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Facts
The assessee filed a return for AY 2012-13 admitting total income of Rs.3,14,000. The AO noted cash deposits of Rs.58,19,000, and after the assessee failed to respond to notices, added this as undisclosed income, assessing total income at Rs.61,33,200. A penalty of Rs.17,28,897 was also imposed.
Held
The Tribunal condoned the delay in filing the appeals before the CIT(A) and set aside the orders of the CIT(A) and the AO. The matter was remitted back to the AO for a denovo assessment, providing the assessee with a reasonable opportunity to be heard.
Key Issues
Whether the assessee's appeals should be admitted despite delay and non-participation, and whether a denovo assessment is warranted due to procedural lapses.
Sections Cited
147, 144B, 68, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI ABY T VARKEY & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER S.R.RAGHUNATHA, AM:
These appeals of the assessee are filed against the separate orders of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, (in short ‘ld.CIT(A)’) for the assessment year 2012-13, vide both the orders dated 23.06.2025 against the assessment order passed by the AO, NFAC, Delhi, u/s.147 r.w.s 144B of the Income Tax Act, 1961 (in short & 2895/Chny/2025 ‘the Act’) dated 25.09.2021 and the penalty order u/s.271(1)(c) of the Act dated 23.12.2021 respectively.
The brief facts of the case are that the assessee is an individual and has filed his return of income on 04.01.2023 for the AY 2012-13 by admitting total income of Rs.3,14,000/-. Based on the information available with the department, the Assessing Officer noticed that the assessee made cash deposits to the tune of Rs.58,19,000/- into his bank account. The AO issued statutory notices to the assessee and called for details, but the assessee failed to respond the any of the notices. The AO completed the assessment u/s.147 r.w.s 144B of the Act dated 25.09.2021 after making addition of cash deposit of Rs.58,19,000/- as undisclosed income u/s.68 of the Act and arriving total income of Rs.61,33,200/-.
Further, the AO imposed a penalty of Rs.17,28,897/- being 100% of the tax sought to be evaded on the concealed income by passing a penalty order u/s.271(1)(c) of the Act dated 23.12.2021.
Aggrieved by the orders of the Assessing Officer, the assessee filed two separate appeals before the ld. CIT (A), NFAC, Delhi. The ld.CIT(A) dismissed the appeals in limine without condoning the delay in filing the quantum appeal with a delay of 3 months and 2 days and penalty appeal with a delay of 4 days, stating that the assessee has stated as ‘NO’ against the question relating to delayed filing in Form – 35. Further, the ld.CIT(A) has provided thirteen opportunities in both the appeals, to the assessee to appear for hearings as detailed in paragraph 7 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A) passed separate orders dated 23.06.2025 by confirming the orders of the Assessing Officer. Aggrieved by the impugned orders of the Ld.CIT(A), the assessee is in appeal before us. & 2895/Chny/2025
The ld.AR submitted that the assessee has maintained proper books of accounts and has also filed Tax Audit Report in Form 3CB-3CD. The above deposits made are properly accounted and explained by way of books of account maintained by the assessee and lower authorities are not justified in assessing the entire deposits as income and delay has been covered by the Covid Pandemic. In view of the above, the ld.AR prayed to set aside the order of ld.CIT(A) and remit the issues to the file of Assessing Officer. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment effectively.
Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).
We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed order by considering the submissions made by the assessee along with the information available with the department and the same has been dismissed by the ld.CIT(A), NFAC due to non-participation. Since the assessee has failed to participate before the Assessing Officer as well as the ld.CIT(A), we levy the cost of Rs.5,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the assessee shall satisfy the payment of cost before the authorities.
Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we deem it fit to provide one more opportunity for the assessee. Therefore, we condone the delay in filing the appeal before ld.CIT(A) as the assessee had filed the condonation of delay in his form 35 itself and :-4-:
& 2895/Chny/2025 hence, we set aside the order of the ld.CIT(A) and remit the matter back to the file of AO to frame the denovo assessment in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.
Since the order in quantum appeal in (supra) has already been set aside and remitted back to the AO, the consequential penalty order passed u/s.271(1)(c) of the Act dated 23.12.2021, is likewise hereby set aside and remitted back to AO to decide the issue along with the quantum assessment.
In the result, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the court on 29th December, 2025 at Chennai.