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Facts
The assessee challenged the CIT(A)'s confirmation of an addition for unexplained cash deposits, citing a nephew's kidney treatment requiring frequent cash withdrawals and redeposits. The appeal was filed with a 1241-day delay, attributed to a change in the appellate system (faceless regime), an absent accountant, and the assessee's relocation, with knowledge of the order only upon recovery efforts.
Held
The Tribunal condoned the delay, finding sufficient justification. It held that the assessee's explanation for cash deposits, primarily being redeposits of prior withdrawals for medical emergencies and some small loans, was plausible and disregarded by lower authorities. The impugned addition was, therefore, ordered to be deleted.
Key Issues
Condonation of delay in filing the appeal and the validity of the addition made on account of unexplained cash deposits in the assessee's bank account.
Sections Cited
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: Shri Sanjay Garg
सुनवाई की तारीख/Date of Hearing : 16/12/2025 घोषणा की तारीख /Date of Pronouncement: 22/12/2025 आदेश/O R D E R The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 15/12/2021 for Assessment Year (AY) 2011-12.
The appeal is time-barred by 1241 days. A separate application for condonation of delay has been filed in the shape of an Affidavit, wherein, it has been deposed by the assessee that the assessee was a Government employee and had appointed one Accountant, namely, Shri Sulabh Padshah to look into his income-tax appeal before the Ld. CIT(A). That the assessee had provided Ismail Nurmahmad Sipai Vs. The ITO Ward-3 Asst. Year: 2011-12 2 all the details and documents, which the said Accountant had also furnished before the Ld. CIT(A). In the meantime, there were substantial changes/amendments relating to the assessment/appellate authorities and procedure thereof and, hence, the appeal of the assessee which was filed physically, was transferred to faceless regime. It has been pleaded that the assessee, thereafter, contacted his Accountant many a times, however, he informed that since the appeal has been shifted to new regime, therefore, the notice will be received from National Faceless Appeal Centre (NFAC) and before that nothing can be said about the status of his appeal. It has been further pleaded that, in the meantime, the assessee got voluntary retirement from the service and shifted to his native place. The Accountant of the assessee, in the meantime, has also permanently shifted to Dubai. Under the circumstances, the assessee was not aware of the appellate proceedings before NFAC. It has been further pleaded that the assessee did not receive the copy of the order of the Ld. CIT(A) either physically or through email, if any, which might have been sent on the email id of by his earlier accountant, who had permanently shifted abroad. That the assessee came to know about the passing of the appellate order only when the Department approached him for recovery of the tax amount. It has been submitted that, thereafter, the assessee immediately consulted a new Accountant/AR to immediately file the appeal before this Tribunal.
Considering the above submission, I find that there is justification on the part of the assessee for the delay occurred in filing the appeal. The delay in filing the appeal is, therefore, condoned. Ismail Nurmahmad Sipai Vs. The ITO Ward-3 Asst. Year: 2011-12 3 4. The assessee, in this appeal, has contested against the action of the Ld. CIT(A) in confirming the addition of Rs.10,30,600/- out of total addition made by the AO of Rs.14,02,600/- on account of unexplained cash deposits in the bank account of the assessee.
The Ld. AR of the assessee has demonstrated before me that the assessee had duly furnished the relevant details and evidences before the lower authorities to show the source of the deposits. The Ld. AR of the assessee has submitted that the nephew of the assessee had got kidney problem and he required transplantation of the same. For that purpose, the assessee and his family members had to keep cash readily available with them. He has submitted that some of the cash amounting to Rs.4 lakhs was arranged through past savings as well as by taking loans from relatives and friends. That, the remaining amount of Rs.10 lakhs was nothing, but, out of cash withdrawals from the bank account of the assessee from time-to-time. The Ld. AR of the assessee has invited my attention to page No.7 of the paper-book to show that during the period from 01/04/2010 to 31/03/2011, in every month, there were cash withdrawals and redeposits in the bank account of the assessee. The assessee, who has personally come to present before this Tribunal, in this respect has explained that the assessee and his family members had to take his nephew to the concerned doctor/hospital for transplant/treatment of kidney and for which they would withdraw the cash from the bank and if the hospital could not arrange for transplantation of kidney, the assessee would redeposit the cash amount in his bank account. The Ld.AR has invited my attention to the entry for the August-2010 during which an amount of Rs.4.39 lakhs was debited and amount of Rs.3.57 lakhs was redeposited. He has similarly demonstrated about the other entries and has further submitted that during Ismail Nurmahmad Sipai Vs. The ITO Ward-3 Asst. Year: 2011-12 some months, the deposited amount was more than the withdrawal which was out of small cash loans received by the assessee. I find that neither the AO nor the Ld. CIT(A) has discussed these aspects. The AO has taken note of only for credit entries and he has totally ignored the fact that major amount was redeposited by the assessee out of cash withdrawals. The assessee has also given plausible reason for withdrawal and redeposit made regularly by him. Considering the above submissions, I do not find any justification on the part of the lower authorities in making/confirming the impugned addition and the same is, accordingly, ordered to be deleted.