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Facts
The assessee, engaged in the restaurant business, did not file an income tax return for AY 2017-18. Based on information of abnormal cash deposits during demonetization (SBNs worth Rs. 29.97 lakhs and other credits of Rs. 30.41 lakhs), the AO issued notices, and upon no response, made an ex-parte addition of Rs. 60.38 lakhs as unexplained money u/s 69A r.w. Section 115BBE and passed an order u/s 144. The assessee's appeal before the CIT(A) was dismissed for non-participation, leading to the current appeal before the Tribunal with a delay of 222 days, which was condoned.
Held
The Tribunal condoned the delay in filing the appeal, noting the assessee's financial and personal difficulties. Following the Supreme Court decision in Tin Box Company vs CIT, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the Assessing Officer to frame a de novo assessment after providing the assessee a reasonable opportunity. A cost of Rs. 10,000/- was levied on the assessee for non-participation before the lower authorities.
Key Issues
Condonation of delay in filing appeal; validity of ex-parte assessment and appeal dismissal for non-participation; addition of unexplained cash deposits and credits.
Sections Cited
139(1), 139(4), 142(1), 133(6), 69A, 115BBE, 144
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM :
This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi dated 06.05.2024 and pertains to assessment year 2017-18.
At the outset, we find that registry has recorded a delay of 222 days in appeal filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the delay in filing the appeal was due to the financial problems coupled with personal life problems and health issues of mother-in-law. Hence, there was a delay in filing the appeal by :-2-: ITA. No:714/Chny/2025 the assessee. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interest of justice, we condone delay in filing of appeal and admit the appeal filed by the assessee for adjudication.
The brief facts of the case are that the assessee was an individual engaged in the restaurant business and had not filed return of income for the A. Y. 2017-18 either u/s.139(1) or u/s.139(4) of the Act. The assessee was asked to file the return by issuing notice u/s.142(1) of the Act based on the information of abnormal cash deposit during demonetization period. However, the assessee did not file return of income. Further, the AO issued statutory notices to the assessee. Since, the assessee did not respond for any notices the AO obtained the details of deposit from the bank u/s.133(6) of the Act and found that during the A.Y.2017-18 the assessee had deposited SBNs to the tune of Rs.29,97,000/- in his bank account maintained with Oriental Bank of Commerce, Chennai during the demonetization period from 09.11.2016 to 31.12.2016. Further, the AO noticed that there are so many credits other than cash deposits in his bank account totally to the tune of Rs.30,41,000/- during F.Y.2016-17. In response to the notice, the assessee submitted the Bank Book for the Current Account and Ledger Account of term loan for the period from April 2016 to Mar 2017. On perusal of the documents, the AO was not convinced and made an addition of entire credits in the bank of Rs.60,38,000/- as unexplained money u/s.69A r.w.s.115BBE of the Act, based on the material evidence available on records and passed an order u/s.144 of the Act on 20.11.2019.
:-3-: ITA. No:714/Chny/2025 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC.
At the outset, we observed that the ld.CIT(A) has provided four opportunities for the assessee to appear for hearings as detailed in paragraph 6.1 of the 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), NFAC was dismissed the assessee’s appeal by confirming the order of the AO dated 06.05.2024. In view of the above, the ld.AR prayed for one more opportunity before the AO, since the exparte order has been passed by the AO u/s.144 of the Act. Further, the ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the Assessing Officer to complete the assessment proceedings 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 Assessing Officer has passed an exparte order by considering the information available with the department and the same has been dismissed by the ld.CIT(A), NFAC, Delhi due to non-participation of the assessee before the first appellate authority. Since the assessee has failed to participate both before the Assessing Officer as well as the appellate authority, we levy the cost of Rs.10,000/- to be :-4-: ITA. No:714/Chny/2025 paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order.
In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of Assessing Officer by relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Company vs CIT, [2001] 249 ITR 216 (SC) and direct AO to denovo frame the assessment order in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 22nd July, 2025 at Chennai.