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Facts
The assessee, an individual, did not file a Return of Income. The Assessing Officer (AO) initiated proceedings based on information about a cash deposit during the demonetization period. The AO assessed the income by estimating it based on the cash deposit, leading to an addition of Rs. 4,02,341/- as undisclosed income.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A) and the delay before the Tribunal. It held that the CIT(A) ought to have condoned the delay and decided the appeal on merits. The matter is remanded to the CIT(A) for de novo consideration.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal in limine without condoning the delay, and whether the assessee should be granted another opportunity to present their case on merits.
Sections Cited
139, 142(1), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘SMC’ Bench, Hyderabad
Before: SHRI INTURI RAMA RAO
(निर्धारण वर्ा/Assessment Year:2017-18) Shri Veeraballi Naga Basi Reddy, Income Tax Officer, Vs. Ward 1, Kadapa. Kadapa. PAN: ASZPR1589G (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Shri K.A. Sai Prasad, C.A. रधजस् व द्वधरध/Revenue by: Dr. Sachin Kumar, DR सुिवधई की तधरीख/Date of hearing: 06/10/2025 घोर्णध की तधरीख/Pronouncement: 08/10/2025 आदेश/ORDER This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 31.12.2024 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the assessee is an individual, no Return of Income was filed under the provisions of section 139 of the Income Tax Act, 1961 (“the Act”). Subsequently, based on the information available in ITBA portal, that the assessee had deposited cash of Rs.22,57,800/- in bank account during demonetization period, that the Assessing Officer formed an opinion that income of the had escaped assessment to tax. Accordingly, a notice u/s. 142(1) of the Act was issued to the assessee by the Assessing Officer. The assessee had failed to respond to the notices issued. In the circumstances, the Assessing Officer was constrained to pass a best judgment of assessment u/s.144 of the Act by brining the cash deposits made in the specified bank notes during the demonetization period as unexplained money of the assessee and also assessed income by estimating the income at 3% of the cash deposits of Rs.1,34,11,361/- in the bank account by treating the cash deposits as business receipts from the business of transport and estimated the income at 4% thereon. Accordingly, the Assessing Officer made addition of Rs.4,02,341/- as undisclosed income of the assessee.
Being aggrieved by the order of Assessing Officer, the assessee filed an appeal before the Ld. CIT(A) with a delay of 832 days. The Ld. CIT(A), NFAC, Delhi vide the impugned order without condoning the delay dismissed the appeal of the assessee in limine.
Being aggrieved by the order of Ld. CIT(A), the assessee is in appeal before this Tribunal. The Ld. AR submitted that Ld. CIT(A) dismissed the appeal of the assessee exparte without providing an opportunity of hearing. He further submitted that, the Ld. CIT(A) ought to have decided appeal on merits. Even if the assessee did not appear before the Ld. CIT(A), the Ld. AR submitted that the Ld. CIT(A) has dismissed the appeal without adjudicating the issues on merits. He prayed that one more opportunity be given to the assessee for presenting its case before the Ld. CIT(A) with evidences, in the interest of justice.
The Ld. DR, on the other hand, relied upon the orders of authorities below. He submitted that despite providing various opportunities by the Ld. CIT(A), the assessee did not respond to the notices issued. Therefore, the Ld. CIT(A) has rightly dismissed the appeal of the assessee. He accordingly submitted that the order of Ld. CIT(A) shall be upheld.
I have heard the rival submissions of both the parties. At the outset, I find that there is a delay of 15 days in filing the appeal before the Tribunal. The assessee filed condonation petition seeking condonation of delay on the ground that the delay has occurred on account of Ld. AR being out of station during the period of delay. The assessee also filed an Affidavit from the concerned C.A. I am of the considered opinion that in the absence of any evidence to the contrary, having regard to the explanation rendered in the Affidavit, it is a fit case to condone the delay. Accordingly, the delay is condoned and appeal is taken up for adjudication on merits. 6.1 At the outset, I find that the Ld. CIT(A) refused to condone the delay of 832 days in filing of appeal before him. I find that except the initial period of 30 days, the balance period is covered by Pandemic Covid 19, the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No.3 of 2020 in RE : Cognizance for Extension of Limitation extended period of limitation prescribed under the statute upto June, 2022. In view of the dictum laid down by the Hon'ble Supreme Court in the case of RE : Cognizance for Extension of Limitation (supra), I condone the period of delay in filing the appeal before the Ld. CIT(A). as regards the initial delay of 30 days, it is submitted that the delay occurred on account of the lapses on the part of the C.A. Having regard to the explanation offered before the Ld. CIT(A), I am of the considered opinion that there is a reasonable cause for condonation of delay, CIT(A) ought to have condoned the delay. Accordingly, the matter requires remand to the file of Ld. CIT(A) for de novo consideration on merits after affording sufficient opportunity to the assessee, in accordance with law.
In the result the appeal of the assessee is allowed.
Order pronounced in the open Court on 8th Oct., 2025.