BHARATBHAI RAGHAVBHAI JOGRANA,BHAVNAGAR vs. THE ITO, WARD-1(1), BHAVNAGAR

Aggrieved by the assessment order, the assessee filed an appeal before the CIT(A). However, throughout the appellate proceedings, the assessee did not respond to any of the five hearing notices issued by Ld. CIT(A) between 2021 and 2024. Observing complete non-compliance over a period of nearly four years, the CIT(A) held that the assessee had not shown any interest in pursuing the appeal and dismissed the appeal in limine, relying on judicial precedents which have held that that mere filing of an appeal without pursuing it cannot be a ground for adjudication. Without prejudice, the CIT(A) also decided the matter on merits. Ld. CIT(A) examined the bank account statements submitted by the assessee and observed that the so-called gold loan entries could not be substantiated by the assessee. For instance, one loan of Rs. 6.85 lakh was credited and immediately repaid on the same day, without any explanation. Other credits of Rs. 7 lakh and Rs. 12.20 lakh were classified as disbursement credits but not as gold loans and were almost entirely withdrawn on the same day. The assessee provided no explanation or supporting evidence for these transactions. With respect to the cash deposits, the assessee Page No 4 Bharatbhai Raghavbhai Jograna vs. ITO merely claimed they were out of family savings and sale of agricultural produce but did not submit any documentation to support these claims. Therefore, the CIT(A) upheld the additions made by the Assessing Officer, finding the entire amount of Rs.41,02,924/- to be unexplained. In the result, the appeal was dismissed both for non-prosecution and on merits.

The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.

At the outset, we note that there is a delay of 85 days in filing of the present appeal before us against the order passed by the Ld. Commissioner of Income-tax (Appeals) under section 250 of the Act. The CIT(A) order was passed on 30.01.2025, and the appeal ought to have been filed on or before 31.03.2025. However, the appeal was filed on 24.06.2025. In support of the application for condonation, the assessee has filed an Affidavit explaining the reasons for the delay. It is stated that the assessee is an illiterate person, earning his livelihood through sale of milk, and that the order of the CIT(A) was passed ex parte and not served upon him physically. The assessee only became aware of the said order upon receipt of a penalty show cause notice dated 05.06.2025 under section 270A of the Act, which was received by him through speed post on 20.06.2025. Upon receiving this notice, the assessee approached his tax consultant who, upon checking the portal, discovered that the appellate order had already been passed. The Page No 5 Bharatbhai Raghavbhai Jograna vs. ITO delay in filing the appeal had occurred on account of these circumstances, which were beyond the control of the assessee. It has further been submitted that all notices of hearing issued during the appellate proceedings were sent through email, but the assessee, being uneducated and unfamiliar with email communication, was not aware of them. The assessee submitted that there was no malafide intention or deliberate delay on his part in pursuing the matter.

Having considered the submissions and the explanation offered in the Affidavit, we are satisfied that the delay in filing the appeal was caused due to bona fide reasons and not due to any deliberate inaction or negligence. In our view, the assessee has shown reasonable and sufficient cause for the delay. Accordingly, in the interest of substantial justice, we hereby condone the delay of 85 days in filing of the present appeal and admit the appeal of the assessee for adjudication on merits.

Before us, the counsel for the assessee submitted that the assessee has a good case on merits and if given an opportunity of hearing, the assessee is in a position to substantiate the source of cash deposits. The counsel for the assessee filed application for additional evidence on the grounds that the assessee, being an illiterate person could not file evidence in support of its case, which go to the root of the matter. The counsel for the assessee drew our attention to page 70-74 of Paper-Book (bank statement) and Page No 6 Bharatbhai Raghavbhai Jograna vs. ITO submitted the assessee obtained gold loan which was transferred by the assessee to his bank account. Accordingly, there was no occasion to make an addition u/s 68 of the Act. Further, the counsel for the assessee submitted that the assessee is in the business of selling milk and drew out attention to page 17 of Paper- Book (income from sale of milk) and argued that the deposits were made from sale of milk by the assessee.

In response, the Ld. DR placed reliance on the observations made by the Assessing Officer and Ld. CIT(Appeals) in their respective orders.

We have heard the rival contentions and perused the material on record. The facts on record indicate that the assessment in this case was completed under section 144 of the Act due to non- compliance by the assessee during assessment proceedings, and the appeal before the Ld. CIT(A) was also dismissed due to continued non-prosecution despite several notices. The Ld. CIT(A), while dismissing the appeal in limine, also proceeded to adjudicate the matter on merits, and confirmed the additions made by the Assessing Officer. Before us, the assessee has placed on record certain additional evidence in the form of bank statements, loan details, and records of income from sale of milk, which go to the root of the matter and were not available before the lower authorities. The explanation offered for such non-submission of evidence earlier is found to be reasonable, particularly in view of the fact that the assessee is an uneducated individual, engaged in milk selling business, and was unaware of the notices sent through Page No 7 Bharatbhai Raghavbhai Jograna vs. ITO electronic communication. Considering the totality of circumstances, and in the interest of substantial justice, we are of the view that the matter requires a fresh examination in light of the additional evidence now produced. Accordingly, we deem it appropriate to restore the matter to the file of the Assessing Officer for de-novo consideration, after giving due opportunity to the assessee to file all necessary documents and submissions in support of his claim. The assessee is directed to appear before the Assessing Officer and cooperate in the proceedings without seeking unnecessary adjournments. The Assessing Officer shall consider the case afresh on merits and in accordance with law, after considering the material placed on record and any further evidence the assessee may wish to rely upon.

Further, we note that both during the course of assessment proceedings as well as appellate proceedings before Ld. CIT(A), there was non-compliance by the assessee. We observe that Ld. CIT(A) had issued five notices of hearing between 2021 to 2024, but the assessee failed to cause appearance. Accordingly, in view of the consistent non- compliance on the part of the assessee before Tax Authorities, we deem it fit to impose a cost of Rs.5,000/-, to be submitted before Prime Ministers Relief Fund, for the purpose of getting the order set- aside to the file of Assessing Officer.

In the result, the appeal is allowed for statistical purposes.