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Facts
The assessee, an agriculturist, filed a delayed appeal (162 days) against an ex-parte order by the CIT(A) which upheld additions made by the AO for AY 2017-18. The AO had made additions under Section 69A for unexplained bank deposits, disallowed expenses, Chapter VIA deduction, and agricultural income, after the assessee failed to comply with statutory notices during assessment and first appeal proceedings.
Held
The Tribunal condoned the delay in filing the appeal, noting it was unintentional due to the consultant's negligence. However, recognizing the assessee's repeated non-compliance before lower authorities, the Tribunal imposed a cost of Rs.10,000/- on the assessee. Subject to the payment of this cost, the matter was set aside to the Assessing Officer to provide a fresh opportunity for the assessee to explain the additions with relevant evidence.
Key Issues
Delay in filing appeal; validity of additions for unexplained bank deposits, disallowance of expenses, Chapter VIA deduction, and agricultural income under Section 69A due to the assessee's non-compliance during assessment and first appellate proceedings.
Sections Cited
144, 143(2), 142(1), 44AD, 69A, Chapter VIA, 143(3)
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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI NARENDRA PRASAD SINHA
O R D E R
PER SHRI NARENDRA PRASAD SINHA, AM:
This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 30.10.2024 for the Assessment Year (A.Y.) 2017-18 in the proceeding under Section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
There was a delay of 162 days in filing of this appeal. The assessee has filed an affidavit explaining the reason for the delay. It is submitted that the assessee is an agriculturist and semi-literate person having no knowledge to check the Income Tax portal for any communication relating (Assessment Year: 2017-18) Ilyasbhai Kasambhai Rathod vs. ITO Page 2 of 7 to the appeal filed by the assessee. It is also submitted that the assessee had given his e-mail id. to his Tax Consultant for receiving the communication from the CIT(A) in the appellate proceedings. However, the Consultant didn’t forward any communication to the assessee. Thereafter, the assessee had approached his Consultant to enquire about the status of the appeal and it was only when the Consultant logged on the Income Tax Portal and found that the CIT(A) had already passed the appellate order on 30.10.2024. Thereafter, he downloaded the order and filed the present appeal. In the process, there was a delay of 162 days. It was submitted that the delay was not intentional. Considering the explanation of the assessee, the delay in filing of this appeal is condoned.
The brief facts of the case are that the assessee had filed his return of income for the A.Y. 2017-18 on 20.02.2018 declaring total income of Rs.3,50,070/-. The case was selected for complete scrutiny through CASS by issuing notice under Section 143(2) of the Act dated 21.09.2018. Thereafter, notices under Section 142(1) of the Act along with Annexure requesting details, were issued on 01.03.2019 & 11.04.2019. However, the assessee didn’t furnish any details. The assessee while filing his return of income under Section 44AD of the Act had shown income from business and other sources. The Assessing Officer found that the assessee had made cash deposits and also credit entries of Rs.74,88,106/- in his two bank accounts. The Assessing Officer was not satisfied with the explanation regarding source of the deposits, as the assessee had shown gross receipt of Rs.20,72,015/- only and the assessee was allowed an opportunity to explain this difference. However, the assessee didn’t avail the opportunity and no explanation was given. The excess credit entries reflected in the bank account of the assessee (Assessment Year: 2017-18) Ilyasbhai Kasambhai Rathod vs. ITO Page 3 of 7 amounting to Rs.54,16,091/- was treated by the Assessing Officer as the unexplained income from undisclosed source under Section 69A of the Act and added to the total income of the assessee. Further, it was also noticed by the Assessing Officer that the assessee had shown total turnover under Section 44AD of the Act to the tune of Rs.20,72,015/- and after claiming expenses of Rs.16,11,736/- the assessee had shown net profit of Rs.4,60,279/- in the computation of income for the A.Y. 2017-18. The assessee has neither furnished any details nor submitted any documentary evidence in this regard and hence the expenses of Rs.16,11,736/- as claimed by the assessee in his return of income for the year under consideration was treated as his income from undisclosed sources under Section 69A of the Act and added back to the total income of the assessee. Further, assessee had also claimed Rs.1,62,912/- as deduction under Chapter VIA of the Act. As the assessee has not provided any documentary evidence in this regard and the claim of the assessee was disallowed. Further, the assessee had also shown agricultural income of Rs.7,67,698/-. The assessee was asked to furnish the details alongwith documentary evidences in this regard. However, the assessee has not complied with any of the statutory notices issued by the Assessing Officer. Hence, agricultural income shown by the assessee to the tune of Rs.7,67,698/- was treated as unexplained income from undisclosed sources under Section 69A of the Act. The assessment was completed under Section 144 read with Section 143(3) of the Act on 07.12.2019 at total income of Rs.83,08,507/-.
Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the first appellate authority which was decided by
Now the assessee is in second appeal before us. The following grounds have been taken in this appeal: -
“1. The Ld. CIT (Appeals), National Faceless Appeal Centre (NFAC), Delhi has grossly erred in law and in facts in dismissing the appeal ex-parte without affording reasonable opportunity of being heard to the appellant. The appeal of the appellant may kindly be restored to the file of the Ld. CIT (Appeals) and may please be directed to afford reasonable opportunity of being heard.
2. The Ld. CIT(A), NFAC has erred in law and in facts in confirming the action of the Ld. A.O. in making an addition of Rs.54,16,091/- being the amount of deposits in the bank accounts, i.e. Rs.74,88,106/- in excess of the amount of gross receipts of Rs 20,72,015/- declared in the return of income as turnover u/s.44AD. The impugned addition of Rs.54,16,091/- is made as unexplained deposit in the bank u/s. 69A. The addition of Rs 54,16,091/- being illegal and bad in facts is prayed to be deleted.
3. The Ld. CIT(A), NFAC has erred in law and in facts in confirming the action of the Ld. A.O. in the disallowance expenditure of Rs.16,11,736/- claimed against the income/turnover of Rs.20,72,015/- disclosed u/s. 44AD holding the same as income from undisclosed sources u/s.69A of the I.T. Act. The impugned addition of Rs.16,11,736/-being illegal and bad in facts is prayed to be deleted.
4. The Ld. CIT(A), NFAC has erred in law and in facts in confirming the action of the Ld. A.O. in the disallowance of the claim of the appellant of Rs.1,62,912/- under Chapter VIA on the ground that the appellant has claimed the deduction wrongly. The disallowance of Rs.1,62,912/-being bad in law and in facts is prayed to be allowed.
5. The Ld. CIT(A), NFAC has erred in law and in facts in confirming the action of the Ld. A.O. in the disallowance of the claim of agricultural income of Rs.7,67,698/- treating the same as unexplained income u/s. 69A of the Act. The addition of Rs.7,67,698/-being bad in law and in facts is prayed to be allowed.
(Assessment Year: 2017-18) Ilyasbhai Kasambhai Rathod vs. ITO Page 5 of 7 6. Without prejudice to the above, the Ld. CIT (A), NFAC has erred in law and in facts in not allowing the benefit of telescoping of agricultural income of Rs.7,67,698/- received during the year under consideration against the unexplained deposit made in the bank account of Rs.54,16,091/- by treating the same as unexplained u/s. 69A of the I.T. Act. Thus, the appellant prays to grant telescoping of above unexplained income of Rs.7,67,698/- against the unexplained deposit made in the bank account or appropriate direction may please be given to the Ld. AO to grant such relief.
7. Appellant craves liberty to add, alter, amend, substitute or withdraw any of the grounds of appeal hereinabove contained.””
6. Shri Hemant Suthar, Ld. AR of the assessee, submitted that no compliance was made before the Ld. CIT(A) and, therefore, the additions made by the Assessing Officer was not adjudicated by him on merit. The assessee had also filed certain additional evidences in the paper-book, which was requested to be admitted. The Ld. AR requested that another opportunity may be provided by setting aside the matter to the file of the Assessing Officer.
Per contra, Shri Rameshwar P. Meena, Ld. DR had no objection, if the matter was set aside to the file of the Assessing Officer.
We have considered the request of the assessee. It is found that no compliance was made by the assessee before the Assessing Officer and the source of deposits appearing in the bank account of the assessee was not explained. Further, no compliance was made in respect of other queries made by the AO. Before the Ld. CIT(A) also, the assessee did not make any compliance in spite of three opportunities provided by him. The assessee cannot escape by placing the blame for non-compliance on the counsel. It is a settled law that there is no general proposition that mistake of counsel by itself is always a sufficient ground. When the Assessing (Assessment Year: 2017-18) Ilyasbhai Kasambhai Rathod vs. ITO Page 6 of 7 Officer had passed ex-parte order because of total non-compliance before him and the assessee had filed first appeal before the Ld. CIT(A), the assessee should have been careful enough to ensure that proper compliance was made before the appellate authority. It was the duty of the assessee to watch his affairs before the AO and the CIT(A). The assessee was aware of the ex-parte order passed by the AO and the pending appeal, still he had not exercised any care to enquire about the status of appeal and tried to shift the responsibility on his lawyer. The assessee was certainly negligent and his act was lethargic. We are not convinced with the explanation of the assessee regarding non-compliance before the lower authorities. Therefore, we deem it proper to impose a cost of Rs.10,000/- on the assessee which should be deposited to the Prime Minister’s National Relief Fund within a period of 15 days from the date of receipt of this order. Subject to the payment of cost, we deem it proper to set aside the matter to the file of the Jurisdictional Assessing Officer with a direction to allow another opportunity to the assessee to explain the nature of deposits appearing in the bank account of the assessee as well as the other issues on which addition was made by the AO. The assessee is free to produce the additional evidences filed before us as well as any other evidence as deemed fit before the AO. The assessee is also directed to respond to the queries of the Assessing Officer and produce the documents and clarifications as required by him. In case the assessee does not make compliance in the course of set aside proceeding, the Jurisdictional Assessing Officer will have liberty to pass the order on the basis of the materials available on record.
Order pronounced in the open Court on this 10th December, 2025.