MUSLIM LALMOHAMMED SOLANKI,AHMEDABAD vs. INCOME-TAX OFFICE, WARD 6(1)(1), AHMEDABAD

At the outset, it is noted that there is a delay of 10 days in filing the present appeal before us. In support of the condonation request, the assessee has filed an affidavit stating that the delay was caused due to circumstances beyond his control. The responsibility for filing the appeal was entrusted to the previous authorised representative, R B Rathi & Co., Advocate and Tax Consultant, who failed to file the appeal within the prescribed time limit. Upon realizing this lapse, the assessee promptly engaged a new authorised representative, CA Vipul Gohil, on 23.02.2025, who ensured the appeal was filed at the earliest. The affidavit further clarifies that there was no intention to delay the filing and that the delay was neither wilful nor due to negligence but caused due to representative error and miscommunication. It is also stated that the delay has not caused any prejudice to the Revenue, and the assessee acted in good faith and took remedial steps expeditiously.

The Ld. Departmental Representative (DR) did not raise any objection to the condonation of delay.

In view of the reasons stated in the sworn affidavit and considering that the delay is marginal (10 days) and adequately explained, and also taking into account the judicial principle that matters should be decided on merits rather than technicalities, we are satisfied that the delay deserves to be condoned in the interest of substantial justice.

Accordingly, the delay of 10 days in filing the appeal is condoned, and the appeal is admitted for adjudication on merits. Facts of the Case

The assessee is an individual. A reassessment proceeding was initiated under section 147 of the Act and notice u/s.148 was issued on 26.03.2018 based on information received that cash deposits aggregating Rs.13,75,450/- were made in his Bank of Baroda account during the financial year 2010-11. Despite repeated opportunities, the assessee failed to file a return of income or any explanation in response to notices issued under various sections of the Act. Accordingly, the AO completed the reassessment ex parte under section 144 r.w.s.147, and added Rs.13,75,450/- to the assessee's income u/s.69A of the Act as unexplained cash deposit.

Aggrieved, the assessee preferred an appeal before the CIT(A) wherein the delay in filing appeal was condoned. However, despite multiple hearing notices issued on 20.05.2022, 16.08.2023, 11.01.2024, and 21.10.2024, the assessee failed to file any written submission or supporting evidence. The CIT(A), therefore, dismissed the appeal and confirmed the addition, holding that the AO had passed a reasoned and speaking order.

The assessee preferred an appeal before us raising following solitary ground: “The Lrd. CIT (A) has erred both in law and in fact by confirming the addition of Rs.13,75,450/- without due consideration and understanding of the circumstance of the case. The Appellant's claim and explained of source of the cash deposit into the bank account are out of genuine transaction has been rejected on account of absence of any evidences and confirmed addition of Rs.13,75,450/- under section 69A of Income Tax Act.”

The Ld. Authorised Representative (AR) submitted a detailed statement of facts along with supporting reconciliation from the assessee's bank book for FY 2010-11. It was clarified that the earlier claim before the CIT(A) that the cash belonged to a relative was erroneous and incorrectly filed by the former representative. It was clarified that the cash deposited in the assessee's bank account belonged to the assessee himself and was out of business receipts, particularly cash recovery from sundry debtors arising from trading operations. It was submitted that the bank transactions were duly recorded in the books of accounts and supported by summary of cash book and ledger.

The AR submitted that the assessee is now ready to produce the complete books of accounts, supporting documents, and bank reconciliation before the AO for proper verification.

The Ld. DR did not raise any objection to the remand of the matter back to the AO for verification of the assessee's claim and the supporting documents.

We have heard both parties and carefully perused the records. It is evident that the assessment and the first appellate proceedings were concluded ex parte due to lapses on the part of the assessee's representative. At present, the assessee has furnished a coherent explanation that the deposits represent business-related cash collections from sundry debtors and not unaccounted income. He has also placed on record a summary of the bank book and has expressed willingness to produce detailed ledgers and documentary evidence.

In view of these developments and the fact that the DR has no objection to the remand, we are of the considered view that the matter deserves to be restored to the file of the AO for fresh adjudication after granting reasonable opportunity of hearing to the assessee. However, we also note that there has been substantial non-compliance at earlier stages of assessment and appeal proceedings due to negligence and lack of diligence on part of the assessee's authorised representative. Such conduct causes avoidable burden on the judicial and administrative machinery.

Accordingly, the order passed by the Ld. CIT(A) is set aside. The matter is restored to the file of the AO with a direction to examine the explanation, bank records, books of accounts and pass a fresh assessment order in accordance with law after affording due opportunity to the assessee. As a measure of deterrence, a cost of Rs.10,000/- is imposed on the assessee, which shall be paid to the credit of the Income Tax Department within 30 days from receipt of this order. Proof of such payment shall be submitted to the AO.

In the result, the appeal is allowed for statistical purposes, subject to the above directions. Order pronounced in the Open Court on 9th April, 2025 at Ahmedabad. (SUCHITRA KAMBLE) JUDICIAL MEMBER (MAKARAND V. MAHADEOKAR) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, दिनांक/Dated 09/04/2025आदेश की प्रतिलिपि अग्रेषित/