Loading judgment…
Facts
The assessee-firm deposited cash during the demonetization period but failed to file an income tax return or explain substantial bank credits (Rs. 1,84,63,232/-) despite receiving notices. Consequently, the Assessing Officer treated the entire amount as unexplained money under Section 69A, taxing it under Section 115BBE. The assessee's appeal to the CIT(A) was dismissed due to a 166-day delay without condonation.
Held
The ITAT condoned the 334-day delay in filing the appeal before it, noting the CIT(A) had previously dismissed the assessee's appeal due to a 166-day delay without condonation. To ensure natural justice, the Tribunal remitted the case back to the CIT(A) for a fresh decision on merits, directing the CIT(A) to decide the issue without being influenced by earlier observations.
Key Issues
The key issues were the condonation of delays in filing appeals before both the CIT(A) and the ITAT, and the justification for the CIT(A)'s dismissal of the appeal without considering condonation, alongside the substantive taxability of unexplained cash deposits and bank credits under the Income Tax Act.
Sections Cited
249(2), 142(1), 140, 133(6), 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ) & Shri Rajesh Kumar
Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 15th January, 2024 passed for Assessment Year 2017-18.
(A.Y. 2017-2018) Boutique De Fleur 2. The appeal is time barred by 166 days in filing the appeal by the assessee before the ld. CIT(Appeals). Though the assessee filed a condonation petition before the ld. CIT(Appeals) and prayed to condone the delay, but the ld. CIT(Appeals) did not condone the delay and without condoning the delay decided the appeal on merits as there was no sufficient cause for condonation of the delay for non-filing of condonation petition within the specified time limit before him in conformity with the provisions of section 249(2) of the Act. The ld. A.R. further submitted that the assessee was not aware of the date of hearing before the ld. CIT(Appeals). Though the assessee in the Form No. 35 has stated the reason that there was a delay due to medical condition only. Therefore, the assessee was not in a position to appear before the ld. CIT(Appeals). But the ld. CIT(Appeals) decided the appeal filed by the assessee without condoning the delay on the ground that there was no sufficient cause for condonation of the inordinate delay in filing of the appeal as well as negligent attitude on the part of the appellant. On being aggrieved, the assessee preferred an appeal before the ITAT.
2.1. The appeal is also time-barred by 334 days in filing the appeal by the assessee before the Tribunal. Though the assessee did not file any condonation petition in support of condonation of delay.
Considering the facts and circumstances of the case, we are of the view that the assessee was prevented in filing the appeal within the stipulated time. Therefore, we are inclined to condone the delay of 334 days. Hence the delay is condoned.
(A.Y. 2017-2018) Boutique De Fleur 4. The facts in brief are that during the demonetization period (09.11.2016 to 30.12.2016), the assessee-firm deposited cash of Rs.13,18,000/- in its Kotak Mahindra Bank, Minto Park Branch. The assessee was requested vide notice under section 142(1) of the Act dated 14.03.2018 to furnish a true and correct return of its income duly verified as per section 140 of the Act and as per format prescribed in Rule 12 of the Income Tax Rules on or before 31.03.2018. In response to notice under section 142(1), the assessee did not file its return of income. Thereafter notice under section 133(6) of the Act was sent to the Branch Manager, Kotak Mahindra Bank, Minto Park Branch on 04.09.2019. In response, Kotak Mahindra Bank furnished bank statement through e-mail and it was found that during FY 2016-17, it had deposited total cash of Rs.45,31,590 in its bank account including demonetization period cash deposits of Rs.12,47,000/-. It was also found that total credits in its bank account were Rs.1,84,63,232/- for the FY 2016- 17. The assessee was requested to explain vide notice under section 142(1) dated 09.09.2019 the total credits in its bank account as well as cash deposits including demonetization cash deposit of Rs.1,84,63,232/-, but the assessee could not explain the same with proper supporting documents. Thereafter, a show- cause notice was issued to the assessee asking why total credits of Rs.1,84,63,232/- in its bank account should not be treated as unexplained money under section 69A of the Income Tax Act and should not be taxed under section 115BBE of the Act @ 60% on Rs.1,84,63,232/-. Getting no response from the side of assessee, the ld. Assessing Officer assessed the total income of the assessee at Rs.1,84,63,232/-. On being aggrieved, the assessee preferred (A.Y. 2017-2018) Boutique De Fleur an appeal before the ld. CIT(Appeals) with a delay of 166 days. But the Ld. CIT (Appeals) without taking into consideration of the same simply dismissed the Appeal filed by the assessee saying that “since the inordinate delay in filing the appeal has not been condoned, consequently the appeal of the appellant becomes non- est and therefore the same is not admitted.”.
On being aggrieved, the assessee preferred an appeal before the ITAT. None appeared on behalf of the assessee at the time of hearing. Therefore, we have decided to dispose of the appeal after hearing the ld. Departmental Representative and perusing the material available on record.
It was the submission of the ld. Departmental Representative that sufficient opportunity was being provided to the assessee. The ld. CIT(Appeals) did not condone the delay on the ground that there was no sufficient cause for condonation of the delay in filing of the appeal as well as negligent attitude on the part of the appellant. The ld. D.R. pleaded to uphold the order of ld. CIT(Appeals).
We have perused the material available on record. By considering the totality of the facts and circumstances of the case, we are inclined to condone the delay. Therefore, in order to ensure the principle of natural justice, we are of the view that it is a fit case to provide one more opportunity to the assessee to decide the case on merit. Therefore, we remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of the appeal without any inference on the observations of earlier order passed by him and (A.Y. 2017-2018) Boutique De Fleur to decide the issue afresh on merit. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee in the appeal is allowed for statistical purposes.