RANNA SHASHANK SHAH,AHMEDABAD vs. THE ITO, WARD-5(2)(3), AHMEDABAD

This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 31.10.2023 for the Assessment Year (A.Y.) 2017-18 in the proceeding under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

There was a delay of 551 days in filing of this appeal. The assessee has filed an affidavit explaining the reason for the delay. It is submitted that the assessee was facing several litigations pursuant to the (Assessment Year: 2017-18) Ranna Shashank Shah vs. ITO Page 2 of 5 proceedings initiated by the Debt Recovery Tribunal against the concerns owned by him and his family members. Due to the multiple litigations, the assessee was mentally disturbed and pre-occupied with the recovery proceedings pending before the Debt Recovery Tribunal. As a result, the present appeal could not be filed in time. The assessee has brought on record the details of various proceedings before the Debt Recovery Tribunal, Sessions Court, CMM Court and Bombay High Court initiated by different Banks and it is found that altogether 14 such matters were pending. Considering the explanation of the assessee, the delay in filing the present appeal by the assessee 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 17.12.2017 declaring total income of Rs.8,95,680/-. The case was selected for scrutiny to examine the cash deposits in the bank account during demonetisation period. It transpired that the assessee had made total cash deposit of Rs.47,81,000/- in four bank accounts during the demonetisation period. The Assessing Officer was not convinced with the explanation of the assessee regarding the source of cash deposits. Accordingly, the entire cash deposit of Rs.47,81,000/- was treated as unexplained money and added to the income of the assessee under Section 69A of the Act. The assessment was completed under Section 143(3) of the Act on 26.12.2019 at a total income of Rs.56,76,680/-

Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the first appellate authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed.

Shri Alpesh Shah, Ld. AR of the assessee, submitted that no compliance could be made before the Ld. CIT(A) who had dismissed the appeal without examining the merits of the addition. The Ld. AR explained that all the notices were sent on the e-mail address. However, the assessee had given an option in Form no.35 that no communication may be sent on his e-mail id. Since the assessee could not comply to the notices, the matter was decided ex-parte by the Ld. CIT(A). The Ld. AR submitted that the assessee was running business of Boutique selling handloom garments and the cash deposits in the bank account represented the sale proceeds. The Ld. AR requested that the assessee may be allowed another opportunity to explain the cash deposits by setting aside the matter to the file of Ld. CIT(A).

Per contra, Shri Rameshwar P. Meena, Ld. Sr. DR had no objection if the matter was set aside to the file of the Ld. CIT(A) for allowing another opportunity to the assessee.

We have considered the request of the assessee. We are not convinced with the explanation of the assessee regarding non-compliance before the Ld. CIT(A). In the faceless scheme, all the notices are mandatorily sent on the e-mail address only. It is not the case of the assessee that the e-mail communications were not received. The Ld. CIT(A) had allowed all together six opportunities but no compliance was made on any of the occasion. When 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 Ld. CIT(A). The assessee was certainly negligent and his act was lethargic. We, therefore, 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 tax, the Ld. CIT(A) is directed to allow one more opportunity to the assessee to explain the source of cash deposit in the bank account during the demonetisation period. The assessee too is directed to make compliance before the Ld. CIT(A) in the course of set side proceeding and bring on record the evidences in support of cash deposits and also comply to the requirements of Ld. CIT(A). In case the assessee does not make compliance in the set aside proceeding, the Ld. CIT(A) will be at liberty to pass the order on the basis of materials available on record.