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Facts
The assessee, a credit cooperative society, failed to file its return of income for AY 2017-18. Based on SFT information regarding cash deposits during demonetization, the AO completed a best judgment assessment u/s 144, making an addition of Rs. 23,72,000/- as unexplained money u/s 69A.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A) by the assessee, considering that the circumstances leading to the delay were beyond the assessee's control and in the interest of natural justice. The matter was remitted to the CIT(A)/NFAC for denovo adjudication.
Key Issues
Whether the delay in filing appeal before the CIT(A) should be condoned and if the appeal should be remitted for denovo adjudication on merits.
Sections Cited
139(1), 142(1), 133(6), 144, 69A, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD & MS. ASTHA CHANDRA
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee relating to A.Y. 2017-18 is directed against the order dated 05.11.2024 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) which inturn is arising out of the Assessment order dated 20.12.2019 passed u/s.144 of the Act.
Briefly stated, the facts of the case are that the assessee is stated to be a credit Cooperative Society engaged in the business of accepting deposits and providing credit facilities to its members. It has not filed the return of income for the A.Y. 2017- 18 under the provisions of section 139(1) of the Act. Based on the information available in Statement of Financial Transactions (SFT) that assessee has deposited cash during the demonetization period to the tune of Rs.25,95,910/- in the bank account maintained with Sindhudurg District Central Co.op Ltd., Kharepatan, notice u/s.142(1) of the Act to the assessee calling for the details. Since there was no response to such notice from the side of the assessee, the AO completed the best judgment assessment u/s.144 of the Act after obtaining the information from the bank by issuance of notice u/s.133(6) of the Act, thereby making addition of Rs.23,72,000/- as unexplained money u/s.69A of the Act.
Aggrieved assessee preferred appeal before the ld.CIT(A) with a delay of about 9 months. The ld.CIT(A) dismissed the appeal in limine by not condoning the delay
Now the assessee is in appeal before the Tribunal.
At the outset, Ld. Counsel for the assessee submitted that the appeal was time barred by about nine months before the CIT(A) excluding the covid-19 pandemic outbreak. It is submitted that the Secretary of the assessee society neither informed the Board of Directors nor to the Auditors of the Society about the income-tax proceedings and the assessee was unaware of the notices which it could not comply and which resulted in passing the assessment order exparte u/s.144 of the Act. The circumstances are beyond the control of the assessee. Therefore, it is prayed that the delay before the CIT(A) may be condoned and the assessee may be given an opportunity to represent its case before the authorities as the assessee is in a position to substantiate its case.
Having given our thoughtful consideration to the submissions made by the Ld. Counsel for the assessee and the facts of the case, we are of the opinion that larger interest of justice has to be taken into consideration while adjudicating the matters. None should be deprived of an adjudication on merits unless the Court of law or the Tribunal/Appellate Authority finds that the litigant has deliberately and intentionally delayed filing of the appeal, that he is careless, negligent and his conduct is lacking in bonafides. Further, the assessee would not have gained anything in filing the appeal with delay. Therefore, the delay of about nine months occurred before the ld.CIT(A) is condoned in light of various decisions including that of decision of Hon’ble Supreme Court in the case of Collector Land Acquisition Vs. MST Katiji and others 167 ITR 471.
Coming to merits of the issue, we observe that the assessment order in this case was completed exparte u/s.144 of the Act and the ld.CIT(A) dismissed in the appeal of the assessee in limine without condoning the delay. Considering the facts in entirety and the submissions made by the Ld. Counsel for the assessee in the interest of natural justice, we are of the opinion that one more opportunity needs to be given to the assessee for representing its case before the ld.CIT(A)/NFAC. In view thereof, without dwelling into merits of the issue, the issues on merits are being remitted to the file of ld.CIT(A)/NFAC for denovo adjudication. The assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the ld.CIT(A)/NFAC shall be free to proceed in accordance with law. Assessee is directed to provide proper email-id to the department for receiving notices through ITBA portal. Finding of the ld.CIT(A)/NFAC is set aside and Grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 05th day of March, 2025.