DODDANARAYANAPPA NARAYANAMMA,KOLAR vs. INCOME TAX OFFICER, WARD-1, KOLAR

The assessee in the grounds of appeal has raised 7 grounds which, for the sake of brevity and convenience, we are not inclined to reproduce here. The grounds of appeal raised by the assessee are interconnected

The relevant facts of the case are that the assessee is a retired primary school teacher, earning her livelihood through pension income and income from house property. During the captioned AY, the assessee filed her ROI by offering an income to taxation to the tune of Rs. 4,89,380/- only. As per the information received by the department, the assessee had deposited cash amounting to Rs. 15,32,000 in his bank account. Based on this information, the Assessing Officer issued notice u/s 142(1) of the Act. However, the assessee failed to reply to any of the notice. As a result, the AO based on the information available before him completed assessment by adding Rs. 15,32,000 as unexplained cash credits u/s 68 of the Act.

Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee in the statement of facts submitted that the AO erred in determining the total income at Rs. 20,21,380/- as against the returned income of Rs. 4,89,380/- by making an addition of Rs. 15,32,000/- under section 68 of the Act. It was submitted that the provisions of section 68 are not applicable to the facts of the present case since no such unexplained cash credit was recorded in the books of account of the assessee or shown in the return of income filed for the relevant assessment year. In absence of any credit entry in the books, the very foundation for invoking section 68 of the Act fails.

The assessee further submits that the Ld. AO erred in taxing the aforesaid addition under the special provisions of section 115BBE of the Act. Since the addition made under section 68 of the Act itself is unsustainable in law, the consequential application of section 115BBE of the Act is also liable to be deleted. The addition has been made merely on assumptions without bringing any cogent materials on record to establish that the amount represented unexplained income of the assessee. Hence, the addition deserves to be deleted. On the contrary, the Ld. CIT(A) dismissed the appeal of the assessee on the ground that the assessee failed to reply to any of the notice issued by him. Accordingly, the appeal was dismissed in limine.

Aggrieved, the assessee has preferred an appeal before us.

The Ld. AR before us submitted that the assessee is a senior citizen aged about 72 years and a retired Primary School Teacher deriving pension income and income from house property. During the assessment proceedings, notices were uploaded on the E-filing portal. However, the assessee was not well acquainted with operating the E-filing portal and therefore could not notice the communications uploaded therein. Consequently, the assessment came to be completed ex parte vide order dated 10.12.2019 treating the cash deposits in the bank account as unexplained cash credits under section 68 of the Act.

The Ld. DR, on the other hand, vehemently supported the orders of the lower forum. It was submitted that the assessee had consistently failed to comply with the statutory notices issued during the course of the assessment proceedings. The Ld. DR further submitted that even before the Ld. CIT(A), the assessee failed to comply with the notices issued, and therefore the Ld. CIT(A) was justified in dismissing the appeal in limine. According to the Ld. DR, the conduct of the assessee shows a continued pattern of negligence and lack of diligence in pursuing the appellate remedies available under the Act. It was therefore submitted that the assessee has failed to demonstrate sufficient cause for such repeated delays and non-compliance. In view of these circumstances, the Ld. DR submitted that the appeal of the assessee does not deserve to be admitted and the order of the Ld. CIT(A) may be upheld.

We have carefully considered the rival submissions of both the parties and perused the material available on record. It is an undisputed fact that the assessee is a senior citizen aged about 72 years and a retired Primary School Teacher. The explanation offered by the assessee for the

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