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Facts
The assessee made a cash deposit of Rs. 12,02,000/- and total credit entries of Rs. 12,07,183/- in his bank account for AY 2012-13. He did not file an ITR, leading to a reassessment under Section 147 and an ex-parte assessment under Section 144, treating the sum as unexplained money under Section 69A. The CIT(A) dismissed the appeal for non-prosecution, which the assessee attributed to lack of awareness, reliance on an agent, and a violation of natural justice. There was also a delay of 232 days in filing the appeal before the ITAT.
Held
The ITAT condoned the delay in filing the appeal, finding the reason for the delay to be genuine. Upon perusal of the bank statement and explanations provided by the assessee's A.R. regarding withdrawals and deposits, the tribunal found that the credit entries and cash deposits were properly explained. Therefore, the appeal of the assessee was allowed.
Key Issues
Condonation of delay in filing the appeal; validity of ex-parte assessment and dismissal by CIT(A) for non-prosecution; treatment of cash deposits as unexplained money; violation of principles of natural justice.
Sections Cited
144, 250, 147, 151, 148, 142(1), 69A
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Income Tax Appellate Tribunal, AHMEDABAD “SMC” BENCH
Before: Dr. BRR Kumar & Ms. Suchitra Kamble
आदेश/ORDER Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 04-01- 2024 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2012-13.
The grounds of appeal
are as under:-
1. Condonation of Delay: The appellant submits that the delay in filing the appeal before the Commissioner of Income Tax (Appeals) was unintentional and caused by genuine hardships. The appellant, being unaware of the technicalities and requirements under tax law relied on an agent to manage financial and tax-related matters, including the disputed bank account. Due to misleading guidance and lack of awareness, the appellant could not comply with the timelines for filling the appeal. It is respectfully submitted that the delay should be condoned in the interest
2. Unjustified Ex Partee Assessment under Section 144 The assessment under Section 144 was conducted without considering the genuine сircumstances surrounding the appellant's financial status. The appellant was unemployed during the relevant financial year (2011-12) and had no independent source of income. The bank account in question was operated by an agent named Minesh Patel for the purpose of arranging the appellant's oversees travel. The appellant had executed a power of attorney authorising the agent to manage the bank account and was unaware of the nature and extent of the transactions carried out. The addition made in the assessment order based on this account is therefore unjustified as the transactions do not represent the appellant's income
3. Non-Prosecution Dismissal by CIT(A):
The Commissioner of Income Tax (Appeals) dismissed the appeal for non-prosecution without considering the merits of the case. Multiple notices under Section 250 were issued to the appellant but due to the appellant's limited understanding of tax procedures and lack of proper legal assistance, there was a failure to respond. The appellant submits that the non-compliance was not deliberate but arose from circumstances beyond his control. The appellant requests that the matter be heard on merits to avoid a miscarriage of justice.
4. Violation of Principles of Natural Justice The appellant submits that the dismissal of the appeal by CIT(A) without examining the merits constitutes a violation of the principles of natural justice. The appellant was not provided a fair opportunity to present the evidence and explain his case, particularly the role of the agent in operating the bank account in judicial and quasi- proceedings, a fair opportunity of hearing must be granted before any adverse decision is taken. The appellant requests that the Hon'ble ITAT provide an opportunity to present all relevant documents and evidence, including the power of attorney, bank statements, and any correspondence with the agent to substantiate his claims.
No Intention to Evade Tax:
The appellant maintains that there was no intent to conceal income or evade taxes. The disputed transactions were carried out by an agent, and the appellant had no direct involvement in the financial activities. The appellant had acted in good faith, assuming that the agent would handle all related matters, including tax compliance. The appellant is willing to cooperate fully with the authorities to resolve the matter and requests that a fair evaluation of the facts be conducted.
Relief Sought:
Chirag Patel, A.Y. 2012-13 -The appellant prays that the Hon'ble ITAT may kindly condone the delay in filing the original appeal before the CIT(A) and set aside the order dismissing the appeal. - The case may be remanded to the Assessing Officer or the CIT(A) for a fresh hearing on merits, considering the evidence and documents provided by the appellant - Any other relief that the Hon'ble Tribunal deems fit in the interest of justice may also be granted.”
As per the information available with the Department, the Assessing Officer observed that during the year under consideration, the assessee made cash deposit of Rs. 12,02,000/- in his saving bank account with Union Bank of India. The assessee has not filed return of income within the prescribed time line. The case of the assessee was reopened u/s. 147 of the Act after recording the reasons and obtaining necessary sanction u/s. 151 of the Act from the PCIT. Notice u/s. 148 of the act was issued on 29-03-2019 but the same was not complied by the assessee. Subsequent statutory notices u/s. 142(1) were also not responded. Therefore, the Assessing Officer held that the credit entries to the tune of Rs. 12,07,183/- including the cash deposits of Rs. 12,02,000/- should be treated as unexplained money u/s. 69A of the Act.
The ld. A.R. submitted that there is a delay of 232 days in filing the present appeal. The reason given by the assessee in condonation of delay application appears to be genuine. Hence delay is condoned. The ld. A.R. submitted that the assessment order and the order of the CIT(A) both are ex-parte as the assessee has not received notices. The ld. A.R. submitted that the matter may be remanded back to the file of the Assessing Officer.
We have heard both the parties and perused all the 6. relevant materials available on record. At the time of hearing, the ld. A.R. has given the details of the withdrawals and the deposits. From the perusal of the bank statement, it appears that the assessee was continuously depositing the amount prior to the withdrawals and therefore the contention of the ld. A.R. appears to be justified that credit entries and the cash deposits were properly explained through statement of account given at the time of hearing. Therefore, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 29-07-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 29/07/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद