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Facts
The assessee, an employee of Toyota Kirloskar Pvt. Ltd, filed his return for AY 2017-18 declaring income of Rs. 7,72,350. The case was selected for limited scrutiny regarding cash deposits during the demonetization period. Notices under Section 143(2) and 142(1) were issued, but the assessee neither appeared nor furnished any explanation. Consequently, the assessment was completed under Section 144, treating cash deposits of Rs. 6,71,291 as unexplained income under Section 69.
Held
The Tribunal observed that the assessee could not represent the case before the AO due to lack of awareness of online notices and procedures, leading to an ex-parte assessment. The CIT(A) dismissed the appeal due to delay without condoning it. In the interest of justice, the Tribunal remitted the entire issue to the AO for de-novo consideration.
Key Issues
Whether the CIT(A) erred in dismissing the appeal on the ground of limitation without providing an opportunity for hearing, and whether the additions made under Section 69 were justified without considering the explanation of prior cash withdrawals for loan repayment.
Sections Cited
250, 144, 69, 115BBE, 143(2), 142(1), 249(3), 249(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. ADDL/JCIT(A)-4 Mumbai dated 27.8.2024 vide DIN & Order No. ITBA/APL/S/250/2024-25/1068025407(1) passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2017-18.
The assessee has raised the following grounds of appeal:
Basavaraj Mahalingayya Hiremath, Ramanagara Page 3 of 6 3. Brief facts of the case are that the assessee being an employee of Toyota Kirloskar Pvt. Ltd filed his return of income for the assessment year 2017-18 on 3.7.2017 declaring total income of Rs.7,72,350/-. Thereafter, the case was selected for limited scrutiny through CASS to examine the issue “Cash deposited during the demonetization period”. Accordingly, notices u/s 143(2) as well as 142(1) of the Act were issued calling for information regarding the nature and source of cash deposits and transaction during the year. However, the assessee has neither appeared nor furnished any explanation or information in response to notices including the show cause notice issued. Therefore, the assessment was completed under the provisions of section 144 of the Act based on the information available on records and as per the best of the AO’s judgment and accordingly the entire cash deposits of Rs.6,71,291/- made by the assessee during the demonetization period was treated as unexplained income u/s 69 of the Act under the head “income from other sources” and is added to the total income of the assessee for the assessment year 2017-18.
3.1 Aggrieved by the assessment completed u/s 144 of the Act, the assessee filed an appeal before the ld. Joint Commissioner(Appeals) / CIT(A).
3.2 The ld. ADDL/JCIT(A)-4 Mumbai dismissed the appeal of the assessee on the sole ground of not condoning the delay in filing the Appeal as no sufficient cause has been shown as per the provisions contained in section 249(3) of the Act for the assessee’s failure to file the appeal within the prescribed period of limitation u/s 249(2) of the Act r.w.s. 5 of Limitation Act. Since the delay in filing of the appeal has not been condoned by the ld. ADDL/JCIT(A)-4 Mumbai and therefore, the ld. ADDL/JCIT(A)-4 Mumbai has not admitted the appeal for the adjudication on merits.
Before us ld. A.R. of the assessee vehemently submitted that the assessee could not represent his case before the AO since assessee was not at all aware of the notices issued or order passed against him. Further, AR submitted that the assessee is not a tax savvy and hence was not aware of the procedure to view the notices online on the Income Tax Portal. Further, ld. A.R. of the assessee submitted that the show cause notice issued by the AO on 13.12.2019 requiring the assessee to comply on or before 18.12.2019, whereas the Assessment order had been passed on 23.12.2019 in haste and the same order is actually signed digitally only on 29.12.2018 and accordingly the assessment order is illegal and bad in law. Further, the assessee had also submitted before the ld. ADDL/JCIT(A)-4 Mumbai that he was not aware of the notices being issued or order being passed against him and hence could not reply to notices within the stipulated time. Further, the assessee again reiterated that he was not aware of the procedure to view the notices online on the income tax portal. Further after being aware of the existence of an order, the assessee decided to take professional help and immediately filed an appeal. Therefore, because of this reasonable cause, there was a delay of 418 days in filing the appeal before the ld. ADDL/JCIT(A)-4 Mumbai, which should be accepted by ld. ADDL/JCIT(A)-4 Mumbai.
The ld. D.R. on the other hand supported the orders of the authorities below.
We have heard the rival submissions and perused the materials available on record. It is an undisputed fact that assessee could not represent his case before the AO and accordingly the AO has passed an order under the provisions of section 144 of the Act based on the information available on records and as per Basavaraj Mahalingayya Hiremath, Ramanagara Page 5 of 6 the best of the AO’s judgment. It is also an undisputed fact that ld. CIT(A) dismissed the appeal on the ground of not condoning the delay in filing the appeal in the absence of sufficient cause and accordingly not admitted the appeal for adjudication on merits. Being so, in the interest of justice and fair play and as requested by the ld. A.R. of the assessee, we remit the entire issue in dispute to the file of AO for de-novo consideration and decide the case in accordance with law. The assessee is also directed to produce the bank account statements as well as loan statements along with written submission as produced before us for the consideration of AO. The assessee is also directed to produce/submit such other documents/record/information/explanation as may be required by the AO for proper adjudication of the case. Needless to say, reasonable opportunity of being heard must be granted to the assessee to represent his case. The assessee is also directed to update his e-mail ID/contact number and address on the income tax web portal. In case of further default, the assessee shall not be entitled for any leniency. Ordered accordingly.
In the result, appeal of the assessee is partly allowed for statistical purposes.