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Facts
The assessee, a 65-year-old farmer from a remote area, failed to respond to notices and file returns due to illiteracy and lack of awareness of procedures. The Assessing Officer made an addition of Rs. 12,73,000/- for unexplained cash deposits, and the CIT(A) dismissed the appeal ex-parte due to non-appearance. A separate appeal also involved a penalty of Rs. 5,92,000/-.
Held
The Tribunal condoned the delay in filing the appeal, accepting the explanation of genuine hardship and lack of awareness. The Tribunal found that the cash deposits were explained by agricultural income based on additional evidence submitted and deleted the addition of Rs. 12,73,000/-. Consequently, the penalty was also held unsustainable.
Key Issues
Whether the addition for unexplained cash deposits is sustainable when supported by agricultural income, and if the penalty levied is valid in light of the deleted addition and the assessee's circumstances.
Sections Cited
69, 144, 147, 148, 142(1), 133(6), 271(1)(c), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & SHRI SIDDHARTHA NAUTIYAL
(Assessment Year: 2010-11) Jagdishkumar Amrutlal Thakar, Vs. Income Tax Officer, Three Gate, Bhavani Temple Road, Ward-3, Harji, Patan, Gujarat-384240 Patan [PAN No.ADCPT7622C] (Appellant) .. (Respondent) Shri Sunil Maloo, CA Appellant by : Respondent by: Shri Rajenkumar M Vasavda, Sr. DR Date of Hearing 12.08.2025 25.08.2025 Date of Pronouncement O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: These appeals have been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide orders dated 28.11.2022 & 13.02.2025 passed for A.Y. 2010-11. Since common facts and issues are involved for both the years under consideration, both the cases are taken up together.
&984/Ahd/2025 Jagdish Amrutlal Thakar vs. ITO Asst. Year –2010-11 - 2– We shall first discuss the facts for A.Y. 2010-11 ( for A.Y. 2010-11 as well
The assessee has raised the following grounds of appeal:
(A.Y. 2010-11) “1. The learned CIT(A) has erred both in law and on facts by failing to consider that the appellant had submitted all relevant documents during the appellate proceedings. However, due to multiple appeals pertaining to the same assessment year being pending simultaneously, the submissions were inadvertently made in connection with the penalty appeal rather than the quantum appeal.
2. That the Learned CIT(A) has erred both in law and on facts in upholding the addition of Rs.12,73,000/- made by the Ld. AO under section 69 of the Act, in respect of cash deposits made during the year without considering the source of deposits made, accordingly this case may kindly be set aside to the office of the AO for proper verification in the interest of natural justice.
The Appellant reserves the right to add, alter, amend, or modify any of the grounds of appeal during the course of the appellate proceedings.” Application for condonation of delay:
3. At the outset, we note that there is a delay of 829 days in filing of the appeal by the assessee. The assessee has submitted an Affidavit explaining the reasons for the delay. On perusal of the same, we find that the delay has occurred due to genuine and bonafide circumstances. The assessee is a senior citizen, aged 65 years and is residing in the village of Harij, a remote area in the Patan district of Gujarat. During the relevant assessment year, the assessee was engaged in small-scale agricultural activities. Due to his rural background and limited literacy, the assessee was not aware of the legal and procedural requirements for filing an appeal before the Tribunal. Furthermore, the assessee submitted that he had relied on certain local persons who assisted in filing the appeal before the first appellate authority, but they did not keep him informed about the outcome &984/Ahd/2025 Jagdish Amrutlal Thakar vs. ITO Asst. Year –2010-11 - 3– or the available remedies thereafter. It was only when the assessee recently approached a Chartered Accountant in Ahmedabad for guidance on a separate appellate order passed under section 271(1)(c) of the Act that he became aware of the earlier appellate order passed under section 250 of the Act by Ld. CIT(A) relating to the quantum proceedings, and the remedy of filing an appeal before the Tribunal. Immediately thereafter, the assessee has filed the present appeal before ITAT and has also placed a formal application on record seeking condonation of delay, supported by an Affidavit. In view of the facts highlighted above and considering the assessee’s age, rural background, limited resources, and genuine lack of awareness about the legal procedures, we are of the opinion that the delay in filing the appeal was neither deliberate nor intentional. Accordingly, in the interest of justice, the delay of 829 days in filing of the appeal is hereby condoned, and the appeal is admitted for adjudication on merits.
On Merits:
The brief facts of the case are that in the instant case the assessment order was passed under section 144 read with section 147 of the Income-tax Act, 1961 (Act). The Assessing Officer issued a notice under section 148 of the Act upon receipt of information that the assessee had made large cash deposits in his bank account. Despite several notices issued under sections 142(1), 133(6) of the Act and repeated reminders, the Assessing Officer observed that the assessee failed to respond to either of the notices and nor did the assessee file return of income. The Assessing Officer found that the assessee had deposited a sum of Rs. 12,73,000/- in cash, in his HDFC Bank account without offering any explanation about the source of such deposits. Since the assessee did not reply to any of the notices issued by the Assessing Officer and nor did he provide any supporting evidence, the entire amount of Rs. 12,73,000/- was held to be unexplained &984/Ahd/2025 Jagdish Amrutlal Thakar vs. ITO Asst. Year –2010-11 - 4– investment under section 69 of the Act by the Assessing Officer and added to the total income of the assessee. Further, penalty proceedings under sections 271(1)(c) of the Act. were also initiated for concealment of income.
In appeal, Ld. CIT(A) dismissed the appeal of the assessee on account of non-appearance, with the following observations:
“8. Held:- During the course of appeal proceedings, no reply has been filed by the appellant. I have perused the order of the Assessing Officer and considered the facts of the case. The appellant has not perused the appeal despite being granted several opportunities as elaborated above. No details, documents or submissions have been provided by the appellant substantiating its grounds of appeal
. The mere facts mentioned in Form No. 35 cannot be considered in the absence of any supporting documentary evidence and submissions. The AO has passed a very reasoned and speaking order considering all the facts and circumstances of the case and no interference with the order of the AO is called for. All the grounds of appeal are therefore dismissed.”
6. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.
We have heard the rival contentions and perused the material on record. The assessee is in appeal before us against the ex-parte order passed by the Ld. CIT(A), confirming the addition of ₹12,73,000/- made by the Assessing Officer under section 69 of the Act. The assessment was framed u/s 144 r.w.s. 147 on account of cash deposits in the assessee’s bank account, which as per the Assessing Officer were unexplained investments, primarily due to non- compliance by the assessee during assessment proceedings. Before us, the assessee has filed written submissions and placed on record additional evidences at pages 23 to 49 of the Paper Book, including the extracts of 7/12 and 8A records, sale bills of agricultural produce, cash book, and financial statements. These documents show that the assessee is an agriculturist holding substantial agricultural land and that the cash deposits were out of agricultural income. The &984/Ahd/2025 Jagdish Amrutlal Thakar vs. ITO Asst. Year –2010-11 - 5– cash flow statement and supporting bills placed on record, in our view, reasonably explain the source of the cash deposits. We further note that the assessee is a 65-year-old farmer residing in a remote town and was unable to respond to the earlier notices issued by the Assessing Officer and Ld. CIT(A) due to lack of awareness about Income Tax procedures. It is also noted that the additional evidences were inadvertently uploaded by the assessee under the wrong tab during first appellate proceedings, thereby leading to the CIT(A) disposing of the appeal of the assessee on ex-parte basis, without examining the merits of the case. In view of the evidences now placed on record and the explanation offered and also the quantum of addition involved, we find merit in the plea of the assessee. The source of cash deposits in our considered view stands explained by agricultural income, and there is no contrary material brought on record by the Revenue to disprove the claim. Accordingly, the addition of ₹12,73,000/- made by the Assessing Officer u/s 69 is hereby deleted.
In the result, the appeal of the assessee is allowed.
Now we come to ITA 984/Ahd/2025 for A.Y. 2010-11
At the outset, we observe that the appeal is time barred by 01 days. The delay of 01 days is condoned on due consideration of facts of assessee’s case and owing to causing no perceptible prejudice to other side.
The assessee has raised the following grounds of appeal:
“1. The Ld. CIT(A) erred in law and facts by upholding the penalty demand of Rs. 5,92,000/- charged u/s 271(1)(c) of the Act. The impugned penalty is unsustainable in law and therefore, liable to be quashed. 2. The Appellant reserves the right to add, alter, amend, or modify any of the grounds of appeal during the course of the appellate proceedings.”
&984/Ahd/2025 Jagdish Amrutlal Thakar vs. ITO Asst. Year –2010-11 - 6–
ITA 984/Ahd/2025 pertains to the assessee’s appeal against levy of penalty u/s 271(1)(c) of the Act, which came to be confirmed by Ld. CIT(A).
Since, we have allowed the appeal of the assessee with respect to quantum additions, accordingly, the levy of penalty in respect of these quantum additions is no longer sustainable.
Accordingly, the appeal of the assessee is allowed.
In the combined result, both the appeals of the assessee are allowed. This Order pronounced in Open Court on 25/08/2025
Sd/- Sd/- (DR. BRR KUMAR) (SIDDHARTHA NAUTIYAL) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad; Dated 25/08/2025 TANMAY, Sr. PS TRUE COPY आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��थ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,