HARINDAR PRASAD,BALLIA vs. NATIONAL FACELESS ASSESSMENT CENTRE, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL VARANASI BENCH, VARANASI BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.169/VNS/2025 A.Y. 2017-18 Harinder Prasad, vs. NFAC, Delhi Kharicha Garwar Near Primary School, Ballia 277121, U.P. PAN: BTYPP1376E (Appellant) (Respondent) Assessee by: Sh. Arvind Shukla, Adv Revenue by: Sh. Sudipta Paul, Sr. DR Date of hearing: 07.08.2026 Date of pronouncement: 31.08.2026 O R D E R PER NIKHIL CHOUDHARY, AM: This appeal has been filed by the assessee against the orders of the ld. CIT(A), NFAC dated 26.03.2025, wherein the ld. CIT(A) has dismissed the appeal of the assessee against the order of the ld. Assessing Officer passed under section 147 r.w.s. 143(3) r.w.s. 144B for the A.Y. 2017-18 dated 26.03.2022. The grounds of appeal are as under: - “1. Because the Learned CIT(A) has erred in law as well as on facts in dismissing the appeal simply on the point of Imitation without addressing the reasons for condonation of delay properly. 2. Because the Learned CIT(A) has failed to appreciate that the high-pitched assessment order has been passed simply on conjectures and surmises without appreciating the submissions on record and also without giving proper opportunity of being heard. 3. Because the learned AO as well as the Learned CIT(A) have failed to appreciate that the computer illiterate rural trader with small turnover never got information about notices sent on portal and was prevented reasonable responding.

ITA No. 169/VNS/2025 Harinder Prasad A.Y. 2017-18 4. Because the learned AO has failed to appreciate that in view of bank statement on record it was amply clear that the entries with regular debits and represented credits business turnover and all entries went through the books of accounts but still addition of entire credits has been made u/s 69A which is bad in law. 5. Because the learned AO has failed to appreciate that entire bank debits and credits are part of books of accounts and addition if at all could be made u/s 68 and not u/s 69A as done in the order. 6. Because the relief claimed u/s 80C has not been allowed.” 2. At the outset, it is observed that the appeal is delayed by 210 days. It was submitted that the assessee is semi-illiterate and a non-computer savvy individual residing in the rural area. He was unable to access the e-filing portal and therefore, prevented by a reasonable cause from responding to notices that were sent on the portal. Furthermore, the assessee was suffering from severe medical condition, specifically back pain and attendant lower body ailments that required him to take rest from 25.05.2025 to 20.08.2025. A medical certificate in support of this was attached. It was submitted that a person should not be deprived of his right to appeal only because of a technicality, especially when there was a plausible explanation for the delay. The decision of the Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs. MST. Katiji & Ors (1987)167 ITR 471 (SC) was cited and it was prayed that the delay in the filing of the appeal may kindly be condoned. During the course of hearing, Sh. Arvind Shukla, Advocate (hereinafter referred to as the ld. AR) submitted that since the assessee was poorly educated, residing in a remote area and also suffering from multiple ailments, a sympathetic view may kindly be taken on the admission of the appeal since the ld. Assessing Officer had arbitrarily added back the entire amount deposited in the bank, despite the fact that the assessee had filed a return of income under section 44AD. After considering the condonation

ITA No. 169/VNS/2025 Harinder Prasad A.Y. 2017-18 petition, the medical certificate and the submissions of the ld. AR, in the interest of justice, we admit the said appeal for consideration. 3. The facts of the case are that the ld. Assessing Officer noticed that even though the assessee has filed his return of income for the A.Y. 2017-18, he had deposited cash amounting to Rs. 47,58,400/- in his bank accounts at the Union Bank of India and Purvanchal Bank. Accordingly, he issued a notice under section 148 to the assessee, in response to which a return was filed in which total income was declared at Rs. 4,09,140/-. Notices were issued seeking the explanation of the assessee. In response, the assessee submitted that he was a small trader in a rural area having nominal income and therefore, he had not filed his returns earlier. However, after receipt of notice under section 148, he had filed a return declaring income from trading at Rs. 4,62,218/- on a turnover of Rs. 57,83,949/-, as per the provisions of section 44AD of the Income Tax Act. Act. However, the ld. Assessing Officer noticed that the assessee had not furnished any proof which could established that he was actually engaged in any business activities. He had failed to furnish any documentary evidence with regard to VAT/GST returns filed for the said year. He also failed to furnish any details with supporting documentary evidences with respect to the sources of cash deposited by him in his bank accounts. Accordingly, the ld. Assessing Officer held that the assessee had failed to substantiate with any corroborative evidence, the sources of cash that had been deposited by him in his bank accounts. He had also failed to establish the genuineness of Chapter VI-A deductions claimed by him for the year under consideration. In view of the same, he held that cash deposits in his various bank accounts amounting to Rs. 47,58,400/- were unexplained money under section 69A of the Income Tax Act and he added the same back to the income of the assessee.

ITA No. 169/VNS/2025 Harinder Prasad A.Y. 2017-18 4. Aggrieved with the said assessment order, the assessee filed an appeal before the ld. CIT(A), NFAC. However, the ld. CIT(A) noticed that there was a delay of 210 days in the filing of the appeal. The ld. CIT(A) observed that in his Form 35, the assessee had submitted that the assessment order dated 26.03.2022 had only been served upon him on 17.11.2022, but he held that this could not be correct because the assessment order that had been passed by the ld. Assessing Officer had been served online to his email ID on the same day. In the circumstances, the ld. CIT (Appeals) made out a case for dismissal of the appeal of the assessee in limine. However, he also pointed out that during the course of appeal, he had given various opportunities to the assessee to make submissions but the assessee had not made response to any of these notices. Accordingly, he held that in view of various decisions which held that an appeal that was not prosecuted was liable to be dismissed, he dismissed the appeal in limine on this account also. He also opined that even on merits, the addition under section 69A was justified because the assessee had failed to furnish any explanations for the same before the ld. Assessing Officer. 5. The assessee is aggrieved at this dismissal of his appeal and has accordingly come before us. Sh. Arvind Shukla, Advocate submitted that the ld. CIT(A) had erred in law and in facts by dismissing the appeal only on the point of limitation without properly addressing the reasons for condonation of delay. The fact that the assessee was a small trader in a rural area who was not computer literate and not having access to Departmental portal had been clearly stated in the Form No. 35. Accordingly, he was not in the knowledge of the order that had been passed by the ld. Assessing Officer. When he came to know about the same, he had urgently filed the appeal and this should have been appreciated. It was submitted that although the actual income of

ITA No. 169/VNS/2025 Harinder Prasad A.Y. 2017-18 the assessee was even lower than the income that had been returned, but due to the compulsions of section 44AD, he declared an income of Rs. 4,62,218/- on a turnover of Rs. 57,83,949/- and paid tax accordingly. It was submitted that the deposits in the bank account were entirely from his business turnover and the addition made under section 69A was bad in law. The ld. AR further submitted a copy of the print out from the Commercial Taxes Department of Uttar Pradesh showing that the assessee was running a firm by the name of M/s Garwar Hardware which bore TIN Registration No.09185607464 and that the assessee was trading in Cement, White Cement, Tiles, Paints, Varnishes, Hardware, Mill Stores, Water Proofing compound etc,. A copy of the bank account was also furnished which showed that the debits in the bank account have been made to various companies for purchase of paints. Accordingly, it was submitted that since the assessee was poorly educated and not well-versed in computers and since he was completely dependent upon his erstwhile counsel, whose details had been entered in the email ID of the assessee while filing of the return of income, he was unable to respond to or keep track of the notices orders issued by the Department. It was for this reason that the addition had been made. He prayed that the matter may kindly be restored back to the file of the ld. Assessing Officer so that the justice could be done and the assessee may be assessed at his true income. 6. On the other hand, Sh. Sudipta Paul, Sr. DR submitted that the assessee had neither made compliance before the ld. Assessing Officer nor the ld. CIT(A) and had also been negligent in the filing of the appeals. Accordingly, the appeal should be dismissed at the outset. 7. We have duly considered the facts and circumstances of the case and the arguments advanced by both the parties. We note the submission of the

ITA No. 169/VNS/2025 Harinder Prasad A.Y. 2017-18 assessee that he is not computer savvy and semi-literate and residing in a remote area as the reasons for his failure to make compliance before the lower authorities. Considering the documents filed by the ld. AR which show that the assessee was running a hardware business and making purchases from companies that were selling paints, we think it appropriate that before the deposit in the said bank account are considered to be unexplained money under section 69A, the assessee should get an opportunity to demonstrate that the deposits are on account of his business turnover. Accordingly, we restore the matter to the file of the ld. Assessing Officer on the assurance of the ld. AR that he will ensure compliance before the ld. Assessing Officer, so that the assessee may furnish the necessary evidences before the ld. Assessing Officer to demonstrate that the credits in his bank account which have been held to be unexplained, are in fact not so. Accordingly, the matter stands restored to the file of the ld. Assessing Officer for fresh consideration in accordance with law. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Orders pronounced on 31.08.2026 in the open Court. Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHILCHOUDHARY] JUDICIAL MEMBER 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. 6