VIKRAM REDDY,CHENNAI vs. ITO, NCW-18(5), CHENNAI

First, we shall take up the appeal filed against quantum addition in for adjudication, wherein, the assessee challenged the exparte order passed by the ld. CIT(A) without condoning the delay in filing the appeal.

At the outset, we note that the assessee is an individual and no return of income filed. According to the Assessing Officer, the assessee is a salaried employee and made cash deposits prior to demonetization period as well as during demonetization period totaling to ₹.3,88,93,360/-. Despite various notices issued by the Assessing Officer under section 142(1) of the Act requiring the assessee to file the return of income as well as to explain the source for the cash deposits made, there was no response from the assessee to file the return of income or furnishing details for the cash deposit, but, however, simply informed the Assessing Officer that the assessee is out of India. Since the assessee did not explain the source for the cash deposits in various bank account, the entire cash deposits of ₹.3,88,93,360/- is brought to tax under section 69 of the Act vide his order under section 144 of the Act dated 29.11.2019.

The assessee carried the matter in appeal before the ld. CIT(A) with a delay of 660 days in filing the appeal. The assessee filed a condonation petition before the ld. CIT(A) explaining the reasons for the & 311/Chny/2025 delay. However, by rejecting the condonation petition, the ld. CIT(A) dismissed the appeal. On being aggrieved, the assessee carried the matter in appeal before the Tribunal.

The ld. AR for the assessee submits that the assessee duly submitted petition for condonation of delay in filing the appeal before the ld. CIT(A). The ld. AR explained the reasons for the delay in filing the appeal before the ld. CIT(A) was covered by Covid-19 pandemic and the balance No. of 90 days was due to waiting for his employer’s instructions to handle the matter about cash deposits made to his bank account on behalf of the employer. The ld. AR prayed for condoning the delay and remits the matter to the file of the ld. CIT(A) to adjudicate the issue on merits.

The ld. DR fairly conceded that the filing of appeal during Covid-19 pandemic period has been dispensed with the limitation by the Hon’ble Supreme Court.

Heard both the parties and perused the material available on record. Against the assessment order under section 144 of the Act, the assessee preferred an appeal before the ld. CIT(A). The assessee has filed a petition for condonation of delay in filing the appeal before the ld. CIT(A), which is reflected at page 4 of the impugned order. Before us, the ld. AR explained the reasons for the delay in filing the appeal before the ld. CIT(A) was covered by Covid-19 pandemic and the balance No. of 90 days was due to & 311/Chny/2025 waiting for his employer’s instructions to handle the matter about cash deposits made to his bank account on behalf of the employer. We note that in the impugned order, there was no mention of issuing any notice of hearing to the assessee by the ld. CIT(A) calling explanation from the assessee, but, however, simply rejected the condonation petition filed by the assessee and dismissed the appeal. Under the above facts and circumstances, in the interest of justice, we deem it proper to remit the matter to the file of the ld. CIT(A) with a direction to condone the delay and adjudicate the issue on merits in accordance with law by affording reasonable opportunity of being heard to the assessee. Thus, the grounds raised by the assessee are allowed.

On being aggrieved, the assessee is in appeal before the Tribunal against levy of penalty under section 270A of the Act. Since the quantum addition made by the Assessing Officer under section 144 of the Act has & 311/Chny/2025 not attained its finality as the Tribunal, herein above, remanded the matter to the file of the ld. CIT(A) to condone the delay in filing the appeal and adjudicate the issue on merits, the penalty levied under section 270A of the Act is liable to be quashed. However, since we have remitted the quantum addition to the file of the ld. CIT(A) for adjudication in accordance with law, the levy of penalty under section 270A is also remitted to the file of the ld. CIT(A) for fresh adjudication after deciding the quantum addition on merits. Thus, the grounds raised by the assessee are allowed for statistical purposes.

In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the court on 20th March, 2025 at Chennai.