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Facts
The assessee, a co-operative credit society, deposited Rs.1.23 crore in cash and failed to explain its source during assessment, leading to an addition under Section 69A. Its appeal to the CIT(A) was dismissed due to a 774-day delay, which the CIT(A) refused to condone. The assessee argued that being in a remote area, its office bearers were not tech-savvy and relied on a consultant who failed to inform them of hearing notices.
Held
The Tribunal, emphasizing substantial justice over technicalities and citing Supreme Court judgments, set aside the CIT(A)'s order. It condoned the delay and remanded the quantum appeals for fresh adjudication on merits, subject to the assessee paying a cost of Rs.10,000 and cooperating with future proceedings. Consequentially, the penalty appeal was also set aside and remanded for fresh adjudication.
Key Issues
Whether the significant delay (774 days) in filing the appeal before the CIT(A) should be condoned to allow for an adjudication on the merits of the unexplained cash deposits and the consequential penalty.
Sections Cited
69A, 142(1), 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
ORDER PER VINAY BHAMORE, JM: These appeals filed by the assessee are directed against the separate orders dated 24.07.2024 and 25.07.2024 passed by Ld. CIT(A)/NFAC for the assessment years 2016-17 and 2019-20 respectively. 2. Since identical facts and common issues are involved in all the above captioned three appeals of the assessee, therefore, we proceed to dispose of the same by this common order.
1820 & 1824/PUN/2024 3. First, we shall take up the appeal of the assessee in for assessment year 2016-17 as the lead case for adjudication. ITA No.1819/PUN/2024, A.Y. 2016-17 : 4. The appellant has raised the following grounds of appeal :-
1. On the facts and circumstances of the case and in law the CIT(A), NFAC erred in not condoning the delay in filing the appeal not accepting the explanation given by the appellant in this regard.
2. On the facts and circumstances of the case and in law the CIT(A), NFAC erred in confirming the following addition made by the Income Tax Officer, NAFC, Delhi (hereinafter referred to as the TTO): a. Cash deposits in A/c No.066 Rs.1,23,00,000 The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing.”
5. Facts of the case, in brief, are that the assessee is a co-operative credit society and has not furnished its return of income. During the year under consideration, the assessee had made cash deposit of Rs.1,23,00,000/- into its Savings Bank Account maintained with Kallappanna Awade Ichalkaranji Janata Sah Bank Ltd. During the course of assessment proceedings, the information was called for by issuing notice u/s 142(1) / show cause notice along with questionnaire and the assessee was requested to explain the transaction. However, the assessee did not 1820 & 1824/PUN/2024 reply to the above notices. Therefore, the said unexplained cash deposit of Rs.1,23,00,000/- deposited in the bank accounts was brought to tax u/s 69A of the IT Act determining the assessee's total income at Rs.1,23,00,000/-.
6. Since the appeal before Ld. CIT(A)/NFAC was filed belatedly i.e. with a delay of 774 days and the explanation of delay furnished by the assessee was not found satisfactory, Ld. CIT(A)/NFAC dismissed the appeal by holding the same as inadmissible. It is this order against which the assessee is in appeal before this Tribunal.
7. Ld. AR appearing from the side of the assessee submitted before us that the order passed by Ld. CIT(A)/NFAC is unjustified. Ld. AR further submitted that Ld. CIT(A)/NFAC ought to have considered the explanation offered by the assessee wherein it was made clear that the assessee credit cooperative society is situated in remote area and the office bearers are not well versed with the technology. Apart from above, it was also submitted that the consultant has given his e-mail ID and after receiving notices he never informed to the assessee regarding notices of hearing. Ld. AR relied on the judgement of Hon’ble Supreme Court in the case of Inder Singh vs. State of Madhya Pradesh in SLP No.6145 of 2024 dated 21.03.2025 in this regard. Ld. AR also relied on the 1820 & 1824/PUN/2024 decision of Hon’ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors., 167 ITR 471 (SC). Accordingly, Ld. AR requested before the Bench to set-aside the order passed by Ld. CIT(A)/NFAC and further requested to direct him to condone the delay and decide the appeal on merits of the case.
8. Ld. DR appearing from the side of the Revenue relied on the orders passed by the subordinate authorities and requested to confirm the same.
We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book and case laws. In this regard, we find that admittedly, there was delay of 774 days in filing the appeal before Ld. CIT(A)/NFAC. It was the only contention of Ld. AR that in the light of Hon’ble Apex Court judgement cited (supra) liberal approach should be taken in condoning the delay when the limitation ground undermines the merits of the case and obstructs substantial justice. In the instant case in hand, we find merit in the argument of the Ld. Counsel for the assessee that the assessee credit cooperative society is situated in remote village area and the office bearers are not friendly with the technology and solely relied/dependent on the tax consultant who failed to inform about the date of hearing to the assessee 1820 & 1824/PUN/2024 credit cooperative society. In support of these contentions, a separate affidavit duly sworn in by the chairman of the assessee credit cooperative society is also furnished before the Bench.
We find the Hon’ble Supreme Court in the case of Inder Singh (supra) while condoning the delay has held as under :- “14. There can be no quarrel on the settled principle of law that delay cannot be condoned without sufficient case, but a major aspect which has to be kept in mind is that, if in a particular case, the merits have to be examined. It should not be scuttled merely on the basis of limitation.”
We find the Hon'ble Supreme Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (supra) has held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties.
Respectfully following the above decisions cited (supra), we deem it appropriate to set-aside the impugned order passed by Ld. CIT(A)/NFAC and restore the matter back to him with a direction 1820 & 1824/PUN/2024 to condone the delay and decide the appeal afresh on merits of the case as per fact and law after providing reasonable opportunity of hearing to the assessee. At the same time, because of the careless attitude of the assessee, we levy a cost of Rs.10,000/- to be deposited within 30 days from receipt of this order, failing which the order of Ld. CIT will remain as it is. The assessee is also hereby directed to respond to the notices issued by Ld. CIT(A)/NFAC in this regard and produce requisite documents/ additional evidences/explanations in support of grounds of appeal
without taking any adjournment under any pretext, otherwise Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. Thus, the grounds of appeal raised by the assessee are partly allowed.
13. In the result, the appeal filed by the assessee in for A.Y. 2016-17 is allowed for statistical purposes. ITA No.1824/PUN/2024, A.Y. 2019-20 :
14. Since the facts and issues involved in above appeal of the assessee are identical, therefore, our decision in for A.Y. 2016-17 shall apply mutatis mutandis 1820 & 1824/PUN/2024 to the above appeal of the assessee in ITA No.1824/PUN/2024 for A.Y. 2019-20.
15. In the result, the appeal of the assessee in for A.Y. 2019-20 is also allowed for statistical purposes. ITA No.1820 /PUN/2024, A.Y. 2016-17 : 16. In the above appeal assessee has challenged the order of Ld. CIT(A)/NFAC in not condoning the delay and confirmation of penalty u/s 271(1)(c) of the IT Act. Since we have set-aside the quantum appeals of the assessee and remanded the matter back to the file of Ld. CIT(A)/NFAC to decide the appeal afresh, therefore, this being the consequential penalty order also needs to be set- aside and accordingly we set-aside and remand the penalty appeal order back to the file of Ld. CIT(A)/NFAC to decide the penalty appeal afresh by condoning the delay and after providing reasonable opportunity of hearing to the assessee. Thus, the grounds raised by the assessee in the above appeal are partly allowed.
17. In the result, the appeal filed by the assessee in for A.Y. 2016-17 is allowed for statistical purposes.