ABDUL RAUF GANI GHONE,PUNE vs. INCOME TAX OFFICER, WARD 14(3), PUNE

The AO has erred in making additions of Rs. 40,85,070/- on account of cash deposits in the demonetization period, by treating as unexplained money u/s 69.A because the appellant could not make appropriate explanation and submissions as he was not served with any notices and hence this unjustified addition has become arbitrary.

The AO has treated the alleged cash deposits as unexplained because the appellant could not explain the details. The appellant deserves a reasonable opportunity to present the merits of his case with credible evidence and sustainable explanations, for getting justice and fair play. Hence, he should be allowed to submit all evidence.

The AO has erred in completing the assessment u/s 144 as ex-parte without applying the fundamental background of the appellant having a business of retail selling of mutton and chicken, where cash sales are most likely to happen and accordingly cash deposits are natural. It is thus not the best judgment assessment with the reasonability of facts.

The Appellant Craves Leave to add, Alter or amend any of the Grounds of the Appeal, before or in the course of hearing of the Appeal.”

Ld.AR for the assessee filed a paper book. Ld.AR submitted that the Ld.CIT(A) has dismissed the appeal filed by assessee on the ground of delay. Ld.AR also submitted that the Ld.CIT(A) has incorrectly mentioned that there was delay of 1025 days. Ld.AR took us through a Chart to demonstrate the calculation of delay. Ld.AR submitted that Covid-19 Period should be excluded as held

1 Ld.AR invited our attention to Affidavit filed by assessee which is at 98 to 104 of the paper book. Ld.AR also read out the Affidavit of the Authorised Representative.

2 Ld.AR submitted that in the Assessment Order the addition was made of Rs.40,85,070 and Total Income as per Assessment Order was Rs.45,81,010/-. However, the demand raised was Rs.1,78,10,321/- which was inconsistent with the Assessed income. Therefore, the assessee filed an application for rectification before the AO. Ld.AR submitted that due to abnormal demand raised by the AO it was not possible to file appeal before the ld.CIT(A) immediately as the Assessee thought that AO will pass a rectification order.

3 Ld.AR submitted that for the above discussed reasons there was delay in filling appeal before CIT(A). Ld.AR submitted that ITA No.1052/PUN/2025 [A]

Ld.DR for the Revenue relied on the order of Assessing Officer(AO) and ld.CIT(A).

We have heard both the parties and perused the records. As per the Assessment Order the assessee had filed Return of Income for A.Y.2017-18 on 14/03/2018 declaring total income of Rs.4,95,940/-. The Assessee is running a Chicken Shop at Kondwa, near Pune. Assessee’s case was selected for scrutiny based on the information that assessee had deposited cash of Rs.40,85,070/- in bank account. The Assessing Officer(AO) noted that assessee failed to file any submission, hence AO made addition of Rs.40,85,070/- and assessed the Total Income at Rs.45,81,010/-. Aggrieved by the Assessment Order the assessee filed Appeal before the Ld.CIT(A).

1 The Ld.CIT(A) dismissed the appeal of the Assessee on the ground of delay without adjudicating grounds of appeal raised by the ITA No.1052/PUN/2025 [A]

2 We have perused the Condonation Petition filed by the Assessee before the Ld.CIT(A). It is observed that Ld.CIT(A) has mentioned that there was delay of 1025 days, however, this fact is incorrect. Ld.CIT(A) has not calculated the days from the date of the Assessment Order. The Ld.CIT(A) has calculated the period from 11/11/2019 as inadvertently the Assessee has mentioned Date of Assessment Order as 11/11/2019, where as we have perused the Assessment Order and noted that Date of Assessment Order is 07/12/2019. The Assessee has claimed that he received Assessment Order on 01/04/2020. 4.3 Be it as it may be, the most important fact in this case is that the AO though assessed the Total Income at Rs. 45,81,010/- but issued Demand Notice for Rs.1,78,10,321/-

We specifically asked the Ld.DR to explain us how there can be a tax liability of Rs.1,78,10,321/- when assessed income was only Rs.45,81,010/-. The Ld.DR for the Revenue could not answer. It is noted that subsequently, in response to Rectification Application

1 Thus, it is noted that assessee was pursuing 154 application.

2 Also, one needs to remove the Covid-19 period from 15.03.2020 till 28.02.2022 in calculating the Total Dealy as per the Order of Hon’ble Supreme Court in Miscellaneous Application No.21 of 2022 in SUO MOTU Writ Petition (C) No.3 of 2020 dated 10/01/2022. 6. In these facts and circumstances of the case, we are convinced that there was sufficient and valid reason for delay. The substantial justice is more important than procedural delay.

In these facts and circumstances of the case, we direct the Ld.CIT(A) to condone the delay in filling appeal and decide the appeal on merits. Therefore, we set-aside the order of the Ld.CIT(A) to Ld.CIT(A) for de-novo adjudication. Ld.CIT(A) shall provide opportunity to the assessee to file all the details. Accordingly,

In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 30 July, 2025. MS.ASTHA CHANDRA