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Facts
The assessee, a non-filer and milk distributor, failed to respond to notices and participate in assessment proceedings. Appeals were filed with significant delay before the First Appellate Authority (FAA) and were dismissed ex-parte. The primary issue relates to cash deposits made during demonetization.
Held
The Tribunal noted the assessee's failure to file returns and participate in proceedings, as well as the inordinate delay in filing appeals. However, considering the issue of demonetization period cash deposits and the AO's failure to examine them under specific CBDT instructions, the matter was remitted back to the AO for in-depth examination.
Key Issues
Whether the Tribunal should remit the issue of demonetization period cash deposits to the AO for re-examination, despite the assessee's non-participation and delay in filing appeals.
Sections Cited
144
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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI. LAXMI PRASAD SAHUANDSHRI. KESHAV DUBEY
Per Laxmi Prasad Sahu, Accountant Member :
Both these appealsfiled are filed by the assesseea gainst the ex-parte Order passed by the CIT(A), for the Assessment Years 2017-18 and 2018-19. The issues involved in both the appeals are similar in nature. Both these appeals were heard together. Accordingly, we are passing a common order for both the Assessment Years.
Assessee is a non-filer of income tax return. Assessee is carrying business in the name of Mangala Distributors. Since assessee has not responded to any of the notices inspite of sending various reminders and final opportunity granted, assessment was completed under section 144 of the Act. In the present , 187/Bang/2025 Page 2 of 4 proceedings before the First Appellate Authority (FAA), assessee appealed with inordinate delay.
Before the FAA, assessee filed reason for delay in filing appeal and prayed for admitting the appeal for adjudication. The ld. FAA did not admit the appeal of the assessee for the Assessment Year 2017-18 and noted that there is inordinate delay of 391 days in filing the appeal. The Ld. FAA did not condone the delay for both the Assessment Years and dismissed the appeals of the assessee. The learned Counsel reiterated the reasons submitted for condonation of delay in filing the appeals before the ld. FAA and submitted that assessee had no knowledge of the income . tax proceedings and assessee is a distributor of milk. She does not have the income tax proceedings, that is why assessee did not file return of income for Assessment Year 2017-18 and the assessee is earning commission income only, which is very less. The AO has made high pitch assessment and entire cash deposits in bank accounst has been considered as income without considering the withdrawals made for purchase of milks to the vendors which is complete injustice to the assessee. The learned Counsel explained the reasons for not participating in the assessment proceedings. Assessee has also filed a Paper Book containing 152 pages and prayed for remitting the matter back to the AO and undertook that if a chance is given to the assessee, assessee will submit the entire documents for substantiating her case.
The learned DR objected for granting further chance to the assessee and submitted that the AO has no materials to consider the expenditure. Therefore, the AO was bound to make the assessment only on the basis of the materials available before him. Even at the first and second appellate stages, assessee did not file any Income and Expenditure Account. For the Assessment Year 2017- 18, assessee should have prepared Profit and Loss Account. Still it is disputed fact that how much income has been earned by the assessee for Assessment , 187/Bang/2025 Page 3 of 4 Year 2017-18 is not known. Inspite of huge cash deposits and addition mde by the AO, assessee has not furnished any document for identifying himself as a distributor. The reasons submitted by the assessee for delay in filing the appeal before the AO is a casual reason and objected for condoning the delay.
Considering the rival submissions for the Assessment Year 2017-18, assessee deposited huge cash in her bank account. Inspite of that, assessee did not file return of income. In the assessment proceedings for both the Assessment Years, assessee has not participated. Even assessee filed appeals belatedly before the Ld. FAA and the reason submitted is not accepted by the ld. fAA andLd. FAA dismissed the appeal of the assessee ex-parte. Since the issue involved in the Assessment Year 2017-18 is related to the cash deposits made during the demonetization period and the AO has not examined the same in the light of the CBDT instructions issued specific to examine the cash deposits made during demonetization period, therefore, considering facts and circumstances of the case and submissions from both the sides, we are remitting this issue back to the file of the AO for examination in depth with cogent materials and the assessee is directed to participate in the income tax proceedings as undertook by the learned Counsel for the assessee and not to seek unnecessary adjournments for early disposal of the case. Further, in the case of failure to comply with the above, no second leniency shall be granted to the assessee.
, 187/Bang/2025 Page 4 of 4 6. In the result, appeals filed by the assessee are allowed for statistical purposes. A common Order passed shall be kept in the respective case files.
Pronounced in the court on the date mentioned on the caption page.