Loading judgment…
Facts
The assessee filed an appeal challenging an order related to AY 2017-18. The case involved cash deposits made during demonetization, which the AO treated as unexplained under Section 69A. The assessee's initial appeal before the CIT(A) was dismissed due to a significant delay and lack of reasonable cause.
Held
The Tribunal held that the assessee had not provided any explanations or documents to justify the cash deposits and had also failed to prosecute the appeal effectively before the Tribunal, including a considerable delay without a condonation application.
Key Issues
Whether the cash deposits made by the assessee during demonetization were unexplained, and if the assessee's failure to appear, provide explanations, and condone delays warrants dismissal of the appeal.
Sections Cited
143(1), 143(2), 142(1), 133(6), 69A, 44AB, 144, 269A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI, VICE – & 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 03/02/2023 in respect of the A.Y. 2017-18 and raised the following grounds: “
4. The Appellant is an Income Tax Assessee, voluntarily filed return of Income past several years regularly.
5. Further, the Appellant is to state that he is one of the Partner in M/s. Sreenidhi Enterprises, having PAN: ABPFS 1982 D and filed return of Income for the Assessment Year 2017-18.
6. The Appellant submits that M/s. Sreenidhi Enterprises did not have their current account with any bank to operate and therefore, the entire cash sales and cash deposits were made into his SB A/c. (Canara Bank) bearing No. 64070072646 which is belongs to the Appellant. Actually, the said transactions were belongs to M/s. Sreenidhi Enterprises. Simultaneously, they have issued the cheques from the same account towards purchases on behalf of M/s. Sreenidhi Enterprises. Such being the case, the entire cash deposits made in the SB accounts belongs to M/s. sreenidhi enterprises 7. The Appellant is ready to produce all the books of accounts for your kind verification and perusal.
8. The Appellant submits that the cash deposits made to his SB A/c. is explainable along with documentary proof 9. The Appellant submits that cash deposits made to his SB a/c. does not fall under unexplained cash deposits under the provisions of section 69A.
Further their books of accounts have been audited under the provisions of section 44AB of the Income Tax Act, 1961 in the case of M/s. Sreenidhi Enterprises. Thus there is no justification in cash deposits advances to the declared income of the assessee.
11. Finally, the Appellant states that the Disallowances and additions made by the Respondent is illogical, and opposed to the facts and which requires to set aside in the interest of equity and natural justice. Under the circumstances, the Appellant prays this Hon'ble Court may please pass :- a) Set aside the impugned Assessment Orders and Appeal Order b) Allow to submit additional documentary evidences and written statement if required before passing final order c) To allow this Appeal in the interest of equity and justice.”
The brief facts of the case are that the assessee filed his return of income on 28/03/2018. The said return was processed u/s. 143(1) of the Act and thereafter it was selected for limited scrutiny through CASS, for enquiring about the cash deposits made during the year. Notices u/s. 143(2) as well as u/s. 142(1) were issued and served to the assessee through email. The assessee had not responded to the said notices. Thereafter the AO issued notice u/s. 133(6) of the Act to the State Bank of India and Canara Bank and the State Bank of India had furnished the bank statements of the assessee. From the statement, the AO had found that a sum of Rs. 2,80,000/- was deposited during the demonetisation period in cash. Further, the AO based on the information available with the department had alleged that the assessee had deposited a sum of Rs. 82,76,700/- in his Canara Bank account during the demonetisation period. Since the assessee had not given any explanations for the said deposits, the AO had treated the same as unexplained cash deposits and made addition u/s. 69A of the Act. As against the said order, the assessee filed an appeal before the Ld.CIT(A) with a delay of 4 years, 4 months and 20 days and also filed an application to condone the said delay.
3. In the said application, the assessee submitted that his counsel was not in station from 10/01/2020 to 25/03/2020 and therefore the assessee completely forgets about the filing of the appeal before the Ld.CIT(A) and he came to know about the mistake committed by him only when the penalty demand was made by the AO and thereafter the assessee approached the Chartered Accountant in Bangalore and filed the appeal and therefore prayed to condone the said delay of 4 years, 4 months and 20 days. The Ld.CIT(A) had not convinced with the reasons stated in the application to condone the delay and dismissed the appeal since the delay is abnormal and no sufficient cause was in existence to condone the said delay.
As against the said order, the assessee filed this present appeal before this Tribunal.
The assessee filed this appeal with a delay of 443 days which was communicated by the Registry through its defect notice dated 27/06/2024. The said defect notice was also sent by RPAD on 03/07/2024 but the said RPAD was returned by the postal authorities with an endorsement that “no such person in the address”. Even though several defects were pointed out by the Registry, it seems that the assessee had not complied with any of the defects mentioned by the Registry. In the defect notice, it was informed that the appeal is posted for hearing on 01/08/2024. The assessee had not appeared on 01/08/2024 and therefore the matter has been adjourned to 11/09/2024. Thereafter on the subsequent dates, the assessee had not appeared and also not rectified the defects mentioned in the notice and therefore we are not able to ascertain the real cause for the said delay of 443 days.
Even though the assessee had not appeared on various dates i.e. 11/09/2024, 14/10/2024, 12/11/2024, 30/12/20214, 17/02/2025, 24/03/2025, 27/03/2025, 22/05/2025, 21/07/2025, this Tribunal had time and again issued notices to the assessee as well as the Chartered Accountant whose address is M/s. Paresh S. Shah & Co., CA, No. 9-D, 9th Floor, Solus Jain Heights, No. 2, 1st Cross, J.C. Road, Bangalore – 560 027 and by email as well as by RPAD. The emails sent to the assessee was not returned and in fact the RPAD cover sent on 21/08/2024 was returned by the postal department again saying the very same reasons. Similarly, another RPAD notice sent on 05/11/2024 was also returned by the postal authorities by saying that the “addressee not found”. With great difficulty, the Registry also found out another address of the AR and sent the notice on 12/11/2024 to the following address: Mr. Jagadeesh S.G, No. 411, 2nd Floor, Dr. Rajkumar Main Road, Rajaji Nagar, 6th Block, Bangalore – 560 010.
Subsequently, the appeal was posted for hearing on 18/09/2024 and none appeared for the assessee and also not filed any compliance report about the defects mentioned by the Registry. Therefore, we have heard the Ld.DR and proceeded to decide the appeal on merits.
We have heard the arguments of the Ld.DR and perused the material documents available.
As seen from the assessment order, it is an order made u/s. 144 of the Act even though the assessee was served with various notices. Similarly, before the Ld.CIT(A), the assessee filed the appeal with a delay of 4 years, 4 months and 20 days and filed an application to condone the said delay but the assessee had not given any plausible explanation for the inordinate delay and therefore the Ld.CIT(A) had dismissed the appeal on the ground of limitation. Now the assessee has approached this Tribunal and raised several grounds on merits. Even before us, the assessee had filed this appeal with a delay of 443 days but not enclosed any application to condone the said delay. The Registry also pointed out the said defects along with the other defects but the assessee had not rectified the said defects. Apart from that, the assessee had also not appeared in any of the hearing dates. We have also perused the record and found that the notices sent by RPAD was returned with an endorsement that “no such person in the address”. The Registry also took pain to serve the notice through the authorised representative M/s. Paresh S. Shah & Co., CA and subsequently through the another authorised representative Mr. Jagadeesh S.G. In spite of the several steps taken by the Registry, the assessee had not appeared before this Tribunal. In fact the assessee had not filed an application to condone the delay of 443 days. This shows the attitude of the assessee that he is not interested in prosecuting the appeal. Before us, the assessee had not filed any application to condone the said delay and therefore we are not able to see whether there is any sufficient cause available for condoning the said delay.
10. We have perused the records placed before us and we have decided to decide the appeal on merits with the available documents. It is the case of the AO that the cash deposits made during the demonetisation period was not at all explained by the assessee before him. Therefore, the AO had treated the said deposits as unexplained money u/s. 69A of the Act. Similarly, before the Ld.CIT(A), the assessee had filed the appeal with a delay of 4 years, 4 months and 20 days but not given any valid explanations for the said inordinate delay. It seems that the assessee had also not filed his written submissions before the Ld.CIT(A). Therefore, the Ld.CIT(A) had also dismissed the appeal on the ground that the appeal was filed with an inordinate delay.
Before us, except filing the appeal with a delay of 443 days, the assessee had not bothered to follow up the appeal and tried to rectify the defects mentioned by the Registry on 27/06/2024. We have also perused the other documents, i.e. the returned covers sent by RPAD, from which we find that the RPAD covers were returned for the reason that “no such person in the address”. Further steps were also taken by this Tribunal by sending the notices to the ARs but all went in vain. Even before us, the assessee had not filed any documents to show that the cash deposits are genuine and from the known sources in order to take a different view. When the AO had made an allegation that the cash deposits were not explained, it is the duty of the assessee to appear and explain the source for the said deposits in order to avoid the addition made u/s. 69A of the Act, but the assessee had not appeared before the AO and also not filed any plausible explanations for the said cash deposits and also not approached the Ld.CIT(A) in time and also not explaining the delay in filing the appeal with an inordinate delay. Therefore, we are not having any documents to decide the appeal on merits. In such circumstances, we do not find any error in the order made by the AO and confirmed by the Ld.CIT(A). We, therefore dismiss the appeal on the ground that the appeal was not filed in time and no application has been filed to condone the said delay and also on the grounds that the assessee had not furnished any documents to show that the addition made u/s. 269A is unwarranted.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the open court on 15th December, 2025.