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Facts
The assessee appealed against the CIT(A)'s order confirming an addition of Rs.9,81,000/- under Section 69A for unexplained cash deposits in her bank account during A.Y. 2011-12. The assessee claimed the deposits were from tailoring business income and a cash gift from her mother, but the CIT(A) dismissed her appeal as unprosecuted due to non-submission of evidence. A delay of 599 days in filing the appeal before the ITAT was also a preliminary issue.
Held
The Tribunal condoned the delay, finding sufficient cause due to the previous consultant's negligence. It found the assessee's explanations for the cash deposits—supported by a cash book for business income and an affidavit with donor's bank statement for the gift—to be reasonable, verifiable, and substantiated. Consequently, the Tribunal held the addition under Section 69A was unsustainable and directed its deletion.
Key Issues
Condonation of a 599-day delay in filing the appeal; and the validity of an addition under Section 69A for cash deposits, specifically whether the sources (tailoring business income and gift) were adequately explained.
Sections Cited
69A, 147, 143(3), 151, 148, 142(1), 133(6), 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Asstt.Year : 2011-12 Parvinbanu Mayudin Kazi ITO, Ward-1 50/51, Sabnam Society Vs. Anand. Nr. New Water Tank Anand, Gujarat. PAN : AWPPK 5536 L (Applicant) (Responent) : Shri B.T. Thakkar, AR Assessee by : Shri Amit Pratap Singh, Sr.DR Revenue by सुनवाई क� तारीख/Date of Hearing : 28/07/2025 घोषणा क� तारीख /Date of Pronouncement: 29/07/2025 आदेश/O R D E R आदेश आदेश आदेश PER MAKARAND V.MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 26.05.2023 passed by the Commissioner of Income-tax (Appeals), NFAC, Delhi [“CIT(A)”], for A.Y. 2011–12, confirming the addition of Rs.9,81,000/- made by the Assessing Officer under section 69A of the Income-tax Act, 1961, in respect of cash deposits in her savings bank account vide his order dated 26.12.2018 passed under section 143(3) r.w.s. 147 of the Act.
Condonation of Delay 2.1 At the outset, it is observed that there is a delay of 599 days in filing the present appeal before us. The assessee has filed an application seeking condonation of delay accompanied by a duly sworn affidavit dated 20.03.2025, explaining the reasons for the belated filing. As per the condonation application and said affidavit it was clarified that the assessee is a lady belonging to a modest background with limited awareness of legal procedures. She had entrusted the handling of her appeal before the CIT(A), NFAC, to her erstwhile tax consultant, under the bonafide belief that the matter was being properly attended to. She did not receive any communication or update regarding the progress or outcome of the appeal. It was only when recovery proceedings were initiated by the jurisdictional Assessing Officer and a notice was received by her in that regard, that she came to know that her appeal had been dismissed. On ascertaining the facts, she engaged a new authorised representative, who upon verification of the records, discovered that the order of the CIT(A) was passed on 26.05.2023. Immediately thereafter, she contacted a new consultant, who accessed the portal, retrieved the order, and took steps to file the present appeal. Significantly, the assessee has also affirmed that she had paid the appeal fee of Rs.10,000/- on 12.06.2023, on the instructions of her earlier consultant. However, despite payment of the appeal fee, her consultant did not file the appeal, which caused further delay, of which she had no knowledge.
2.2 These facts are duly corroborated by the challan for appeal fee payment dated 12.06.2023, which supports the genuineness of the assessee’s claim and demonstrates her intent to pursue the matter diligently. The delay is, therefore, attributable to circumstances beyond the control of the assessee, and clearly falls within the expression “sufficient cause” as contemplated in law. It is settled law that a pragmatic and justice-oriented approach should be adopted in such cases, particularly when delay arises due to conduct of authorised representatives and not due to any deliberate act of the litigant. In view of the above, we are satisfied that the delay is not intentional or malafide. Accordingly, in the interest of substantial justice, the delay deserves to be condoned.
Facts of the Case 3.1 The assessee had not filed the original return of income. Proceedings under section 147 were initiated after recording reasons and obtaining approval under section 151. Notice under section 148 was issued on 27.03.2018. The assessee filed return on 31.10.2018 declaring total income of Rs.1,74,244/-. The AO issued notices under sections 142(1) and 133(6), and after obtaining bank statements, observed that cash was deposited on various dates. The assessee’s response to the show cause notice dated 21.12.2018 merely stated that the deposits were out of "own income" and/or "gift from relatives" but no documentary evidence was filed. The AO held that the explanation was vague and unsupported, and in absence of details or confirmations, treated Rs.9,81,000/- as unexplained money under section 69A. The AO concluded assessment under section 143(3) r.w.s. 147, assessing total income at Rs.11,55,240/-, and initiated penalty proceedings under section 271(1)(c).
3.2 The assessee challenged the addition before the CIT(A), NFAC. In the appeal proceedings, the assessee submitted a brief statement of facts, reiterating the explanation that Rs.4,90,000/- was from tailoring business and Rs. 4,91,000/- was a gift from her mother, Smt. Nasimbanu. However, the CIT(A) recorded that multiple notices were issued but no response or evidence was filed. In absence of any supporting material or compliance, the CIT(A) treated the appeal as unprosecuted and dismissed the same, confirming the addition of Rs.9,81,000/-.
The assessee has raised the following additional ground of appeal before us:
The Ld. CIT (Appeal) erred in law and on facts in confirming addition of Rs.9,81,000/- U/s 69A of the IT Act, 1961 without considering the facts that the appellant is carrying on business of Tailoring business and cash Rs.4,90,000/- deposited in the bank account on 03.11.2010 out of the business collection of the current year and past year and Rs.4,91,000/- is deposited in the bank on 20.09.2010 out of cash gift Rs.5,00,000/- received from appellant's Mother Nasimbanu on 20.09.2010.
During the course of hearing, the learned Authorised Representative (AR) submitted that the assessee was engaged in tailoring business, and had maintained a cash book for the year under consideration. The deposit of Rs.4,90,000/- on 03.11.2010 was out of accumulated business receipts, duly recorded in the books. The AR also submitted that the amount of Rs.4,91,000/- deposited on 20.09.2010 was part of a cash gift of Rs.5,00,000/- received from her mother, Smt. Nasimbanu. The AR placed on record a sworn affidavit from the mother confirming the gift, her bank statement, showing availability of funds to make the gift and the cash book, showing opening balance and entries of cash receipts leading to deposit.
The learned DR relied upon the orders of the AO and CIT(A), contending that the assessee failed to produce any evidence during the statutory proceedings.
We have carefully considered the rival submissions and perused the evidences placed on record. The central issue is whether the assessee has satisfactorily explained the source of cash deposits of Rs.9,81,000/- in her savings bank account during the relevant year. As regards the tailoring income the assessee has produced a cash book, showing daily cash receipts from tailoring activity. The entries are consistent and regular. The cash balance as on 03.11.2010 adequately explains the deposit of Rs.4,90,000/- . There is no material on record to disbelieve the business activity, especially when return of income showing tailoring receipts was accepted.
7.1 As regards the gift the assessee has furnished an affidavit of her mother, confirming the giving of Rs.5,00,000/- in cash. The bank statement of the donor indicates sufficient cash availability. The identity and capacity of the donor stand explained. No contrary finding or cross-examination was sought by the Department.
7.2 In our considered view, once the assessee has discharged the initial burden with supporting evidences, and no material is brought by the Revenue to disprove the claim, the addition cannot be sustained merely on suspicion.
7.3 Accordingly, we hold that the explanation offered by the assessee is reasonable, verifiable and substantiated. The addition made under section 69A is unsustainable. The addition of Rs.9,81,000/- under section 69A is directed to be deleted.
In the result, the appeal is allowed. Order pronounced in the Court on 29th July, 2025 at Ahmedabad.