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Facts
The assessee, T.M. Handlooms Private Limited, made significant cash deposits, with ₹2,86,54,300/- identified as unexplained cash credits under Section 68 by the Assessing Officer for AY 2011-12, as the assessee failed to respond to notices and did not file tax returns. The CIT(A) dismissed the assessee's appeal due to non-prosecution. The assessee filed appeals before the Tribunal with a delay of 250 and 275 days for AY 2011-12 and 2012-13 respectively, citing inability to access emails or file submissions as a defunct company.
Held
The Tribunal condoned the delay in filing the appeals, accepting the reasons as bonafide. Both matters were remanded back to the Assessing Officer for fresh consideration, subject to the assessee paying a cost of ₹10,000/- for each assessment year to the State Legal Aid Authority within 30 days. The Assessing Officer is directed to consider the documentary evidence to be filed by the assessee regarding the cash deposits.
Key Issues
Condonation of delay in filing appeals; justification of additions under Section 68 for unexplained cash credits; and whether the matter should be remanded to the Assessing Officer for fresh consideration.
Sections Cited
68, 133(6), 148
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Before: Shri S.S. Viswanethra Ravi & Shri Jagadish
O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
Both the appeals filed by the assessee are directed against separate orders dated 28.11.2023 and 03.11.2023 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment years 2011-12 and 2012-13 respectively.
We find that both the appeals are filed with a delay of 250 days for AY 2011-12 and 275 days for AY 2012-13. The assessee filed petitions for condonation of delay with the support of notarized affidavits.
The ld. AR Shri T. Vasudevan, Advocate drew our attention to the petitions for condonation of delay and argued the assessee was really prevented due to reasons stated in the petitions and prayed to condone the delay. The ld. DR Ms. R. Anita, Addl. CIT, vehemently opposed the submissions of the ld. AR. She argued that the reasons explained by the assessee are general in nature and no sufficient cause was explained in filing the appeal belatedly. After hearing both the parties, we find the reasons stated in petitions are bonafide, which really prevented the assessee in filing the appeal in time, thus, the delay of 250 days for AY 2011-12 and 275 days for AY 2012-13 are condoned.
Since issues raised in both the appeals are similar based on the same identical facts, with the consent of the both the parties, we proceed to hear the appeals together and pass consolidated order for the sake of convenience.
First, we shall take appeal in AY 2011-12 for adjudication.
The assessee raised 7 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the additions made by the Assessing Officer under section 68 of the Income Tax Act, 1961 [“Act” in short] in the facts and circumstances of the case.
7. The Assessing Officer noted that as per information received under NMS cycle, the assessee made cash transactions exceeding ₹.10,00,000/- during the FY 2010-11 relevant to the AY 2011-12. Despite various notices issued, there was no response to any of the statutory notices issued by the Assessing Officer. Thereafter, the Assessing Officer issued notice under section 133(6) of the Act to the Branch Manager, City Union Bank Ltd. and obtained bank statement, which reveals that the assessee made deposits to the tune of ₹.3,29,64,300/-, out of which ₹.3,26,54,300/- was deposited by cash. Shri M. Meenakshi Sundaram, Director of the assessee company filed a reply and the contents are reproduced at para 5 of the assessment order. Since the assessee company did not file any return of income till 24.12.2018, the Assessing Officer served on the assessee a draft assessment order based on the details available on record. In response, the assessee filed its objection by taking a plea that no notice under section 148 of the Act received by it. After disposing the objection of the assessee and by considering the submissions of the Director of the assessee company explaining source to an extent of ₹.40,00,000/-, the Assessing Officer added the balance cash deposit of ₹.2,86,54,300/- [₹.3,26,54,300 – 40,00,000] to the total income of the assessee as unexplained cash credit under section 68 of the Act. On appeal, the ld. CIT(A) dismissed the appeal for want of prosecution.
8. Before us, the ld. AR submits that the assessee company is a defunct one and could not check e-mails in the absence of any employee. Due to circumstances beyond its control, the assessee could not file written submissions in support of the grounds raised before the ld. CIT(A). He prayed to remand the matter back to the file of the Assessing Officer and undertook that the assessee is ready to furnish the documentary evidences to substantiate its claim.
9. Upon hearing both the parties, we note that the assessee could not furnish any evidence for the cash deposits of ₹.2,86,54,300/-. Thus, the Assessing Officer treated the same as unexplained cash credit under section 68 of the Act and added to the total income of the assessee. Before the ld. CIT(A), the assessee could not file any written submissions in support of the grounds raised to substantiate its claim or responded to the notices issued by the ld. CIT(A). We note that the ld. AR submits that now the assessee is ready with all relevant material evidences and undertakes that the assessee is ready to prosecute his case if this Tribunal afford an opportunity to the assessee before the Assessing Officer. Considering the facts and circumstances of the case and in the interest of justice, we deem it proper to remand the matter to the file of the Assessing Officer for fresh consideration subject to the condition of payment of cost of ₹.10,000/- for each assessment years 2011-12 and 2012-13 in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the assessee shall produce receipt of payment of cost to the Assessing Officer for his satisfaction. The Assessing Officer shall satisfy the payment of costs and proceed to consider the documentary evidences as may be filed by the assessee towards cash deposits and decide the claim of the assessee in accordance with law. The assessee is at liberty to file evidence in support of his claim. Thus, the grounds raised by the assessee are allowed for statistical purposes. for AY 2012-13 10. Similar issues on identical facts have been raised by the assessee in its appeal for AY 2011-12 in and since, we have remanded the matter to the file of the Assessing Officer, our findings would be equally applicable to the assessment year under consideration.
Thus, the grounds raised by the assessee for AY 2012-13 are allowed for statistical purposes.
In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 07th February, 2025 at Chennai.