsalaya, Varanasi, has been filed, certifying that the assessee was advised to take complete bed rest from 02.01.2024 to 28.09.2024, i.e., during the relevant period of passing of the order by the Ld. First Appellate Authority. In view of these facts, the appeal could not be filed before the Tribunal within the stipulated period.

5.0 The Ld. Sr. D.R. submitted that since there is a delay of 174 days in filing the appeal, the same may be dismissed as un- admitted.

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6.0 In view of the fact that the assessee was on bed rest for a period of almost Nine months from the date of passing of the order by the Ld. First Appellate Authority, the assessee could not file the appeal within the stipulated period and, we are of the view that there was sufficient cause for the delay in filing of the appeal. Accordingly, we condone the delay and admit this appeal for hearing.

7.0 The Ld. Sr. D.R., supporting the orders of the authorities below, submitted that the appeal of the assessee may be dismissed.

8.0 We have heard the ld. Senior Departmental Representative and have also perused the material on record. It is evident that the order passed by the AO was ex-parte qua the assessee and the NFAC, without adjudicating the issues involved in the appeal, simply sustained the additions made by the AO and dismissed the appeal of the assessee by passing an order ex- parte qua the assessee. Looking into the facts of this case, we are of the considered view that the assessee deserves one more opportunity to present his case and, therefore, we set aside the order of the NFAC and restore this file to the Office of the Assessing Officer with the direction to provide one more opportunity to the assessee to present his case. We also caution

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the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer 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.

9.0 In the result, the appeal of the assessee stands allowed for statistical purposes.

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

Sd/- Sd/- [NIKHIL CHOUDHARY] [SUDHANSHU SRIVASTAVA] ACCOUNTANT MEMBER 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