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Facts
The assessee did not file a return of income for AY 2011-12. Based on NMS information, it was found that the assessee deposited over Rs. 10,00,000/- in a bank account. The Assessing Officer (AO) issued notices under Section 148 and later made an addition of Rs. 25,75,981/- as unexplained income under Section 144. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal condoned the delay in filing the appeal due to the negligence of the assessee's tax professional. It was held that the assessee, being a farmer unaware of tax intricacies, should not be penalized for the professional's fault. The matter was remanded back to the AO for proper adjudication.
Key Issues
Whether the delay in filing the appeal should be condoned due to the negligence of the tax professional, and whether the case should be remanded back to the Assessing Officer for proper adjudication.
Sections Cited
139(1), 148, 142(1), 144, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE
(Assessment Year: 2011-12) Dinesh Kumar Jashibhai Patel, Vs. Income Tax Officer, C/o. M S Chhajed & Co., C.A., Ward-3(2)(1), “Kamal Shanti”, Nr. Sardar Patel Ahmedabad Statute, Ahmedabad-380014 [PAN No.AVUPP9093P] (Appellant) .. (Respondent) Appellant by : Shri M S Chhajed, A.R. Respondent by : Shri C Dharani Nath, Sr. D.R. Date of Hearing 01.01.2025 Date of Pronouncement 03.01.2025 O R D E R The appeal filed by the assessee is 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 on 31.07.2023 for A.Y. 2011-12.
2. The grounds of appeal raised by the assessee are as under:
“1. The order passed by the Ld. CIT(A) is against law, equity & justice.
The order passed by Ld. AO is bad and illegal as reopening is made on the basis of deposits made in bank account.
The Ld. AO has erred in law and on facts in reopening of assessment as reasons recorded are incorrect.
The order passed by the Ld. A.O. is bad and illegal as no addition is made for reasons recorded for reopening of assessment.
The Ld. A.O. has erred in law and on facts in making addition U/S 68 of the Act, though no books of accounts are maintained.
Dineshkumar Jashubhai Patel vs. ITO Asst.Year–2011-12 - 2 - 6. The ld. CIT(A) has erred in law and on facts in upholding addition of Rs. 25,75,981/- for cash and credit entries in bank account. 7. The appellant Craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal.”
3. The assessee has not filed return of income under Section 139(1) of the Income Tax Act for A.Y. 2011-12. On the basis of Non Filers Monitoring System (NMS) information it was noticed that the assessee has deposited more than Rs. 10,00,000/- in saving bank account HDFC Bank as mentioned by the Assessing Officer in the assessment order. Therefore, the Assessing Officer has reasoned to believe that income to the extent of Rs. 10,00,000/- has escaped the income and thus issues notices under Section 148 of the Income Tax Act on 27.03.2018 after recording the reason and after obtaining prior approval of PCIT. The assessee did not file the return within the prescribe time allowed under Section 148 and therefore, the Assessing Officer issued notice under Section 142(1) on 24.07.2018 and 30.08.2018 but the same remain non-complied by the assessee. The Assessing Officer, therefore, passed assessment order under Section 144 of the Act and made addition of Rs. 25,75,981/- as unexplained income.
4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
5. The Ld. A.R. submitted that there is a delay of 384 days in filing the present appeal as the assessee is not well-versed with the Income Tax proceedings and has forwarded the proceedings to his accountant who has not informed the assessee any notices received or any order passed in Dineshkumar Jashubhai Patel vs. ITO Asst.Year–2011-12 - 3 - assessee’s case including that of assessment order as well as that of CIT(A) order. The Ld. A.R. submitted that due to the bona fide reason the assessee has filed belated appeal and the delay may be condoned. The Ld. A.R. further submitted due to the negligence on the part of the accountant of the tax professional the assessee should not be offered. The Ld. A.R. requested that the matter may be remanded back to the file of the Assessing Officer as both the assessment order as well as the order of the CIT(A) are ex-parte.
The Ld. D.R. submitted that proper opportunities were given by the Assessing Officer as well as by the CIT(A) to represent assessee’s case but the assessee was negligent and hence the delay should not be condoned and the Assessing Officer has made valid additions.
Heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee is earning agricultural income and is not aware about the intricacies of Income Tax. The assessee was totally relied upon his tax professional who was negligent in the matter and for the fault of the tax consultant the assesse should not be penalized. Therefore, the delay in filing of the present appeal is condoned. Besides this the assessee’s case was not properly represented and the notices were not responded either before the Assessing Officer as well as before the CIT(A) and no evidences were submitted as the tax professional was negligent. Though, the assessee should have taken proper measures to appear before the authorities and should have submitted the details, it will be appropriate to remand back this matter to the file of the Dineshkumar Jashubhai Patel vs. ITO Asst.Year–2011-12 - 4 - Assessing Officer as both the orders are ex-parte. The Assessing Officer is directed to verify the evidences/documents submitted by the assessee and after verification of the same adjudicated the appeal as per Income Tax Act, 1961. The assessee be given opportunity of hearing by following principles of natural justice.
In the result, the appeal of the assessee is partly allowed for statistical purposes. This Order pronounced in Open Court on 03/01/2025