SANJAY SHIVHARE,GWALIOR vs. ACIT 1(1) GWALIOR, GWALIOR

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ITA 654/AGR/2026Status: DisposedITAT Dehradun27 October 2026AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal decided to condone the delay of approximately 663 days in filing the appeal, finding the reasons provided by the assessee regarding his wife's health and issues with his counsel to be sufficient. The Tribunal acknowledged the non-cooperative conduct of the assessee in the appellate proceedings but, in the interest of justice, decided to restore the matter to the file of the Assessing Officer (AO) for a fresh assessment. The addition of Rs. 1,59,54,170/- made by the AO under Section 68 read with Section 115BBE of the Act was set aside. The reasoning was based on the assessee's submission that the cash deposits were from cash sales in his liquor business and the need to provide him an opportunity to explain these facts before the AO. The ratio decidendi is that in cases of significant delay attributable to circumstances beyond the assessee's control and where a prima facie case for re-examination of facts exists, the appellate authorities should lean towards providing an opportunity for a fresh assessment, even if there was prior non-compliance, to ensure justice. The order of the CIT(A) was set aside, and the appeal was allowed for statistical purposes, remanding the matter to the AO.

What were the facts?

The assessee, Sanjay Shivhare, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Agra, against an order dated 22.08.2024 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The appeal was filed with a delay of approximately 663 days. The assessee attributed the delay to his wife's severe health condition and the non-compliance of his then IT counsel during assessment and appellate proceedings, leading to an ex-parte assessment order and an ex-parte dismissal of his appeal by the CIT(A). The ITAT condoned the delay. The Assessing Officer (AO) had made an addition of Rs. 1,59,54,170/- under Section 68 read with Section 115BBE of the Income Tax Act, 1961, for cash deposits during the demonetization period, citing the assessee's failure to furnish supporting documentary evidence.

What were the issues?

1. Whether the delay of approximately 663 days in filing the appeal before the ITAT should be condoned, considering the reasons provided by the assessee regarding his wife's health and issues with his counsel? (Question of fact) Assessee's contention: The assessee argued that the delay was due to his wife's severe health condition and the non-compliance of his IT counsel, which led to ex-parte orders at both the assessment and appellate stages. He sought condonation of the delay based on these circumstances. Revenue's contention: The judgment records no specific contention from the revenue regarding the condonation of delay. However, the Tribunal noted the non-cooperative conduct of the assessee in the appellate proceedings. 2. Whether the addition of Rs. 1,59,54,170/- made by the AO under Section 68 read with Section 115BBE of the Act, on account of cash deposits during demonetization, warrants a fresh assessment, considering the assessee's explanation of being in the liquor business with substantial cash sales? Assessee's contention: The assessee's Authorized Representative (AR) submitted that the cash deposits were from cash sales in the liquor business, which amounted to Rs. 5,55,53,150/- during the year. The AR requested an opportunity to explain these facts before the AO. Revenue's contention: The judgment records no specific contention from the revenue on this issue, other than the fact that the AO made the addition due to the assessee's failure to furnish supporting documentary evidence.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 250,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AGRA(DB

Before: SUNIL KUMAR SINGHBRAJESH KUMAR SINGH

For Respondent: Shri Anil Kumar Sr. DR
Hearing: 30.09.2026Pronounced: 30.09.2026

PER:BRAJESH KUMAR SINGH, A.M.

This appeal is directed against the impugned order dated 22.08.2024 passed in appeal No. CIT (A), Gwalior/10529/2019-20 by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the “CIT(A)] u/s. 250 of the Income

ITA No. 654/Agr/2026

Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y. 2017-18, wherein ld. CIT(A) has dismissed assessee’s appeal ex-parte.

2.

At the very outset, it is noticed that this second appeal has been filed on 25.08.2026 by a delay of about 663 days. The assessee has prayed to condone the said delay by filing an affidavit dated 12.08.2026, stating that due to severe health condition of his wife during the relevant period, wherein, the assessee was totally dependent on the then IT counsel who did not comply during the assessment proceeding and ex-parte assessment order was passed in the case of the assessee. Further, it was submitted that again due to the non-appearance of his counsel during the appellate proceedings, the appeal of the assessee was dismissed ex-parte by the Ld. CIT (A). In view of these facts the assessee submitted that the delay in filing the appeal may be condoned. We have considered the reasons for the delay and treat the cause shown as sufficient and condone the said delay caused in filing this appeal. The appeal is admitted for hearing.

3.

Heard both the parties. It transpires form the perusal of records that several notices of hearing on various dates were issued by the first appellate authority to the assessee. However, the assessee did not respond in compliance thereof. The ld. CIT(A) was thus compelled to pass impugned order. The non-cooperative conduct of the assessee cannot be appreciated. 2 | P a g e

ITA No. 654/Agr/2026

3.1 Further, in this case, we note that the addition of Rs. 1,59,54,170/- was made u/s 68 r.w.s. 115 BBE of the Act by the AO in the order u/s 143(3) of the Act dated 29.12.2019 in respect of cash deposits during the demonetisation period on the ground that the assessee furnished his reply but failed to furnish supporting documentary evidences regarding his claim of cash deposit during the demonetisation period. In this regard, the Ld. AR submitted that the assessee was in liquor business where sales are made in cash and the total sales during the year was Rs. 5,55,53,150/- out of which cash deposit of Rs. 1,59,54,170/- was deposited in the bank account of the assessee. The Ld. AR submitted that an opportunity may be given to the assessee to explain the facts before the AO.

3.2 Therefore, considering the above facts and the submission of the assessee, in the interest of justice, we deem it just and appropriate to restore the matter back to the file of ld. AO for fresh assessment in accordance with law. The order of the Ld. CIT (A) is set aside.

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ITA No. 654/Agr/2026

4.

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

Order pronounced in the open court on 30/09/2026.

Sd/- Sd/- (SUNIL KUMAR SINGH) (BRAJESH KUMAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27/10/2026 *aks/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra

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