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Facts
The assessee, an 80-year-old widow, filed an appeal challenging additions made to her income. The additions were based on cash deposits made during demonetization, which she claimed were her deceased husband's savings from his 'bhikshuki' services and her stridhan. She also faced a delay in filing the appeal.
Held
The Tribunal condoned the delay in filing the appeal, considering the assessee's age, circumstances, and the principle of substantial justice. It held that the additions sustained by the CIT(A) were not sustainable, partly due to a Rs. 2.5 lakh exemption for housewives and partly because a portion of the deposit was from relatives.
Key Issues
Whether the delay in filing the appeal can be condoned, and whether the additions made by the revenue authorities based on demonetization deposits are sustainable given the assessee's circumstances and the nature of the funds.
Sections Cited
250, 1961, 143(3), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH MUMBAI
Before: HON’BLE SHRI BR BASKARAN & HON’BLE SHRI SANDEEP GOSAIN
Date of Hearing 13.03.2025 Date of Pronouncement 21.03.2025 आदेश / ORDER PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the assessee challenging the impugned order 13.06.2024 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / Ld. CIT(A) for the A.Y 2017-18.
2. At the very outset, we noticed that there is a delay in filing the present appeal. In this regard Ld. AR drawn our attention towards affidavit filed by the assessee, thereby seeking condonation of delay and the contents of which were reproduced here in below:
That I am a senior citizen aged 80 years and a widower. My spouse late Shri Kamalakar Deo was engaged in providing bhikshuki services. It was the only source of his income and our livelihood. For the services provided by my spouse, he used to receive only cash from several individuals for performing the last rites, etc.
That my spouse unfortunately passed away on 29th October 2014. On his demise, all his earnings which were in form of cash in hand were bestowed on me as stridhan.
That during the demonetization period, I had deposited all my accumulated savings, stridhan in cash which were in old currency in the bank accounts for exchange of new currency. On account of these cash deposits, income tax department had selected my case for scrutiny proceedings under section 143(3) of the Act. An assessment order dated 07.10.2019 under section 144 was passed making additions of Rs. 15,18,252/- to the income.
That I do not have any educational qualifications. I sought the help of my relatives and with their help I was able to file an appeal against the impugned assessment order dated 07 10.2019. I was able to submit the response in the appeal proceedings with their help only. I do not have sufficient means to appoint a counsel to handle my income tax matters. Thus, there were times when the notices or other communications issued was overlooked.
That the impugned appeal order dated 05.10.2023 under section 250 of the Income Tax Act, 1961 was passed by Ld. National faceless Appeal Centre, CIT(A), for A.Y. 2017-18. I had not received the impugned order physically. I had received a call from the 10799/13ncome tax department for the recovery of taxes. It was at that time, I became aware that some order was passed in my case.
6. That I requested my nephew to log-in into Income Tax e- filing portal and upon reviewing, he informed me that an order was passed against me. I with my nephew then approached an advocate on pro-bono basis and they advised me to file an appeal before the higher authorities. Hence, now I am in the process of filing the appeal before the Hon'ble Income Tax Appellate Tribunal.
7. That it was because of this reason; I could not file appeall the statutory limitation period of 60 days.
Hence, this affidavit is being made in support of my application Date the Hon'ble Income Tax Appellate Tribunal, Mumbai to condone the delay in filing of appeal. 3. After having heard the counsels for both the parties and considering the affidavit filed by the assessee and taking into consideration the age of the assessee and the circumstances mentioned therein and while keeping in view the principles laid down by honourable Supreme Court of India in the case of Land Acquisition Collector Vs. Mst. Katiji & Ors., [1987] AIR 1353 (SC), wherein it has been held that where ‘substantial justice’ is pitted against technicalities of non deliberate delay, then in that eventuality substantial justice is to be preferred. In our view the principles of advancing ‘substantial justice’ is of prime importance. Hence considering the explanation put forth by the assessee by justifiably and properly explaining the delay, which occurred in filing the appeal and construing the expression “sufficient cause” liberally, condone the delay in filing he appeal and hence appeal is admitted to be heard on merits.
4. Through this appeal, the assessee has challenged the additions sustained by Ld. CIT(A). In this regard, we have heard both the parties, perused the material placed on record and the orders passed by the revenue authorities.
5. From the records, we noticed that additions were sustained by Ld. CIT(A) on the ground that assessee had deposited an amount of Rs. 13,62,000/- in her bank account during the demonetisation period, but could not substantiate the source of the said deposits. However, considering the fact of announcement by Government that the small deposits made in the banks by housewife’s shall not be questioned by the department in view of the fact that exemption limit for income tax was Rs.2.5 lakhs. Therefore considering that the assessee is housewife, the additions were restricted to Rs.11,21,500/- after giving relief of Rs.2.5 lakhs to the assessee.
We have considered the details filed by the assessee and from the records we noticed that the assessee is a senior citizen widow and a homemaker aged about 80 years. The late husband of the assessee was a priest and was engaged in the ‘Bhikshuki activities’ and also used to perform puja and last rites rituals for the last approximately 30 years. As per the case set up by the assessee, after the death of her husband the assessee was fully dependent upon the lifelong savings which were accumulated over a period out of the said bhikshuki activities. However due to old age, ill health and fear of medical emergency, the cash receipts were kept at home. Since the demonetization scheme was brought into being. Therefore, the appellant had to exchange old currency in new currency and in this way, the entire life savings of approximately 30 years was deposited by the assessee in bank.
We are also of the view that income tax assessments are not based on ‘strict rule of evidences’ and ‘preponderance of probabilities’ and circumstantial evidences also needs to be taken into account to assess the true income of the person. It is also an undisputed fact brought on record that assessee is residing in a rented room and in such a circumstances it is practically impossible for a widow senior citizen to earn such a huge amount of income in one year, even otherwise the cash deposited in the bank account during the demonetisation period has not been withdrawn from the account which goes to show that it was assessee’s own money which she inherited from her husband who had accumulated over the years. Even if we calculate by taking into consideration the amount well below the minimum exemption limit for the past seven years, then also it would justify the claim of the assessee.
8. No contrary, evidence has been brought on record by the revenue to disprove the version put forth by the assessee through her affidavit therefore, considering the totality of the facts and circumstances of the present case, we direct the Ld.AO to deletion of additions.
Now coming to the additions of an amount of Rs.1,46,752/- is concerned. In this regard, it is an undisputed fact that amount of Rs.1,38,318/- relates to other credit in the bank account of the assessee and the said amount consist of internal bank transfers from her distant relatives. Thus the same not being income of the assessee. Therefore, the additions on this count are not sustainable.
In the result, the appeal filed by the assessee stands allowed.
Order pronounced in the open court on 21.03.2025.
Sd/- Sd/- (BR BASKARAN) (SANDEEP GOSAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 21/03/2025 KRK, PS आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��थ� / The Respondent. 2. संबंिधत आयकर आयु� / The CIT(A) 3. आयकर आयु�(अपील) / Concerned CIT 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, मु�बई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, स�ािपत �ित //True Copy//
1. उप/सहायक पंजीकार ( Asst. Registrar) आयकर अपीलीय अिधकरण, मु�बई मु�बई / ITAT, Mumbai मु�बई मु�बई