Loading judgment…
Facts
The assessee filed an appeal against an ex-parte order of the NFAC and had a delay of 456 days. The assessee claimed the delay was due to the negligence of their tax consultant. The appeal concerned cash deposits made during the demonetisation period, which the AO treated as income under Section 69A.
Held
The Tribunal condoned the delay in filing the appeal, noting that the assessee should not suffer due to the tax consultant's mistakes. The Tribunal also set aside the orders of the lower authorities and remitted the issue back to the AO for fresh adjudication.
Key Issues
Whether the delay in filing the appeal can be condoned due to the tax consultant's negligence and whether the cash deposits were from a known source.
Sections Cited
144, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘SMC’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of NFAC, Delhi dated 18/09/2023 in respect of the A.Y. 2017-18.
The present appeal has been filed by the assessee with a delay of 456 days. The assessee in support of the said delay had filed an application to condone the said delay. In the application, the assessee submitted that the previous tax consultant who has filed the appeal before the Ld.CIT(A) had Ld.CIT(A) and in fact he has also not furnished any written submissions before the Ld.CIT(A). The assessee, having no legal knowledge to follow up the appeals, had mainly relied on the said tax consultant. The tax consultant miserably failed to appear before the Ld.CIT(A) and also not informed about the disposal of the appeal ex-parte. The assessee came to know about the ex- parte order of the Ld.CIT(A) only when the assessee received a call from the local income tax officer for recovery of the demand during the first week of February, 2025. Thereafter necessary arrangements were made and the appeal was filed before this Tribunal.
We have heard the arguments of both sides and also perused the reasons stated in the delay condonation application and in the interest of justice, we have decided to allow the said application for the reason that the assessee should not be suffered for the mistakes committed by the tax consultant.
At the outset, we find that the order of the Ld.CIT(A) is an ex-parte order. Similarly, the AO had also made an assessment u/s. 144 of the Act. The only dispute involved in this appeal is the cash deposits made during the demonetisation period. The assessee filed his reply only to the show cause notice issued by the AO and enclosed the copy of the statement of affairs and the VAT return copies. In the reply, the assessee submitted that the cash deposits are from out of the sale of liquor. The AO not satisfied with the reply had treated the said deposits as income u/s. 69A of the Act. The appeal filed by the assessee was also not decided on merits.
At the time of hearing, the Ld.AR submitted that the assessee is having all the documents to show that the cash deposits made during the demonetisation period are only from the known sources and prayed an opportunity to put forth his case before the authorities below.
We have heard the arguments of both sides and perused the materials available on record.
As seen from the materials available on record, the assessee had known source of income through selling the liquor. The assessee instead of filing the relevant records before the AO, had filed the statement of affairs and the VAT return copies. Therefore we are of the view that the assessee had valid explanations for the deposit of cash during the demonetisation period but unfortunately, the assessee had not properly responded before the AO as well as before the Ld.CIT(A).
Considering the said facts and circumstances of the case, we are of the view that one more opportunity may be granted to the assessee to appear before the AO and furnish the required documents in support of his claim that the cash deposits during the demonetisation period were earned from the sale of liquor. We, therefore, set aside the orders of both the authorities and remitted this issue to the file of the AO. We also direct the assessee to pay a cost of Rs. 5,000/- to the income tax department and produce the receipt before the AO for adjudicating the issue afresh.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 20th August, 2025.