Loading judgment…
Facts
The assessee, a daily wage earner, failed to file his Income Tax Return for AY 2017-18. The Assessing Officer (AO) made additions based on cash deposits during demonetization and interest income. The CIT(A) dismissed the appeal for lack of proper opportunity.
Held
The Tribunal condoned the delay in filing the appeal, acknowledging the assessee's illiteracy and lack of prior experience with tax proceedings. It set aside the CIT(A)'s order and restored the issue to the AO for a fresh assessment on merits after providing an opportunity to the assessee.
Key Issues
Whether the assessee was denied sufficient opportunity to present evidence before the Revenue Authorities, and if so, whether a fresh opportunity should be granted for fresh adjudication.
Sections Cited
69A, 144, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: SHRI K. NARASIMHA CHARY & SHRI MADHUSUDAN SAWDIA
(निर्धारण वर्ा/Assessment Year:2017-18) Prabhakar Shanigarapu, Income Tax Officer, Vs. Warangal. Ward-1, Warangal. PAN:DGKPS6978C (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Smt. S. Sandhya, Advocate रधजस्व द्वधरध/Revenue by:: Ms. V. Koteshwaramma, SR-DR सुिवधई की तधरीख/Date of 30/01/2025 hearing: घोर्णध की 14/02/2025 तधरीख/Pronouncement: आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M.: This appeal is filed by Prabhakar Shanigarapu (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), dated 26.10.2023 for the A.Y. 2017-18.
The assessee has raised the following grounds :
“ 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous Botn facts and in law. 2. The learned Commissioner of Income-Tex (Appeals) ought to have provided further opportunity before deciding the appeal parte.
The learned Commissioner of Income Tax (Appeals) ought to have considered the fact that the appellant is a dally wage earner and has no regular employment or regular source of income and that the amount deposited into the bank during demonetisation period is the aggregate figure of wages earned by all the five members of the family namely, the appellant, his wife and three sons who are all the casual labourers and they pooled the money over a period of time and deposited into the bank account of the I.T.Act due to demonetisation of higher value currency by the Govt. of India 4. The learned Commissioner of Income-Tax (Appeals) ought to have Considered the fact that there is no unexplained income derived by the appellant herein and the provisions of Sce.69A have no application to the facts of the appellant's case. 5. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing Officer in determining the total income at Rs.10,48,086/. 6. Any other ground that may be urged at the time of hearing.” 3. At the outset, it is seen that there was delay of 376 days in filing of this appeal, for which the condonation petition along with affidavit explaining the reasons for the delay has been submitted by the assessee. The Ld. AR submitted that, the assessee is illiterate and work as a daily labour on casual basis. The assessee had never taxable income and was not used to the income tax proceedings. The assessee did not come to know about the notices issued by the Ld. CIT(A) as well as the order passed by the Ld. CIT(A). When the assessee got one message on 27.12.2024 regarding the Direct Tax Vivad Se Vishwas Scheme, 2024 (“DTVSV,2024”), the assessee approached one tax consultant and then only he came to know about the order of Ld. CIT(A). As soon as he came to know about the same, he took initiation to file the appeal before the ITAT and during this process, the delay of 376 days has happened. Accordingly, the delay caused in filing the appeal before the ITAT is not intentional and was only due to the reason beyond the control of the assessee. Therefore, the Ld. AR prayed before the bench to condone the delay.
Per contra, the Learned Department Representative (“Ld. DR”) objected for condonation of the delay and prayed before the bench to dismiss the appeal of the assessee.
We have heard the rival contentions and also gone through the record in the light of the submissions made on either side. On going through the facts and circumstances of the case, we are of the opinion that the assessee has reasonable cause for delay in filing the appeal before the ITAT, hence the delay is condoned. Now the appeal is taken up for adjudication.
The brief facts of the case are that the assessee had not filed any Return of Income (“ROI”) for the A.Y. 2017-18. However, on the basis of data analytics and information gathered during the phase of online verification under operation clean money, the income tax department gathered a list of assessees who have cash in bank account during the demonetization period (09.11.2016 to 30.11.2016), but not filed income tax return for A.Y. 2017-18. From the data, the Ld. AO found that the assessee has deposited cash of Rs.10 lakhs in his bank account during the demonetization period. Accordingly, the Ld. AO issued notice to the assessee for getting explanation qua the deposit of Rs.10 lakhs in bank account during the demonetization period. However, no response was submitted by the assessee. Further, the Ld. AO found from the bank statement of the assessee that, in addition to cash deposit of Rs.10 lakhs, there was a credit of Rs.63/- in the bank account. Acordingly, the Ld. AO again called for the explanation from the assessee qua total credit of Rs.10,00,063/- in her bank account. However, the assessee did not respond to the said notice of the Ld. AO. Consequently, the Ld. AO made the addition of Rs.10,00,063/- u/s.69A of the Act in the hands of the assessee. The Ld. AO also found from Form 26AS of the assessee that there was interest income of Rs.48,023/-. Accordingly, he added Rs.48,023/- also in the hands of the assessee and completed the assessment u/s.144 of the Act on 17.12.2019 assessing the total income of the assessee at Rs.10,48,086/- . Before the Ld. CIT(A) the assessee could responded to the notices issued by the Ld. CIT(A). Consequently the Ld. CIT(A) dismissed the appeal of the assessee.
Feeling aggrieved with the order of Ld. CIT(A), the assessee is now in appeal before us, contending that both the Revenue Authorities did not provide sufficient opportunity to the assessee to submit their explanations/evidence in support of the additions made by the Ld. AO. It is further contended that both the Revenue Authorities have passed the order without providing proper opportunity. The Ld. AR further submitted that the assessee does not stand to gain by allowing the appeal to be disposed of without any documentary evidence being produced and it is only due to the reasons beyond the control of the assessee, the assessee could prosecute his case before both the Revenue Authorities. By consolidating all the grounds, he further submitted that given an opportunity, the assessee is now ready to produce all such details and conduct the proceedings diligently and get the matter disposed of on merits.
Per contra, Ld. DR placed heavy reliance on the orders of the Revenue authorities and submitted that, sufficient opportunity has already been given by the Revenue authorities, but the assessee failed to avail the same. He opposed the grant of further opportunity to the assessee.
We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. It could be seen from the orders of both the Revenue Authorities that in spite of many opportunities given, the assessee failed to prosecute his case on merits. It is a fact that the assessee does not stand to gain by not producing the necessary information/documents and prosecute his case on merits. Be that as it may, now the assessee is ready to produce all information/documents and get the matter disposed of on merits. The highest that would happen by allowing an opportunity to the assessee is that a cause would be decided on merits. With this view of the matter and considering the principle of natural justice, we are of the view that fresh opportunity should be given to the assessee. Accordingly, we set aside the impugned order and restore the issue to the file of the Ld. AO for passing a fresh order on merits after affording the opportunity of hearing to the assessee. Grounds of appeal
are answered accordingly.
10. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 14th Feb., 2025.