DHARMENDRA KUMAR PANDEY,GHAZIPUR vs. INCOME TAX OFFICER, WARD - 3(5), GHAZIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL VARANASI BENCH, VARANASI BEFORE HON’BLE JUSTICE (RETD.) C.V. BHADANG, PRESIDENT AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.218/VNS/2024 A.Y.-2018-19 Dharmendra Kumar Pandey, 00, vs. Income Tax Officer, Tilak Nagar Colony, Ghazipur, 3(5), Ghazipur 233001 PAN: AUFPP9026Q (Appellant) (Respondent) Assessee by: Sh. Dharmendra Tiwari, C.A. Revenue by: Sh. Deepak Yadav, Sr. DR Date of hearing: 03.08.2026 Date of pronouncement: 31.08.2026 O R D E R PER NIKHIL CHOUDHARY, A.M.: This is an appeal filed by the assessee against the order of the ld. CIT(A), NFAC dated 30.07.2024, wherein the ld. CIT(A) has dismissed the appeals of the assessee against the orders passed by the ld. Assessing Officer for the Assessment Year 2018-19, under section 147 r.w.s. 144 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), vide his order dated 30.07.2024. The grounds of appeal are as under:- “1.That the order passed by the learned Commissioner of Income tax (Appeals) is erroneous on the fact and in the law. 2. That on facts and in circumstances of the appellant's case, the learned Commissioner of Income tax (Appeals) erred both in facts and in law in upholding the addition of Rs. 10082100/- as unexplained income of the appellant, made by the assessing officer only on the basis of conjectures and surmises. Hence, the appellate order is liable to be set aside for fresh consideration. 3. That the learned Commissioner of Income tax (Appeals) erred in ignoring the income of the appellant from his business income.

ITA No.218/VNS/2024 Dharmendra Kumar Pandey A.Y. 2018-19 4. That the appellant craves leave to add, amend or alter any of the grounds of appeal.” 2. At the very outset, it is noticed that the appeal is delayed by 73 days. The assessee has filed a condonation petition in which it has been submitted that he operates a small business in the name and style of M/s Anju Medical Agency and was unaware of assessment and appellate proceedings, due to the fact that he was not well versed in electronic communications and was reliant upon physical notices. The first physical notice was received by the assessee on 10.07.2023, in response to which he filed an appeal before the ld. CIT(A) within 30 days of receiving the notice. However, he was not aware regarding further procedural requirements during faceless appellate proceedings and communication gaps contributed to delay in escalating the matter to the Tribunal. Despite the order being passed on 30.07.2024, the assessee did not come to know until 15.10.2024, as no physical copy was served upon him. Since, he was not well versed in legal and technical matters, he had to seek advice from a professional after receiving the appeal, which further delayed the appeal. It was prayed that the assessee had a strong case on merits as the addition was arbitrary and unsupported by facts and he was desirous of pursuing the appeal. Reference was invited to the decision of the Hon’ble Supreme Court in the case of Collector Land Acquisition vs. MST Katiji & Others 167 ITR 471, to pray that a pragmatic approach should be adopted in condoning delays and sufficient cause should be liberally interpreted to advance the cause of justice. Accordingly, it was prayed that the delay may kindly be condoned and the appeal be admitted for adjudication on merits. 3. We have duly considered the condonation application. We observed that the assessment order has been passed as a best judgment assessment in view of the fact that compliance was not made before the Assessing 2

ITA No.218/VNS/2024 Dharmendra Kumar Pandey A.Y. 2018-19 Officer and the entire cash deposits of Rs. 1,00,82,100/- have been added back on this account. We further note that before the ld. CIT(A), the assessee had submitted in the Form No. 35 that the non-compliance was on account of lack of knowledge of the proceedings but the amount deposited in Canara Bank was on account of sales made on account of a Medical Agency duly registered with GST and VAT. But subsequently he had not made compliance to the notices before the ld. CIT(A). In our view, the failure to make compliance after seeking permission to introduce documents under Rule 46A is indicative of the lack of knowledge of the assessee to the requirements of faceless appeals and would bear out the reasons for delay given in the condonation petition. Accordingly, we condone the delay of 73 days in the filing of the appeal, after considering the petition of the assessee and the judgment of the Hon’ble Supreme Court in the case of MST Collector Land Acquisition vs. MST Katiji & Others (supra), wherein the Hon’ble Supreme Court has held that the cause of substantive justice must always prevail over technical considerations. 4. The facts of the case are that the Assessing Officer received information that the assessee had made a cash deposit of Rs. 1,00,82,100/- in Canara Bank during F.Y. 2017-18, but had not filed his return of income for the year under consideration. Hence proceedings under section 147 of the Act were initiated. As the assessee did not make compliance during the proceedings under section 147, the assessment was completed in a best judgment manner and the amount of Rs. 1,00,82,100/- was added back to the income of the assessee under section 69A and brought to the tax as per the provisions of section 115 BBE. 5. Aggrieved with the said addition, the assessee went before the ld. CIT(A). In the Form No. 35 that was filed, the assessee submitted that he was carrying on the business of Medical Agency in the name and style of 3

ITA No.218/VNS/2024 Dharmendra Kumar Pandey A.Y. 2018-19 M/s Anju Medical Agency having GST No.09AUFPPP0926Q1ZR. He was unaware of income tax proceedings until he received a physical notice from the Income Tax Department on 10.07.2023. He was not aware of any notices and letters that were sent to emails or e-filing portals, as he was not in touch with emails and electronic communications. It was submitted that had he known he would have made compliance. However, it was explained that the amount deposited in the Canara Bank account was his sales from Medical Agency business of which GST sales for nine months was Rs. 85,25,173/- and VAT sales for three months was Rs.22,46,622/-. Thus, the total sales were Rs. 1,07,71,795/-. The ld. CIT(A) sent three notices to the assessee, but the assessee did not comply to the notices sent by him. Thereafter, the ld. CIT(A) also decided to dispose the appeal in a best judgment manner. He held that the failure to be in touch with electronic communications was not acceptable since the assessee was not able to show that the notices were not a received on registered email ID. He held that as per the provisions of section 69A, the burden of proof lies on the assessee to demonstrate that the money in his possession was explained but since no satisfactory explanation had been provided by the assessee before the Assessing Officer and no documentary evidence had been placed in support of the statement of facts or grounds of appeal, there was no basis for disagreeing with the findings of the Assessing Officer and accordingly the ld. CIT(A) dismissed the appeal of the assessee and upheld the additions made by the ld. Assessing Officer. 6. The assessee is aggrieved at this summary dismissal of his appeal and has accordingly come before us. Sh. Dharmendra Tiwari, C.A. (hereinafter referred to as the ld. AR) appearing on behalf of the assessee submitted that proper compliance could not be made before the lower authorities only because of the lack of familiarity of the assessee with the 4

ITA No.218/VNS/2024 Dharmendra Kumar Pandey A.Y. 2018-19 faceless and e-assessment and appeals process. It was submitted that the addition made was bad in law because it was completely contrary to the facts of the case since the money credited to the said Canara Bank account was duly explained by the sales of the assessee from his Medical Agency business. The ld. AR further pointed out that the GST returns, the VAT returns and the bank statement duly bear this out and he prayed that the assessee may be given another chance to demonstrate that the credits in the aforesaid Canara Bank account were fully explained. He accordingly prayed for the matter to be remanded back to the ld. Assessing Officer. 7. On the other hand, Sh. Deepak Yadav, Sr. DR (hereinafter referred to as the ld. DR) submitted that the assessee had not made any compliance before the Assessing Officer and not furnished any evidence before the ld. CIT(A) in support of the statement of facts. Accordingly, the addition was deserving of being confirmed. However, if the Tribunal in its wisdom decided to restore the matter back, he prayed that direction may be given to the assessee to make due compliance before the Assessing Officer failing which adverse inference could be drawn against him. 8. We have duly considered the facts of the case and the arguments advanced by both parties. It appears that the addition has been made solely because of the fact that the assessee was unable to make compliance before the Assessing Officer or upload the necessary evidences before the ld. CIT(A), as per procedure. Given the fact that the assessee contends that the credits in the bank account are fully explained out of the sales of his Medical Agency business, which in turn are borne out by his GST returns and VAT returns, we deem it appropriate in the interest of justice to restore the matter back to the file of the ld. Assessing Officer so that the assessee may present all necessary evidences before the ld. AO to demonstrate that the cash deposited in the said bank account is duly explained and not hit by 5

ITA No.218/VNS/2024 Dharmendra Kumar Pandey A.Y. 2018-19 the provisions of section 69A. The ld. Assessing Officer may thereafter consider such evidences and pass a fresh order in accordance with law. The assessee is hereby cautioned, that failure to make compliance before the ld. AO in the restored proceedings, could led to adverse inference being drawn against him in subsequent proceedings. With the aforesaid comments, the matter stands restored to the file of the ld. Assessing Officer for de novo assessment. 9. In the result, the appeal of the assessee is held to be allowed for statistical purposes. Order pronounced as per Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963 on 31.08.2026.

Sd/- Sd/- Sd/- [JUSTICE (RETD.) C.V. BHADANG] [NIKHIL CHOUDHARY] PRESIDENT ACCOUNTANT MEMBER DATED: 31/08/2026 Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CIT DR, ITAT 4. CIT, 5. The CIT(A) By order Sr. P.S.