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Facts
The assessee filed an appeal against the order of the CIT(A) upholding the Assessing Officer's (AO) decision to treat cash deposits made during demonetization as unexplained income and estimated business income. The assessee had failed to provide satisfactory explanations or evidence to the AO and CIT(A).
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A) based on Supreme Court rulings regarding the COVID-19 pandemic. The Tribunal held that the matter was not properly examined on merits and restored it to the Assessing Officer for fresh assessment, emphasizing the need to consider the assessee's role as a business correspondent.
Key Issues
Whether the cash deposits made during the demonetization period are unexplained income and whether the appeal delay before CIT(A) should be condoned based on the Supreme Court's decision.
Sections Cited
69A, 144, 143(2), 142(1), 249(2), 115BBE, 271AAC, 270A, 272A(1)(d)
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Furthermore, we also find that the assessee’s counsel had passed away, and the assessee had not received any intimation of the order passed by the Assessing Officer. We find merit in the submission of the assessee. The Hon’ble Supreme Court, by invoking its powers under Article 142 read with Article 141 of the Constitution, has held that in computing limitation, the period from 15.03.2020 to 28.02.2022 shall stand excluded. Even if the appeal was filed belatedly, a substantial part of the delay stands covered by the extended limitation granted by the Hon’ble Apex Court.
In the present case, the Ld. CIT(A) had not only dismissed the appeal on account of delay but also decided the grounds raised by the assessee without referring to any documents or submissions made. It has come on record that the assessee was functioning as a Business Correspondent Agent with Punjab National Bank, and therefore, it is preposterous for the lower authorities to have taxed the entire deposit in the settlement account as income of the assessee. We do not countenance such an approach and strongly disapprove the mechanical treatment of the case without verifying the factual nature of the transactions. Accordingly, we hold that the delay in filing the appeal before the CIT(A) stands condoned, in light of the above binding judgment of the Hon’ble Supreme Court.
6 Since the matter has not been properly examined on merits and no opportunity 14. was given to produce supporting documents, we deem it appropriate to restore the matter to the file of the Assessing Officer. The AO shall provide the assessee a reasonable opportunity to present his case along with supporting evidence. The AO shall frame a fresh assessment in accordance with law after considering all relevant material, including the nature of the cash deposits, turnover, and the business correspondent relationship with the bank. It is clarified that nothing contained in the foregoing paragraphs shall be construed as an expression of opinion on the case's merits. The learned Assessing Officer shall decide the matter independently, in accordance with law, and uninfluenced by any observation made hereinabove.
The assessee is directed to extend full cooperation and file complete details 15. within the time prescribed. No unnecessary adjournments shall be sought. In case of failure to do so, the AO is at liberty to proceed in accordance with law on the basis of available material.