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Facts
The assessee's appeal was filed against an order pertaining to AY 2012-13. The appeal was initially barred by limitation. The assessee's original assessment was reopened under Section 148 based on cash deposit information, and the assessment was completed under Section 144 read with Section 147, treating cash deposits as unexplained income.
Held
The Tribunal condoned the delay in filing the appeal. While acknowledging the technical dismissal by the CIT(A) for non-compliance with Section 249(4)(b), the Tribunal found that the substantive issues were not adjudicated on merits. Therefore, the assessment order and the appellate order were set aside, and the matter was restored to the CIT(A) for denovo adjudication.
Key Issues
Whether the appeal, barred by limitation and technically dismissed by the CIT(A), should be adjudicated on merits after condoning the delay, and whether cash deposits in a bank account can be treated as unexplained income.
Sections Cited
144, 147, 148, 68, 69, 271(1)(c), 271(1)(b), 271F, 249(4)(b)
AI-generated summary — verify with the full judgment below
Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order passed by the Ld. CIT(A)/NFAC Delhi dt. 29/01/2024 pertaining to Assessment Year 2012-13. 2. At the outset the Registry has pointed out that the appeal is barred by limitation by 244 days.
3. After considering the condonation application filed by the assessee, we condone the delay for which sufficient cause is shown, and admit the appeal for adjudication.
4. In the present appeal Assessee has raised following grounds of appeal:
The Ld. Assessing Officer has wrongly frame d the assessment u/s 144 of the ACT.
Learned A.O has made lump sum addition Rs 8000000/ treating entire cash deposits as undis closed Income which is contrary to Law, as th e cash deposit in a bank account could not be tr eated a s taxable income u/s 69 of the Act.
That A.O. acting under information from inves tigation wing no independent application of m ind not amount to formation of belief. Is bad-i n-law.
That Ld. ITO has wrongly initiated penalty pro ceedings u/s 271(1)(c), 271(1)(b) AND 271F o f the Income Tax A ct,1961. 5. The Assessee reserves the right to amend, alter , add, and withdraw any ground of appeal
5. The facts of the case, in brief, are that the assessment was reopened under Section 148 of the Act based on AIR/CIB/NMS information regarding cash deposits in the assessee’s bank account. The assessment was completed under Section 144 read with Section 147 of the Act, treating total cash deposits of Rs.80,00,000/- as unexplained income under Sections 68 and 69 of the Act. The Ld. AO assessed the income and raised a demand of Rs.66,26,980/-.
5.1 It is the case of the assessee that due to the serious illness and subsequent unfortunate demise of her nephew Mr. Mukesh Kumar, she was under considerable mental stress and unable to effectively participate in the assessment proceedings or guide her authorized representative. This resulted in an ex parte assessment order being passed against her.
Aggrieved, the assessee filed an appeal before the CIT(A), which was dismissed on the ground of non-compliance with Section 249(4)(b) of the Act. It was noted that the assessee had neither filed her return nor paid the advance tax as determined by the AO. Despite deficiency notices issued in January 2024, no rectification or exemption request was filed by the assessee, leading to dismissal of the appeal in limine.
Aggrieved, the assessee filed an appeal before the CIT(A), which was dismissed on the ground of non-compliance with Section 249(4)(b) of the Act. It was noted that the assessee had neither filed her return nor paid the advance tax as determined by the AO. Despite deficiency notices issued in January 2024, no rectification or exemption request was filed by the assessee, leading to dismissal of the appeal in limine.
In the present appeal before us, the Ld. AR submitted that the circumstances leading to the assessee’s non-compliance were beyond her control and prayed for one final opportunity to present her case on merits. It was urged that justice would be better served by setting aside the assessment and providing the assessee a fair hearing.
Per contra, the Ld. DR opposed the request and submitted that repeated opportunities had already been granted at earlier stages, and the assessee’s failure to respond demonstrated non-cooperative conduct. It was argued that such conduct should not be lightly condoned and costs may be imposed if remand is considered.
We have heard the rival contentions and carefully perused the material available on record. While the technical dismissal under Section 249(4)(b) is legally sustainable, we find that the substantive issues raised in the assessment order have not been adjudicated on merits. In the interest of justice and fair play, and considering the claim of genuine hardship made by the assessee, we are of the considered view that the matter deserves a fresh look.
10.1 Accordingly, we set aside the assessment order and the appellate order and restore the entire matter back to the file of the Ld. CIT(A) for denovo adjudication. Ld. CIT(A) shall provide the assessee an opportunity to explain the source of cash deposits and other relevant matters. A reasoned and speaking order shall be passed after considering the submissions and evidence produced by the assessee. We also direct the assessee to comply with the applicable provisions of law for prosecuting the appeal before the Ld. CIT(A), including fulfilling the requirement of Section 249(4)(b) of the Act, if and when such appeal is revived or refiled. It is also expected that the assessee shall not seek undue adjournments and shall cooperate in the early disposal of the appeal.
10.2 We make it clear that all issues are kept open, and Ld. CIT(A) shall decide the matter independently without being influenced in any manner by any of the observations made by us in this order, which are only for the limited purpose of remand. However, taking note of the default in earlier proceedings and the judicial time consumed, we direct the assessee to deposit a cost of Rs.2,000/- (Rupees Two Thousand only) in the PM CARES Fund within 30 days from the date of this order. Proof of deposit shall be furnished to the AO during fresh proceedings.
10.3 The appeal is accordingly allowed for statistical purposes with the above directions.
In the result, the appeal of the Assessee is allowed for statistical purposes.