RAMESH CHAND YADAV,MANGALA BABU KI DHANI vs. INCOME TAX OFFICER, BEHROR

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ITA 671/JPR/2026Status: DisposedITAT Indore22 October 2026AY 2012-135 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 111 days in filing the appeal, accepting the assessee's submission of suffering from neurological issues since June/July 2025, supported by an affidavit and prescription slip. This was considered a "sufficient cause" in line with the Supreme Court's ruling in Collector, Land Acquisition v Mst Katiji and Others. The Tribunal found that the CIT(A) had dismissed the appeal for want of prosecution after giving only three opportunities with short intervals. It was not on record if these notices were actually served. To ensure substantial justice and avoid multiplicity of proceedings, the Tribunal held that the assessee was not provided with an adequate opportunity of being heard. Therefore, the impugned order of the CIT(A) was set aside, and the case was remanded back to the CIT(A) to pass a fresh order after providing the assessee with an adequate opportunity of being heard. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Ramesh Chand Yadav, filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for assessment year 2012-13. The Assessing Officer (AO) initiated reassessment proceedings under Section 147/148 of the Income Tax Act, 1961, based on information that the assessee deposited Rs. 26,93,106/- in cash while his declared total income was Rs. 2,14,500/-. Despite multiple notices, the assessee did not respond, leading the AO to make a best judgment assessment under Section 144, adding the entire deposit amount. The assessee's appeal before the CIT(A) was dismissed for want of prosecution. The assessee then filed an appeal before the ITAT, seeking to set aside the CIT(A)'s order.

What were the issues?

1. Whether the AO erred in initiating reassessment proceedings under Section 147/148 without referring to the past history and the return filed for the year? (Question of fact and law) 2. Whether the AO erred in passing an ex-parte assessment order under Section 144 without appreciating that the assessee did not receive statutory notices, preventing compliance due to reasonable cause? (Question of fact and law) 3. Whether the CIT(A) erred in passing an ex-parte order because the assessee had reasonable cause for non-compliance due to medical exigencies? (Question of fact and law) 4. Whether the AO erred in treating the assessee's regular source of income as Salary Income instead of Business Income, and in not appreciating that cash deposits were from regular business receipts? (Question of fact and law) 5. Whether the AO erred in treating cash deposits of Rs. 26,93,106/- as income from undisclosed sources without appreciating the facts? (Question of fact and law) 6. Whether the AO erred in initiating penalty proceedings under Section 271(1)(b) & 271(1)(c) in a methodical manner? (Question of fact and law) Assessee's Contentions: The assessee argued that reassessment proceedings were initiated without considering past history and the filed return. The assessment order was passed ex-parte without proper notice, and the assessee was prevented from complying due to medical exigencies. The AO wrongly classified income as salary instead of business income and failed to appreciate that cash deposits were business receipts. Penalty proceedings were also initiated improperly. The assessee relied on the principle of reasonable cause for non-compliance and cited the Supreme Court case of Collector, Land Acquisition v Mst Katiji and Others (167 ITR 471 (SC)) for condoning delay due to medical issues. Revenue's Contentions: The Revenue opposed the condonation of delay, arguing that the assessee was given numerous opportunities by the AO and CIT(A) and was not entitled to relief.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 271(1)(b),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR “SMC” BENCH, JAIPUR

Before: SHRI KULDIP SINGH & SHRI PRAKASH, ACCOUNTANCT MEMBER

IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR “SMC” BENCH, JAIPUR (PHYSICAL HEARING) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER & SHRI PRAKASH, ACCOUNTANCT MEMBER ITA No: 671/JPR/2026 Assessment Year: 2012-13

Ramesh Chand Yadav The ITO, 284, Mangala Babu Ki Behror. Vs (Respondent) Dhani, Gordanpura, Tehsil Kotputli, Distt. Kothputli- Behrod. PAN: ADSPY4344A (Appellant)

Assessee Represented: Sh. Shafi Mohammad Chouhan, Adv. Sh. Sahil Shafi Chouhand, Adv. Revenue Represented: Mrs. Aarti Rawat, JCIT Date of hearing : 07-10-2026 Date of pronouncement : 22-10-2026 ORDER PER : KULDIP SINGH, JUDICIAL MEMBER:-

The Appellant, Ramesh Chand Yadav (hereinafter referred to as the ‘assessee’) by filing the present appeal, sought to set aside the impugned order dated 30.09.2025 passed by the National faceless Appeal centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] qua assessment year 2012-13 on the grounds inter-alia that:- “1. On the facts and in the circumstances of the case, the Id. AO had factually and legally erred in initiating the reassessment proceedings u/s 147/148 of

I.T.A No. 671/JPR/2026 Page No 2 Ramesh Chand Yadav

the Act without referring to the past history of the case and the Return filed for the year.

2.

On the facts and in the circumstances of the case, the Id. AO had factually and legally erred in passing the assessment order exparte u/s 144 of the Act without appreciating the fact that the appellant did not receive any notice u/ s.148 of the Act and other statutory notices as alleged in the assessment order. Thus, the appellant was prevented by reasonable and bona-fide reasons from making compliance of various statutory notices as alleged in the assessment order.

3.

That the Ld. CIT(A) is erred in passing the order as exparte, because the assessee is prevented by reasonable cause behind non-compliance due to some medical exigencies.

4.

On the facts and in the circumstances of the case, the Id. AO had factually and legally erred in taking the regular source of income of the appellant as Salary Income instead of the head of income declared in the return as Business Income. Thus, the learned AO had erred in appreciating the fact that the cash deposits in the Bank account was made out of regular business receipts.

5.

On the facts and in the circumstances of the case, the Id. AO had factually and legally erred in treating the cash deposits of Rs.26,93,106/- made in the Bank A/c as income from undisclosed sources without appreciating the facts of the case in right perspective.

6.

On the facts and in the circumstances of the case, the Id. AO had factually and legally erred in initiating the penalty proceedings u/s 271(1) (b) & 271(1)(c) of the Act in methodical manner, which deserves to be quashed summarily

7.

The appellant reserves the right to add, alter, and amend the grounds of appeal on or before the appeal proceedings.”

2.

Briefly stated, facts necessary for consideration and adjudication of the issues at hand are : On the basis of information received by the Revenue department that the assessee has deposited Rs. 26,93,106/- in cash with the bank, who has filed the

I.T.A No. 671/JPR/2026 Page No 3 Ramesh Chand Yadav

return of income at the total income of Rs. 2,14,500/-, reopening was initiated by way of issuance of notice, to which no response has been filed by the assessee despite numerous notices issued to him. Consequently, the Assessing Officer proceeded to make “best judgment assessment” and made an addition of Rs. 26,93,106/- to the income of the assessee and thereby framed assessment u/s 147/144 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”). 3. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal, who has dismissed the same for want of prosecution. Being aggrieved with the impugned order passed by the Ld. CIT(A), assessee has come up before the Tribunal by way of filing the present appeal. 4. At the very outset, Ld.AR for the assessee by moving an application supported with an affidavit sought to condone the delay of 111 days in filing the present appeal on the ground that he is suffering from neurological issues since June/July, 2025 and as such was not in proper mental condition to make the statutory compliances. However on the other hand Ld. DR for the Revenue opposed the application on the ground that numerous opportunities

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have been given to the assessee by the AO as well as Ld. CIT(A) and as such not entitled for any relief. 5. Keeping in view the fact that the assessee is suffering with neurological disorder since June/July, 2025, which is prima facie proved from an affidavit and prescription slip issued by Shri Krishna Advance Physiotherapy and Rehabilitation Centre, we find it a “sufficient cause” to condone the delay of 111 days in view of law laid down by Hon’ble Supreme Court of India in case of Collector, Land Acquisition v Mst Katiji and Others (167 ITR 471 (SC), hence the delay is hereby condoned and the appeal is being heard on merits. 6. We have heard Ld. ARs for the assessee and Ld. DR for the Revenue and perused the record available on file. 7. Bare perusal of the impugned order passed by the ld. CIT(A) goes to prove that in para 5, three opportunities with a gap of 7 to 9 days are shown to have been given and on failure of the assessee to respond the appeal has been dismissed for want of prosecution. It appears that the assessee has not been provided with adequate opportunity of being hard as it is not brought on record if the notices served with short interval were served upon the assessee or

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not. To achieve the substantial justice and to stop the multiplicity of proceedings, the assessee is required to be given adequate opportunity of being heard. So the impugned order passed by the Ld. CIT(A) is hereby set aside and to pass afresh order by providing adequate opportunity of being head to the assessee. 8. Resultantly, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 22-10-2026 .

Sd/- Sd/- (PRAKASH) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Jaipur Dated:- 22/10/2026. *Santosh. Copy of the order forwarded to: 1. The Appellant- 2. The Respondent- 3. CIT 4. CIT(A) 5. DR, ITAT, Jaipur. 6. Guard File By order,

Asst. Registrar

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