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Facts
The assessee, an employee of a poultry centre, deposited a significant amount of cash during the demonetisation period. He was considered a non-filer, and after not responding to notices, additions were made to his income. The assessee appealed against the assessment order, but his appeal was dismissed by the CIT(A) due to a delay.
Held
The Tribunal held that the delay in filing the appeal before the CIT(A) was for sufficient reason. The assessee's circumstances, including being a driver unaware of tax proceedings and issues with receiving notices, were considered. The Tribunal restored the appeal to the AO for fresh assessment.
Key Issues
Whether the delay in filing the appeal before the CIT(A) was sufficiently explained, and if the appeal should be admitted for hearing on merits.
Sections Cited
144, 133(6), 142(1), 251(1)(a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH : BANGALORE
Before: SHRI PRASHANT MAHARISHI
This appeal is filed by Shri Ravi Rao (the assessee/appellant) for the assessment year 2017-18 against the appellate order passed by the National Faceless Appeal Centre, Delhi (NFAC) [ld. CIT(A)] dated 5.6.2025 wherein the appeal filed by the assessee against the assessment order passed u/s. 144 of the Income-tax Act, 1961 [the Act] dated 28.12.2019 by the ITO, Ward 1, Chamarajanagar was dismissed
as there was a delay of 1560 days in filing of the appeal which was held by the ld. CIT(A) not for sufficient reasons.
The brief facts of the case show that assessee is an individual, who is employed by one Kuber Raj, Proprietor of M/s. Mahalakshmi Ganesha Poultry Centre. The job of the assessee was to sell poultry on behalf of Mr. Kuber Raj. The ld. AO found that assessee is a non-filer of return who has deposited a cash of Rs.15,91,900 during the demonetisation period in his bank account with SBI No.xxxxxx706. The assessee was issued notices and information was also gathered u/s. 133(6) of the Act from the Bank wherein it was found that assessee has deposited cash of Rs.1,25,77,079 prior to demonetisation, Rs.15,91,900 during the demonetisation and Rs.41,07,320 during the demonetisation during FY 2016-17. The total cash deposit was Rs.1,82,76,299. As no reply was forthcoming, the AO issued a show cause notice which was also not replied. Accordingly the ld. AO made an addition of Rs.15,91,900 being cash deposit during the demonetisation period and on other cash deposit of Rs.1,66,84,399 estimated the profit @ 8% on turnover amounting to Rs.13,34,752 and passed assessment order u/s. 144 of the Act on 28.12.2019 determining the total income of assessee at Rs.29,26,652.
The assessment order was received by the assessee on 28.12.2019, but the appeal was filed on 6.5.2024 and therefore appeal was delayed by 1561 days. The appellant has filed reasons for condonation of delay in Form 35 and also supported with an Affidavit. It was stated by the assessee that the appeal could not be filed in time due to non-receipt of notice u/s. 142(1), subsequent notices and also the assessment order due to negligence of the previous consultant and further time consumed in finding another Consultant to prepare the appeal. It was stated that assessee came to now about the passing of the assessment order only when the demand recovery notices were issued. The ld. CIT(A) did not find it a sufficient cause and held that there is no sufficient cause shown for the delay in the filing of appeal and hence the appeal was not admitted and dismissed.
The assessee is aggrieved with the same and is in appeal before me. It was submitted that the delay in filing appeal before the ld. CIT(A) was the for the reason that notices issued u/s. 142(1) of the Act which was issued on 17.1.2018 is in fact not issued on that date but the same is issued on 30.8.2019. The same was not received by the assessee through physical mode or electronic mode. It was further stated that the assessment order passed u/s. 144 of the Act on 28.12.2019 was also not received by the assessee. The assessee came to know of it only at the time of recovery of demand initiated by the ld. AO. Therefore it was submitted that there was sufficient cause for delay in filing of the appeal. The assessee also explained the nature of cash deposit and also explained that there is a difference between the cash deposit stated by the AO and as per the bank account. Thus, the ld. AO has made an incorrect addition. Thus, the ld. AR submitted that the dismissal of the appeal by the ld. CIT(A) stating that there is no sufficient cause for delay in filing appeal is incorrect. He further submitted that during the assessment proceedings the assessee could not remain present because the Tax Consultant did not respond to the notices and assessee was not aware about the ongoing proceedings.
The ld. DR vehemently supported the orders of the ld. lower authorities and submitted that assessee has failed to submit the details before the ld. lower authorities which has resulted into addition. Further assessee failed to explain the reasons for delayed filing of the appeal. Thus, there is no infirmity in the orders of the ld. lower authorities.
I have carefully considered the rival contentions and perused the orders of the ld. lower authorities. I find that the assessment order has been passed u/s. 144 of the Act. In such cases, as per the provisions of section 251(1)(a) of the Act the ld. CIT(A) is directed to send it back to the AO for making a fresh assessment. However, in the case of assessee, delay was not condoned and appeals was not admitted by the ld. CIT(A) which is late by 1561 days. On careful consideration of the reasons stated by the assessee, it is apparent that the assessment order passed by the ld. AO along with several notices issued during the assessment proceedings were not attended by the Tax Consultant. As soon as the assessee came to know about the outstanding demand, he immediately got the appeal filed. In these peculiar circumstances, I find that the delay in filing of appeal before the ld. CIT(A) was for sufficient cause. The background of the assessee also show that he is not aware about the tax proceedings. He is an employee, being driver of a vehicle of a poultry centre who is delivering chickens on behalf of his employer by transporting the chickens to retail shops in and around Chamarajanagar. The assessee collects the sale proceeds from the small shopkeepers and deposits the same in the bank account of his employer. He deposits the same in his bank account and transfers it on a daily basis the same to the bank account of his employer with SBI, Yadavagiri Branch, Mysore. The assessee has also explained the modus operandi. This is because of the reason that earlier assessee used to deposit the cash in the bank account of his employer, the Bank has refused to accept Bank account credit of the third party and according to the instruction of the Bank, he was depositing in his bank account and thereafter transferred it to the account of his employer. In this situation, the assessee could not file the appeal in time. Further he has also stated in the Statement of Facts the show cause notice issued as per the assessment order is not shown in the income tax portal till date and the assessment order also came to the knowledge of the assessee only at the time of recovery notice. Therefore, the ld. CIT(A) irrespective of the number of days of the delay, if found for sufficient reason should have condoned the delay.
In view of the above facts, I restore the whole appeal back to the file of the ld. AO with a direction to the assessee to submit the necessary details before the ITO, Ward 1, Chamarajanagar within 90 days from the date of this order about the cash deposited in his bank account. The ld. AO may examine the same and then decide the issue in accordance with the law, after giving the assessee an opportunity of hearing.
In the result, the appeal by the assessee is allowed for statistical purposes.
Pronounced in the open court on this 27th day of October, 2025.