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Facts
The assessee failed to file the return of income for AY 2013-14 and did not respond to notices. The Assessing Officer (AO) made additions for unexplained cash deposits and brokerage income, and imposed a penalty. The CIT(A) dismissed the assessee's appeal. The assessee filed an appeal before the Tribunal with a delay, offering an affidavit to appear and cooperate.
Held
The Tribunal condoned the delay in filing the appeals. For ITA No. 460/Chny/2025, the matter was remanded to the CIT(A) for fresh adjudication on merits after considering evidence, as the AO's additions had not attained finality. For ITA No. 461/Chny/2025, the penalty was deleted as the underlying additions were remanded.
Key Issues
Whether the CIT(A) should condone the delay and decide the appeal on merits, and if the penalty for unexplained cash deposits and brokerage income is sustainable when the additions are remanded.
Sections Cited
139(1), 147, 148, 142(1), 144, 144B, 69A, 271(1)(c)
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Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
Both the appeals filed by the assessee are directed against separate orders both dated 20.11.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2013-14.
2. First, we shall take up appeal in for adjudication of confirmation of quantum addition.
We find that this appeal was filed with a delay of 14 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeals in time. Thus, the delay is condoned and admitted the appeal for adjudication.
4. At the outset, we note that according to the Assessing Officer, the assessee has deposited cash of ₹.1,63,33,867/- in savings bank account, deposited cash of ₹.1,03,02,000/- in a banking company and received brokerage of ₹.17,81,596/- during the year under consideration, which is clear from first para of assessment order. The assessee did not file his return of income as per section 139(1) of the Income Tax Act, 1961 [“Act” in short]. To take recourse action under section 147 of the Act, the Assessing Officer issued notice under section 148 of the Act dated 31.03.2021 through ITBA. However, the assessee did not file the return of income. Thereafter, the Assessing Officer issued notices under section 142(1) of the Act dated 10.11.2021, 08.02.2022 & 17.02.2022 and also issued show-cause notice under section 144 of the Act dated 24.02.2022. Since the assessee has not complied with any of the notices issued, the Assessing Officer left with no other alternative but to complete the assessment under section 147 r.w.s. 144 r.w.s. 144B of the Act vide order dated 25.03.2022 assessing total income of the assessee at ₹.2,84,17,463/-, inter alia making additions of unexplained cash deposits under section 69A of the Act as well as addition towards income from brokerage. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld. CIT(A) with a delay of 299 days. Having not satisfied with the condonation petition filed by the assessee, the ld. CIT(A) dismissed the appeal.
The ld. AR Shri Y. Sridhar, F.C.A. submits that non-response to the notices issued by the Assessing Officer is neither wilful nor wanton. He filed a notarized affidavit dated 08.05.2025 of the assessee, who undertakes to appear and prosecute the case before the Assessing Officer/the ld. CIT(A) and prayed to afford an opportunity to the assessee, the content in the notarized affidavit is reproduced herein below: I, Anwar Sulthan Akbar Ali, aged 54 years, residing at No. 5131, Mosque Road, Ayapakkam B.O., Ayapakkam, Tiruvallur 600 077, Tamil Nadu, do hereby solemnly affirm and state as follows: 1. I am fully acquainted with the facts and competent to swear to this affidavit.
That I am assessed to income tax by the Income Tax Officer, Non Corporate Ward 19(3), Chennai.
3. That I have not filed the return of income for the Assessment year 2013-14.
For the Assessment Year 2013-14, the ld. AO passed an order u/s 147 rws 144 rws 144B of the Income Tax Act, 1961 by adding a sum of Rs.2,84,17,463/- on account of alleged unexplained cash deposits us 69A and also imposed penalty u/s 271(c) of the Income Tax Act, 1961. Aggrieved by the orders, an appeal was preferred before the Hon'ble Commissioner of Income Tax (Appeals), NFAC, Delhi, who has dismissed the same. Further appeals have been preferred before the Hon'ble Income Tax Appellate Tribunal, Chennai, against the above ld. CIT (A) orders. 5. That l hereby undertake to appear in person before the ld. Assessing Officer and/or the Commissioner of Income Tax (Appeals), as and when required, in connection with the proceedings initiated under the Income Tax Act, 1961 pertaining to Assessment Year 2013-14. 6. That I further undertake to furnish all necessary documents, information, and explanations as may be required by the Department during the course of the assessment or other related proceedings. 7. That this affidavit is made to place on record my undertaking to fully cooperate with the income tax authorities and to ensure timely compliance with their requirements. 8. I affirm that all the above averments are true and correct to the best of my knowledge and belief. 6. The ld. DR Shri P. Krishna Kumar, JCIT objected the same and submits the assessee totally failed to prosecute its case before the Assessing Officer and also, inspite of ample opportunities afforded to the assessee by the ld. CIT(A).
Having considered the submissions of the ld. AR and ld. DR, we note that the Assessing Officer made additions of unexplained cash deposits under section 69A of the Act as well as addition towards income from brokerage. We find that there is no assistance from the assessee before the Assessing Officer and the ld. CIT(A) and the Assessing Officer completed the assessment under section 147 r.w.s. 144 of the Act dated 25.03.2022. As there is no assistance from the assessee, taking into account the undertaking given by the assessee vide affidavit dated 08.05.2025 that he is ready to appear and prosecute his case, thus, in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) to condone the delay and decide the issues afresh on merits after considering the written submissions/ documentary evidences as may be filed by the assessee to substantiate his claim. In any case, if the assessee fails to appear before the ld. CIT(A), it is open to the ld. CIT(A) to complete the appellate proceedings based on the material available on record in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes.
271(1)(c) of the Act. 8. We find that this appeal was filed with a delay of 14 days. The assessee filed affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeals in time. Thus, the delay is condoned and admitted the appeal for adjudication.
We note that against the assessment order under section 147 r.w.s. 144 r.w.s. 144B of the Act dated 25.03.2022, the Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act for the additions made in the assessment order. Since we have remanded the quantum additions to the file of the ld. CIT(A) for de novo consideration and since the additions made by the Assessing Officer has not attained its finality, the penalty levied under section 271(1)(c) of the Act become infructuous and deleted accordingly.
In the result, the appeal filed by the assessee in is allowed for statistical purposes and the appeal in is allowed. Order pronounced on 29th May, 2025 at Chennai.