VEERABHADRAPPA SHANTHAKUMAR,CHIKKAMAGALUR vs. INCOME TAX OFFICER, WARD 1, CHIKKAMAGALUR

The present appeal by the assessee is delayed by 461 days. Along with the appeal, the assessee has filed an affidavit seeking condonation of delay, submitting that he is a farmer belonging to a rural background with limited education and very little understanding of the income tax law. It is further submitted that due to a lack of proper professional guidance and limited familiarity with legal procedures, the assessee was unaware of the further course of action after the disposal of the appeal proceedings before the learned CIT(A). Accordingly, the assessee submitted that the delay in filing the present appeal is purely unintentional and bona fide, which has been caused for reasons beyond the control of the assessee.

We find that the reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag vs. MST Katiji and others, reported in 1987 SCR (2) 387. It is well-established that the Rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the assessee does not stand to benefit from the late filing of the present appeal. In view of the above and having perused the application and affidavit filed by the assessee, we are of the considered view that there exists sufficient cause for not filing the present appeal within the limitation period, and therefore, we condone the delay in filing the appeal by the assessee, and we proceed to decide the appeal.

In this appeal, the assessee has raised the following grounds: -

We have considered the submissions of both sides and perused the material available on record. The brief facts of the case are that the assessee is an individual and for the year under consideration did not file his return of income. On the basis of the information received regarding the deposit of substantial amount of cash during the demonetisation period, notice under section 142(1) of the Act was issued to the assessee calling for the return of income for the year under consideration. However, the assessee did not file his return in response to the said notice. Thereafter, statutory notices were issued calling for details regarding the source of Cash deposited during the demonetisation period. However, the assessee did not respond to the said notices. Therefore, a show-cause notice was also issued to the assessee. Again, the assessee remained unresponsive and did not file any details regarding the nature and source of cash deposits. Accordingly, in the absence of any details being furnished by the assessee, the Assessing Officer (“AO”), vide order dated 21/10/2019 passed under section 144 of the Act, treated the entire cash deposits of iron and 10 lakh as unexplained investment under section 69 of the Act and added the same to the total income of the assessee.

From the perusal of the record, it is evident that during the appellate proceedings, multiple opportunities were granted to the assessee to furnish his response to the addition made by the AO. However, the assessee failed to provide any details. Accordingly, vide impugned order, the learned CIT(A) upheld the addition made by the AO on account of cash deposits during the demonetisation period.

During the hearing, the learned Authorised Representative (“learned AR”) submitted that the assessee is an agriculturist and is not well-versed with the e-proceedings. Therefore, he could not respond to the notices issued during the assessment as well as the appellate proceedings. The learned AR undertook that, given an opportunity, the assessee will furnish all the details substantiating the source and nature of cash deposits.

Having considered submissions and perused the material available on record, we deem it appropriate to grant another opportunity to the assessee to furnish all the details regarding the source and nature of cash deposits. Accordingly, in the interest of justice and fair play, the impugned order is set aside, and the matter is restored to the file of the jurisdictional AO for de novo adjudication, with a direction to the assessee to furnish all the details/submissions to substantiate the source and nature of cash deposits during the demonetisation period. We further direct the assessee to fully cooperate in the assessment proceedings and furnish any other information/document as sought by the AO. Needless to mention, no order shall be passed without affording reasonable and adequate opportunity of hearing to the assessee. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

In the result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open court on 21-Aug-2026.