Loading judgment…
Facts
The assessee's appeal was filed with a delay of 272 days, due to the order not being served properly. The case involved the reopening of assessment based on alleged cash deposits, which were later found to be significantly lower than initially stated.
Held
The Tribunal condoned the delay, acknowledging that the assessee was prevented by a reasonable cause. They observed a discrepancy in the initial deposit allegations versus verified amounts, questioning the Assessing Officer's application of mind.
Key Issues
Whether the delay in filing the appeal should be condoned and if the reopening of assessment was based on a flawed premise due to discrepancies in the alleged deposit amounts.
Sections Cited
147, 144, 271(1)(c), 139(1), 148, 133(6), 151
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Order PER LALIET KUMAR, J.M: This appeal by the assessee is directed against the order of the Ld. CIT(A)/NFAC, Delhi dated 20.03.2024, arising out of the assessment order passed u/s 147 r.w.s. 144 of the Income Tax Act, for A.Y. 2011–12.
The appeal has been filed with a delay of 272 days. The assessee has explained that the order of the learned CIT(A) was never served either through hard copy by post or through email. Instead, the order was only uploaded on the departmental portal, which was not communicated to the assessee. It was further explained that the assessee came to know about the conclusion of the appellate proceedings only when a notice for levy of penalty u/s 271(1)(c) of the Act was served on 01.02.2025. Immediately thereafter, steps were taken for filing the present appeal.
The Ld. DR strongly opposed the condonation of delay.
Considering these facts, and keeping in mind the judgment of the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Ors. (167 ITR 471), we are satisfied that the assessee was prevented by reasonable cause from filing the appeal in time. Refusing to condone the delay would defeat substantial justice.
2 Accordingly, the delay of 272 days is hereby condoned and the appeal is admitted for hearing on merits.
The case of the assessee, an individual, was reopened based on information that she had deposited cash of Rs.70,00,000/- in her savings bank account with Punjab & Sind Bank during the financial year 2010–11 relevant to A.Y. 2011–12. The Assessing Officer accordingly issued notice u/s 148 of the Act. The assessment was ultimately framed u/s 147 r.w.s. 144 on 24.12.2018, wherein the Assessing Officer made an addition of Rs.16,31,426/- (comprising cash deposits of Rs.16,30,000/- and bank interest of Rs.1,426/-) treating the same as unexplained income.
Feeling aggrieved by the order of the Assessing Officer, the assessee preferred the appeal before the Ld. CIT(A), however the Ld. CIT(A) had confirmed the order passed by the Assessing Officer.
Now the assessee is in appeal before us, on the ground mentioned in the memo of appeal.
The Ld. AR had fairly submitted that the assessee did not file return of income originally u/s 139(1), nor did she file any return in response to the notice u/s 148. She also remained largely non-compliant before the Assessing Officer as well as before the CIT(A), which led to the ex parte dismissal of the appeal. However, it was submitted that the very basis of reopening was flawed. The Assessing Officer alleged that there were deposits of Rs.70,00,000/-, but after issuing notice u/s 133(6) to the concerned bank, it was verified that the actual deposits were only Rs.16,00,000/-. This clearly demonstrates non-application of mind both by the Assessing Officer while recording reasons and by the Principal Commissioner while granting approval for issuance of notice u/s 148. 8.1 The AR further contended that the assessee had no taxable income during the relevant year and the deposits were duly explainable. It was urged that the reopening is invalid in law and that the matter be remanded back for reconsideration of all grounds, including the legal ground challenging reopening.
Per contra, the Ld. DR opposed the submissions. He argued that since the assessee did not file her return of income either originally or in response to notice u/s 148, she cannot now be permitted to raise legal challenges to reopening or factual 3 explanations regarding deposits. The DR supported the orders of the lower authorities.
We have carefully considered the rival submissions and examined the record. It is undisputed that the reopening was initiated on the allegation of deposits of Rs.70 lakhs, whereas the actual deposits, as found upon independent verification from the bank, were only Rs.16,00,000/-. This raises a serious question on the application of mind while recording reasons for reopening and granting approval u/s 151 of the Act. The issue of validity of reopening is a legal issue which goes to the root of the matter and can be raised at any stage.
10.1 At the same time, we find that the assessee remained largely non-compliant before the lower authorities, resulting in absence of a proper adjudication on facts as well as law. In the interest of justice, we consider it appropriate to set aside the impugned order and restore the matter to the file of the Assessing Officer.
10.2 The Assessing Officer shall re-examine the matter afresh, adjudicate all grounds including the legal ground challenging the reopening, and pass a speaking order in accordance with law. The assessee is directed to extend full cooperation and furnish necessary details and explanations in support of her case.
In the result, the appeal is allowed for statistical purposes.