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Facts
The assessee's appeal was directed against an order confirming additions made under section 69A for cash deposits during demonetisation. The assessee claimed these were cash sales already declared under section 28, leading to a double addition. The assessee also contended that the CIT(A) passed an ex-parte order without proper opportunity and that there was a significant delay in filing the appeal before the ITAT.
Held
The Tribunal condoned the delay of 341 days in filing the appeal, finding sufficient cause due to the assessee's lack of awareness and reliance on their Chartered Accountant. On merits, the Tribunal restored the matter to the Assessing Officer for fresh assessment, directing that a reasonable opportunity of hearing be provided.
Key Issues
Whether the appeal filed beyond the prescribed period is liable for condonation of delay, and whether the addition made under section 69A is a double addition when the income was already declared under section 28.
Sections Cited
69A, 28, 145, 234A, 234B, 234C, 234D, 144, 250
AI-generated summary — verify with the full judgment below
PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by assessee is directed against the order of National Faceless Appeal Centre (NFAC) / Ld. CIT(A), Mumbai dated 21.02.2024 for assessment year (AY) 2017-18. The assessee has raised following grounds of appeal:
“1Addition u/s. 69A-Cash deposits out of Cash Sales - during demonetisation period Rs.40,50,430/-
I) The Id. CIT(A) erred in confirming the addition of revenue receipts u/s. 69A without appreciating that receipts of sales had been declared accepted u/s 28, resultantly the addition of same amount twice u/s. 69A amounts to double addition; therefore, as the addition u/s 69A has no application and same may be deleted.
II) Without prejudice to above, revenue receipts as recorded and declared u/s.28 cannot be treated as deemed addition.
2. Failure of Equity and Justice: An order passed on the failure of equity and due justice is a nullity and may be vacated.
3. Double Addition - Interplay of Sections:
The Id. CIT(A) failed to appreciate that under Tax Law, double addition over the same items of receipts is not permitted with the interplay of sections; (Secs. 28 and Sec.69A); therefore, deemed addition u/s. 69A is not justified when the impugned transactions have already been reflected in the Books of A/c. which was accepted u/s.145 without any rejection when the books are audited and Tax Audited. 4. Levy of Penal Interests u/s. 234A 2348, 234C & 234D.
On merits, the Appellant denies his liability to penal interests.
5. The Appellant craves leave to add, amend or alter all or any of the above Grounds of Appeal.”
Rival submissions of both the parties have been heard and record perused.
The learned Authorised Representative (ld. AR) of the assessee submits that assessing officer as well as ld. CIT(A) passed ex-parte orders. The assessee was not allowed fair and reasonable opportunity. The assessee, while filing appeal before ld. CIT(A), provided email of his Chartered Accountant / Consultant for the purpose of service of notice that is wadyekarcoaudit@gmail.com who has not informed the assessee about fixing of date of hearing nor he has attended such proceeding. Resultantly, the ld. CIT(A) passed ex-parte order in confirming the addition made by assessing officer. No notice in physical form was issued to the assessee, nor copy of impugned order was served on the assessee. The assessee came to know about passing of order by ld. CIT(A) only in March, 2025 when his bank account was attached and he was informed by his bankers and recovery officer. The assessee immediately with the help of present authorised representative obtained the copy of impugned order dated 21.02.2024 passed by ld. CIT(A) and filed appeal before this Tribunal. The ld. AR of the assessee submits that there was no intentional or deliberate delay in filing appeal before Tribunal. In fact, the assessee was not at all aware about passing of impugned order by ld. CIT(A) and on coming to know about the dismissal of his appeal, immediately filed this appeal. The assessee is really interested in pursuing his case on merit. The assessee is not getting any benefit in filing the appeal belatedly. The ld. AR of the assessee submits that she undertakes on behalf of assessee to be more vigilant in future and making timely compliance. The assessee may be allowed one more opportunity to contest the case on merit. The ld. AR of the assessee submits that matter may be restored back to the file of assessing office with the liberty to file all relevant evidence and submissions.
On the other hand, the learned Senior Departmental Representative (ld. Sr.
DR) for the revenue opposed to the plea of ld. AR of the assessee for seeking condonation of delay. The ld. Sr. DR for the revenue submits that assessee has not explained cause of delay in proper manner. The cause of delay explained by assessee is based on self-serving story. The ld. Sr. DR submits that Hon’ble Apex Court in Ajay Dabra vs Pyare Ram & Othersin Civil Appeal No. SLP (C) No. 15848 of 2019 has held that appeal should be filed within a stipulated period prescribed under the law. The belatedly appeals can only be condoned when sufficient reason is shown. The assessee must explained each day’s delay. Thus, plea of condonation of delay raised by assessee is liable to be rejected. The ld. Sr. DR, further submits that assessee is habitual defaulter in not attending the proceeding before lawful authorities. The ld Sr DR for the revenue prayed for rejecting the plea of condonation of delay in filing this appeal and to dismiss the appeal in limine.
I have considered the contentions of both the parties and have gone through the orders of lower authorities carefully. I find that impugned order was passed by ld CIT(A) on 24.02.2024 and this appeal was filed before Tribunal on 28.03.2025, hence there is delay of 341 days in filing appeal. I find that in support of application for condonation of delay; the assessee has filed his own affidavit. In his affidavit, the assessee has explained the fact that studied up to 10th standard and is not aware about tax matters and was totally dependent upon his Chartered Accountant (CA). While filing appeal, his CA has given own email address as wadyekarcoaudit@gmail.com. I, find that first appeal was filed on 08.06.2023. The notices for fixing the date of hearing by ld. CIT(A) were issued as per their office record. Considering the overall facts and circumstances of the case and the plea of ld. AR of the assessee, I find merit in the submissions of ld AR of the assessee was prevented by sufficient cause by not attending the hearing or in filing submission before ld. CIT(A) as the notices were issued through e-mails only.
The e-mail on the ITBA system belongs to the CA who has filed appeal before CIT(A). The ld CIT(A) issued notice under section 250 for making submission for making submission on or before 12.02.2024 and thereafter on 19.02.2024. Thus, both dates of hearing were fixed within 10 days. Further, considering the submissions of AR of the assessee that his consultant not informed the assessee about dismissal of his appeal and the assessee realised about the dismissal of his appeal only when his bank account was attached by recovery officer and the appeal was filed immediately. In my view the delay in filing appeal is not intentional or deliberate; hence, the delay in filing of appeal is condoned. Even, otherwise, it is also settled position in law that when technical consideration and cause of substantial justice are pitted against the each other, the cause of substantial may be preferred. Hence, delay of 341 days in filing this appeal is condoned.
The ratio of decision in Ajay Dabra Vs Pyre Ram & Other (supra) relied by ld SR DR for the revenue is not applicable on the facts of the present case. In the said case, Hon’ble Apex Court held that each day of delay must be explained. However, the Hon’ble Court also held that there must be a reasonable explanation for the delay. The delay in the said case was not explained to the satisfaction of the High Court. The appellant/ applicant in the said case took plea that he was not having sufficient funds to pay the court fees, which was not found sufficient to the High Court as the applicant was businessman being hotelier. However, in the case in hand the foremost plea of assessee is that he was not aware of passing the order by ld CIT(A) and the appeal is filed immediately on coming to know of dismissal of his appeal. Now adverting to the merits of the case.
I find that the assessing officer while passing assessment order under section 144 and made addition on account of cash deposit in two different bank account with Canara Bank during demonetisation period. The additions were made in ex-parte proceedings for the want explanation. Considering the fact that assessee is interested in pursuing his case on merit and that substantial rights of the assessee are involved, the matter is restored back to the file of assessing officer to pass the assessment order afresh. Needless to direct before passing assessment order afresh, the assessing officer shall allow reasonable opportunity of hearing to the assessee. Assessee is also directed to be more vigilant in future in making timely compliance and not to seek adjournment without any valid reasons. In the result, grounds of appeal of assessee allowed for statistical purpose.
In the result, the appeal of the assessee is allowed for statistical purpose.