Loading judgment…
Facts
The assessee, an individual farmer, did not file an income tax return for AY 2015-16. The Assessing Officer (AO) issued a notice under Section 148, as information suggested escaped income. During proceedings, it was noted the assessee deposited Rs. 43,44,000/- in bank accounts. The AO treated these deposits as unexplained and made an addition to the total income.
Held
The Tribunal noted that the CIT(A)/NFAC dismissed the assessee's appeal due to a delay, without condoning it. The Tribunal found a reasonable cause for the delay and condoned it, setting aside the CIT(A)'s order. The issues were remitted to the CIT(A)/NFAC for de-novo adjudication.
Key Issues
Whether the delay in filing the appeal before the CIT(A)/NFAC was justifiable, and if so, whether the appeal should be heard on merits.
Sections Cited
250, 147, 144B, 148, 142(1), 10(1), 69A, 115BBE, 271(1)(c), 250(6)
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
आदेश / ORDER
The captioned appeal at the instance of assessee pertaining to A.Y. 2015-16 is directed against the order dated 17.04.2025 of National Faceless Appeal Centre(NFAC), Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 17.01.2024 passed u/s.147 r.w.s144B of the Act.
Succinctly stated, facts of the case are that the assessee is an individual and has not filed by return of income for the year under consideration. Based on the information that income chargeable to tax has escaped assessment, notice u/s.148 of the Act was issued to the assessee. In the course of proceedings, Ld. Assessing Officer noticed that assessee has deposited following amounts :
1. IDBI Bank Ltd. - Rs.28,44,000/- 2. Vidarbha Konkan Gramin Bank – Rs.10.00 lakh 3. Vidarbha Konkan Gramin Bank – Time deposit of Rs.5.00 lakh
In compliance to notice u/s.142(1) of the Act, assessee submitted that he is a small farmer engaged in agricultural activities. He does not have any taxable income and the agricultural income is exempt u/s.10(1) of the Act. The source of alleged cash deposit is from sale of agricultural produce in cash viz., sugarcane, vegetables etc. In support, assessee has submitted the bank statements, bills, landholding and crop details. It is also stated that he has availed loans from banks and from family members. However, despite reproducing the submissions made by the assessee which was along with supporting documents to substantiate the claim, ld. AO vide order dated 17.01.2024 concluded the assessment holding that assessee failed to offer any explanation regarding the nature and source, thereby made addition of Rs.43,44,000/- as unexplained. Finding of ld.AO reads as under:
“3.5 Conclusion drawn In view of the above facts, the following additions are made to the total income of the assessee- Information available with the Department and submission made by the assessee has been verified and it is noticed that the assessee has deposited cash in bank account maintained with IDBI Bank Limited of Rs. 28,44,000/-, has deposited cash in saving bank account of Rs. 10,00,000/- in Vidarbha Konkan Gramın Bank and made time deposit of Rs 5,00,000/- in Vidharbha Konkan Gramin Bank. During the assessment proceedings, assessee has failed to furnish the source of such deposits in bank account as the assessee has furnished the bills of sale of sugarcane which are not relevant to A.Y.2015-16. Further, the assessee has failed to furnish the any other supporting evidences in support of his contention. In the light of the above discussions, cash deposits made by the assessee in his bank account maintained IDBI Bank Limited of Rs. 28,44,000/-, cash deposited in saving bank account of Rs. 10,00,000/- in Vidarbha Konkan Gramin Bank and time deposit made of Rs. 5,00,000/- in Vidharbha Konkan Gramin Bank remained unexplained since the assessee failed to offer any explanation regarding the nature and source. Thus, the assessee is found to be the owner of the money pertaining to cash deposit and time deposits in his bank accounts during the year under consideration, as the nature and source of which remained unexplained. Therefore, the cash Deposits and time deposits made by the assessee in his bank accounts of Rs.43,44,000/- is treated as unexplained money u/s.69A r.w.s. 115BBE of the Act and added to the total income of the assessee. Further, penalty proceedings u/s 271(1(c) of the Act is being initiated separately for concealment of income.”
Aggrieved assessee preferred appeal before ld.CIT(A)/NFAC but with a delay of 382 days. Ld.CIT(A)/NFAC dismissed the appeal of the assessee in limine without condoning the delay. Now the assessee is in appeal before this Tribunal.
I have heard the rival contentions and perused the record placed before me. A perusal of the impugned order reveals that ld.CIT(A)/NFAC has dismissed the appeal of the assessee in- limine as barred by limitation. Assessee has furnished the reason for delay in filing the appeal which reads as follows :
“Reason for Delay: Medical Reasons of my family: my nephew was admitted to the hospital in February. He is continuously going under the treatment congenital adrenal hyper plasia with actute gastroenteritis. Still he is going under medical treatment with Dr. Khadilkar in Phadke Hospital in Pune Lack of awareness And Misinterpretation of tax provisions; I am farmer By profession So I Have never filed income Tax Returns. I have education up to 12th Standards so I am not aware about income tax Act and appeal procedure. After receiving Physical Order Copy | Appointed Professional for handling this matter. I have submitted all the documents with him. He replied to all the notices I was not aware about the order passed by Department. The delay in filing the appeal is purely unintentional and beyond my control, and I sincerely request you to condone this delay in the interest of justice. The appeal is filed with all necessary documents and a copy of the assessment order. In light of the above, I kindly request your good office to condone the delay and allow my appeal to be heard on merits.”
On going through the averments made by the assessee, I am of the view that due to ‘reasonable cause’ assessee failed to file the appeal within the stipulated time.
The appellate remedy or forum is created by the statute is to rest the dispute and not to accelerate for higher forum perfunctorily. I would like to refer the judgment of Hon’ble Supreme Court in the case of Raheem Shah & ANR Vs Govind Singh & Ors [CIVIL APPEAL No.4628 OF 2023, dated 24.07.2023], wherein the Hon’ble Apex Court while dealing with tax litigation, held that the Ld.CIT(A)/NFAC being a quasi- judicial authority was expected to adopt justice oriented approach rather resorting to iron-cast technical one however the Ld.CIT(A)/NFAC came to dismiss the appeal of the assessee in limine on the ground of delay without even according a fair opportunity of hearing. Having regard to the facts of the instant case, ld.CIT(A) ought to have condoned the delay by virtue of judgments of Hon’ble Supreme Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382). I therefore condone the delay of 382 days in filing of appeal before ld.CIT(A).
Considering the totality of facts and in all fairness the assessee is entitled to a fair opportunity. In view of this, without offering any comments on merits of the case, I deem it fit to set-aside the impugned order and remit all the issues to the file of Ld.CIT(A)/NFAC for de-novo adjudication and pass a speaking order in terms of provisions of section 250(6) of the Act. Assessee is at liberty to adduce all the requisite documents to substantiate the nature and source of the alleged cash deposit. Assessee is directed to update email id and contact detail on ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and the effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 14th day of July, 2025.