SRINIVASA RAO PALABHATLA,HYDERABAD vs. ITO., WARD-7(1), HYDERABAD

We have considered the submissions of both sides and examined the material available on record. It is observed from the computation of income (page nos. 2 & 3 of the paper book) that the assessee has not been carrying out any independent business activity and the only income shown under the head business income is the share of interest income received from a partnership firm. Thus, the objection of the Ld. DR with respect to business continuity is not factually correct. Further, the medical documents placed on record clearly show that the assessee is a senior citizen suffering from multiple age-related ailments requiring regular medical attention. The explanation for delay is reasonable, consistent and supported by documents. In such circumstances, denying condonation would amount to defeating the ends of substantial justice. Considering the advanced age of the assessee and his continuous medical illness, we are inclined to take a lenient and compassionate view. Therefore, we hold that the assessee has shown sufficient cause for the delay. However, to balance the interests of justice, we deem it appropriate to impose nominal cost. Therefore, the delay of 571 days in filing the appeal is hereby condoned, subject to payment of cost of Rs.5,000/- (Rupees Five Thousands only) to the Prime Minister National Relief Fund, within one month from the date of receipt of this order. Proof of such payment shall be filed before the Registry. Subject to such compliance, the appeal is admitted for adjudication on merits.

The assessee has raised the following grounds of appeal: “1) The order of the learned CIT (A) is erroneous both on facts and in law.

The brief facts of the case are that the assessee is an individual, filed return of income for the Assessment Year 2017-18 on 30.03.2018, declaring total income of Rs.7,93,660/-. The case of the assessee was selected for limited scrutiny under CASS and accordingly notices under section 143(2) and section 142(1) of the Income Tax Act, 1961 (“the Act”) were issued by the Learned Assessing Officer (“Ld. AO”). The assessee furnished copy of the return, computation of total income and bank statement during the assessment proceedings. During the assessment proceedings, the Ld. AO called upon the assessee to explain the source of cash deposits during the year amounting to Rs.13,68,000/- in the bank account maintained with Syndicate Bank. However, the assessee could not explain the source of such deposits to the satisfaction of the Ld. AO. Accordingly, the Ld. AO added Rs.13,68,000/- to the returned income of the assessee and passed the assessment order under section 143(3) of the Act, dated 09.12.2019, determining total income of the assessee at Rs.21,61,660/-.

Aggrieved with the order of the Ld. AO, the assessee filed appeal before the Ld. CIT(A). However, in the absence of submission of supporting documentary evidence, the Ld. CIT(A)

Aggrieved with the order of the Ld. CIT (A), the assessee is now in appeal before this Tribunal. The Ld. AR submitted that the assessee could not furnish necessary details before the lower authorities, due to which the addition was made. It was submitted that the assessee is now willing to file the required documentary evidence and explain the source of the cash deposits before the Ld. AO. Therefore, in the interest of justice, one more opportunity may be granted to the assessee to present the case on merits before the Ld. AO.

Per contra, the Ld. DR opposed the remand and submitted that sufficient opportunities had already been granted at earlier stages and the assessee failed to avail the same. Therefore, no further opportunity may be granted to the assessee.

We have considered the rival submissions and examined the material available on record. We observe that the addition has been sustained primarily on the ground that the assessee did not furnish supporting evidence before the lower authorities. The assessee now seeks to furnish such evidence and explain the source of cash deposits. In view of the principle that matters should be decided on merits rather than on technical lapses, we are of the view that one more opportunity deserves to be provided to the assessee. Therefore, in the interest of justice, we deem it appropriate to restore the matter to the file of the Ld. AO for denovo adjudication. Accordingly, the matter is restored to the file of the Ld. AO with a direction to provide adequate opportunity of being heard to the assessee, examine the Page 5 of 6 explanations, documents and evidence that the assessee may file in support of the source of cash deposits and pass a reasoned and speaking order in accordance with law. The assessee shall be at liberty to file any additional evidence and submissions before the Ld. AO. The assessee is also directed to cooperate in the proceedings and not to seek unnecessary adjournments.

In the result, the appeal of the assessee is allowed for statistical purposes.