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Facts
The assessee, a milk distributor, faced scrutiny for substantial cash deposits made during the demonetization period. The Assessing Officer completed an ex-parte assessment under Section 144, adding Rs. 2.95 crore as unexplained cash credit under Section 68. The CIT(A) dismissed the assessee's appeal *in limine* due to a 134-day delay in filing.
Held
The ITAT condoned the assessee's 85-day delay in filing the appeal before it and, applying principles of natural justice, remanded the entire matter back to the Assessing Officer for a *de novo* assessment on merits, providing the assessee another opportunity to present their case.
Key Issues
Whether the CIT(A) erred in not condoning the delay in filing the appeal, and whether the ex-parte assessment and addition under Section 68 for unexplained cash deposits were justified without granting adequate opportunity to the assessee.
Sections Cited
250, 142(1), 133(6), 144, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
(Assessment Year: 2017-18) Amina Nathu Shaikh Income Tax Officer-26(1)-1 4th Ali Bharmik Nagar Aidada, Nehru G Block BKC, Bandra Kurla Vs. Nagar, Kurla (E), Mumbai – 400024. Complex, Mumbai – 400051. PAN/GIR No. CMCPS1230A (Assessee) : (Respondent) Assessee by : Ms. Rupal Shrimal : Shri. Ram Krishn Kedia (Sr. DR) Respondent by : 11.03.2025 Date of Hearing Date of Pronouncement : 17.03.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18.
It is observed that the assessee has filed the present appeal with a delay of 85 days beyond the period of limitation for which the assessee has filed an application for condoning the said delay along with an affidavit. On perusal of the same, we deem it fit to condone the delay for the reason that the assessee had ‘sufficient cause’ for the said delay. Delay condoned.
The assessee has raised the following grounds of appeal:
(A.Y. 2017-18) Amina Nathu Shaikh “1. in the facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre erred in not condoning the delay of 134 days in filing of the appeal by the Appellant.
2. In the facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre erred in not condoning the delay of 134 days in filing of the appeal by the Appellant and dismissing on grounds of Jurisdiction without also coming to a finding upon the merits of the Appeal after considering the submissions of the Appellant.
3. In the facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre erred in not condoning the delay of 134 days in filing of the appeal by the Appellant without appreciating that the Appellant was in the business of trading in milk, is not educated and certainly not computer savy.
4. In the facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre erred in confirming the additions u/s. 68 on account of amount deposited in the bank to the tune of Rs. 2,95,31,790 due to non- submission of Information at the time of assessment without appreciating that the Appellant was in the business of trading in milk and that payments had been made to the milk suppliers by the same bank account.
5. In the facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre erred in not appreciating that the ex-parte Assessment made by the Assessing Officer u/s 144 of the Income-tax Act, 1961 was bad in law as no notices were received by her physically and that the Appellant was not educated and not computer savy.
6. In the facts and circumstances of the case and in law, the Ld. National Faceless Appeal Centre erred in not deleting the addition u/s 68 of the Income- tax Act, 1961 made ex-parte by the Assessing Officer.”
Brief facts of the case are that the assessee is an Individual carrying on business in the name of Amina Milk Distributors and engaged in the business of trading of milk by procuring the same from Milk Distributors viz. Mother Dairy and Parag Milk Food Products which is sold to various individuals in their locality. The assessee’s case was selected for scrutiny for the reason that the assessee had made huge cash deposits during the demonetization period and notices u/s. 142(1) of the Act were issued and served (A.Y. 2017-18) Amina Nathu Shaikh upon the assessee, despite the assessee had not filed her return of income for the year under consideration in response to notice u/s. 142(1) of the Act. The ld. Assessing Officer (ld. A.O. for short) issued notice u/s. 133(6) of the Act, to the banks and in reply to the same, found that the assessee has deposited Rs.2,95,31,790/- during pre- demonetization period, demonetization and post-demonetization period. The ld. AO passed the assessment order u/s. 144 of the Act, vide order dated 29.06.2019 being the best judgment assessment for the reason that the assessee was non-compliant during the assessment proceedings and determined the total income at Rs. 2,95,31,790/- after making an addition u/s. 68 of the Act being unexplained cash credit.
Aggrieved the assessee was in appeal before the first appellate authority, challenging the assessment order.
The ld. CIT(A) vide order dated 14.08.2024, dismissed the appeal filed by the assessee in limine without condoning the delay of 134 days in filing the appeal before the First Appellate Authority.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the additions made by the ld. A.O. before the first appellate authority but has filed the appeal belatedly with a delay of 134 days beyond the prescribed period of limitation. The ld. CIT(A) has rejected the appeal of the assessee for the reason that the assessee has failed to substantiate that there was ‘sufficient cause’ for the said delay.
(A.Y. 2017-18) Amina Nathu Shaikh 9. The learned Authorised Representative (ld. AR for short) for the assessee contended that the assessee has got a good case on the merits and prayed that the assessee may be given one more opportunity to present her case before the lower authorities.
The learned Departmental Representative (ld. DR for short) vehemently opposed to setting aside the issue to the lower authorities for the reason that the assessee was given sufficient opportunity before the ld. AO as well as before the ld. CIT(A) but has not availed of the same. The ld. DR relied on the order of the lower authorities.
In the above facts of the case, it is observed that the assessee has been non-compliant before the lower authorities and has not furnished any documentary evidence to substantiate the source of the cash deposit made in her bank account during demonetization period and also pre and post demonetization period. In the interest of justice, we are inclined to extend the assessee one more opportunity to present her case before the ld. AO by adhering to the principles of natural justice. The assessee is directed to cooperate in the proceeding before the ld. AO without any undue delay from her side and the ld. AO is to decide the issue on the merits of the case as per the submission of the assessee. We therefore remand all these issues back to the file of ld. AO for de novo assessment.