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Facts
The assessee, engaged in the lorry transportation business, made significant cash deposits in his bank account for which he did not file a return of income. This led to the initiation of reassessment proceedings under Section 147 of the IT Act due to alleged escapement of income.
Held
The Tribunal condoned the delay in filing the appeal, noting the assessee's reasons including professional guidance failure and the COVID-19 pandemic. The Tribunal set aside the order of the CIT(A) and remitted the matter back to the Assessing Officer for a de novo assessment.
Key Issues
Whether the delay in filing the appeal was justifiable, and whether the matter should be remitted for a fresh assessment considering the assessee's non-participation in earlier proceedings.
Sections Cited
147, 148, 144, 249
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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), Salem, dated 10.10.2019 and pertains to assessment year 2010-11.
At the outset, we find that there is a delay of 1920 days in appeal filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that Mr.Rajendran, Tax
:-2-: ITA. No:978/Chny/2025 Practitioner, Namakkal failed to give proper professional guidance to the assessee. Further, the delay was also on account of COVID 19 Pandemic from 15.03.2020 to 28.02.2022 affected across the country. Thereby, the delay in filing appeal reduced to 743 days. The assessee became aware of the impugned order only on commencement of recovery proceedings by the TRO, Coimbatore on 19.03.2025. Hence, there was a delay in filing the appeal by 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 interests 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 engaged in lorry transportation business and had made cash deposits amounting to Rs.16,87,700/- in his savings bank account maintained with ICICI Bank, National Stock Exchange, Namakkal during the financial year 2009-10 relevant to the assessment year 2010-11. However, on verification made in AST, it is found that the assessee did not file any return of income for this assessment year. The veracity of the sources through which the said deposits were made could not be verifiable in the absence of any return of income. Having not filed any return of income, but, making deposits of such high magnitude, prima facie, indicates and establish the truth that the assessee has failed to disclose fully and truly all material facts to the department for his assessment. Hence, having perused the information
:-3-: ITA. No:978/Chny/2025 available on record and the facts of the assessee's case forms the reason to believe that the income at least to the extent of Rs.16,87,700/- being unexplained cash deposits made by him, liable to tax, has escaped assessment within the context and purview of the section 147 of the IT Act. Therefore, as there is escapement of income, in order to assess the correct and exact income of the assessee, proceedings u/s.147 of the Act has been initiated after obtaining proper approval from the Higher Authorities and the notice u/s.148 of the Act was issued on 30.03.2017. The case was selected for scrutiny and statutory notices were sent by the AO. The assessee did not participate in assessment proceedings and hence the AO passed an order U/s.144 r.w.s. 147 of the Act dated 28.11.2018 by determining taxable income of Rs.24,05,330/-.
Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the ld. Commissioner of Income Tax (Appeals), Salem.
At the outset, we observed that the Ld.CIT(A) has provided four opportunities to the assessee to appear for hearings as detailed in paragraph 3 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) confirmed the order of Assessing Officer with available details by passing an order dated 10.10.2019. Further, 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.
:-4-: ITA. No:978/Chny/2025
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), Salem 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 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.
:-5-: ITA. No:978/Chny/2025 9. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 15th July, 2025 at Chennai.