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Facts
The assessee, an individual, filed her return of income and was selected for limited scrutiny regarding cash deposits during the demonetisation period. Notices were issued, and the AO added amounts u/s. 69A of the Act and proposed penalty u/s. 271D for alleged violation of section 269SS. The assessee's appeal before the CIT(A) was dismissed ex-parte due to non-appearance.
Held
The Tribunal condoned the delay in filing the appeal, noting the assessee's age, health issues, and lack of technical knowledge. The Tribunal set aside the CIT(A)'s order and restored the issue to the CIT(A) for a decision on merits after granting the assessee an opportunity of being heard.
Key Issues
Whether the penalty imposed u/s. 271D was justified, and whether the assessee should be granted a fresh opportunity to present her case before the CIT(A) after an ex-parte dismissal.
Sections Cited
143(2), 142(1), 69A, 269SS, 271D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SHRI WASEEM AHMED & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 26/03/2025 in respect of the A.Y. 2017-18.
The brief facts of the case are that the assessee is an individual and filed her return of income on 14/07/2017. Subsequently, the case was selected for limited scrutiny through CASS to examine the cash deposits made during the demonetisation period. Notice u/s. 143(2) was issued on 09/08/2018 and thereafter notices u/s. 142(1) were issued. The AO had sought for the explanation about the source of cash deposits made during the demonetisation period. The assessee submitted the copy of the rental agreement and rental receipt, bank statements and proof of the gifts received from her husband and explained that these are the sources for depositing cash into her bank account. The AO had not accepted the said explanations and added the said amounts u/s. 69A of the Act. Thereafter a show cause notice was issued in which the AO had alleged that the assessee had received rent / deposits / specified sum in cash and therefore violated section 269SS of the Act. Therefore he has proposed to impose penalty u/s. 271D of the Act. The assessee filed her reply and stated that she is aged lady and having ailments and therefore she could not travel to withdraw the rental deposits and therefore received the said amount by cash. The AO had not accepted the said explanations and relied on the section 269SS and confirmed the penalty u/s. 271D of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A). But unfortunately, the assessee had not appeared to the various hearing notices and therefore the Ld.CIT(A) had decided the appeal on merits based on the materials available on record. The Ld.CIT(A) had dismissed the appeal on the ground that the various claims made in the appeal are without any supporting evidences.
As against the said order, the present appeal has been filed before this Tribunal.
The appeal was filed with a delay of 27 days and also enclosed an application to condone the said delay in which the assessee had relied on her knee ailments and she had no knowledge to view the portal or email communications. The assessee also submitted that only when she approached her tax consultant for filing her return of income for the A.Y. 2025-26, she came to know about the ex-parte order of the Ld.CIT(A) and thereafter the appeal was made ready and filed before this Tribunal with a delay of 27 days. We have considered the said reasons given in the said application and we are condoning the said delay and proceeded to decide the appeal on merits.
5. At the time of hearing, the Ld.AR submitted that the assessee is a 72 year old home-maker and she does not know to view the portal or email to find out the hearing notices sent by the Ld.CIT(A). The Ld.AR further submitted that if one more opportunity is granted, the assessee would appear before the Ld.CIT(A) and decide the issue on merits. The Ld.AR undertook to receive the notices in the email ID mentioned in form 36 which relates to the AR.
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
In the present case, the only dispute is about the imposition of penalty u/s. 271D of the Act since the assessee had violated the provisions u/s. 269SS of the Act. We have considered the submissions made by the assessee that she is an old lady having knee ailments and therefore she was not able to travel to withdraw the rental receipts from the bank and therefore received the rents in cash. Since the Ld.CIT(A) had not considered the issue on merits, we are not inclined to go into the merits of the case.
Considering the fact that the assessee is a 72 years old lady and having knee ailments and also the fact that she has no technical knowledge to operate the portal as well as the email, we are granting one more opportunity to the assessee to appear before the Ld.CIT(A). We also recorded the undertaking given by the Ld.AR that the hearing notices may be sent to the email ID mentioned in form 36 and the assessee would appear before the Ld.CIT(A) and prosecute her case on merits. The email ID of the Ld.AR is as follows: mahendar@accfinsource.com 10. Therefore we set aside the order of the Ld CIT(A) and restore this issue to the file of the LdCIT and also directs the Ld.CIT(A) to send communications to the assessee through this email ID and thereafter decide the appeal on merits after granting an opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the open court on 18th December, 2025.