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Facts
The Assessing Officer (AO) initiated assessment proceedings against the assessee for AY 2017-18 after receiving information about a Rs. 10,00,000 deposit during demonetization. The assessee, an NRI residing in Italy, did not file a return, leading to an ex-parte assessment under Section 144.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A) due to the assessee's NRI status, non-receipt of notices, and the COVID-19 pandemic. On merits, it was held that the deposit was explained as a redeposit of cash withdrawn shortly before demonetization, not unexplained income.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal on grounds of delay without considering the merits, and if the cash deposit was an unexplained source of income.
Sections Cited
142(1), 144, 69A, 133(6)
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िनधा"रती क" ओर से/Assessee by : Ms. Komal Thakur, Advocate राज"व क" ओर से/ Revenue by : Shri Vivek Vardhan, Addl.CIT सुनवाई क" तारीख/Date of Hearing : 07/01/2025 उदघोषणा क" तारीख/Date of Pronouncement : 09/01/2025 आदेश/Order
PER VIKRAM SINGH YADAV, AM
This is an appeal filed by the Assessee against the order of the Ld. CIT, Appeal Addl/JCIT(A)-2, Jaipur pertaining to Assessment Year 2017-18.
Briefly the facts of the case are that the Assessing officer, basis receipt of information that the assessee has deposited a sum of Rs. 10,00,000/- during the demonetization period in his account maintained with SBI and since assessee did not file the return of income for the impugned assessment year, issued notice under section 142(1) of the Act to file return of income. However, there was no compliance on part of the assessee and thereafter, after issuing subsequent notices which also remained uncompiled with, the assessment was completed under section 144 wherein the amount of Rs. 10,00,000/- was brought to tax as unexplained cash deposit invoking the provisions of Section 69A of the Act.
Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A), however the appeal of the assessee was dismissed on account of delay in filing of the appeal without considering the merits of the case. Against the said order of the ld CIT(A), the assessee is in appeal before us.
During the course of hearing, the ld AR drawn our reference to the impugned order wherein at para 3, the Ld. CIT(A) has reproduced the assessee’s submission seeking condonation of delay and the same reads as under: "That the assessment in the case of the assessee has been framed vide order dated 24/12/2019 under Section 144 of the Income Tax Act, 1961 and the limitation for filling appeal against assessment order has been expired on 23/01/2020. That the appeal could not be filed within the stipulated period due to the reason that the assessee is a NRI Non- Resident Indian and at present, he is residing in Italy. That assessee is residing in Italy since 2001 which is also evident from the copy of passport. That due to the illness of his old parents in the year 2016 he came to India and thereafter on 22/08/2017 he went back to Italy. That all the notices regarding assessment proceeding were issued on web portal being the reason he was not aware about the assessment proceedings initiated against him. That he came to know about the passing of the order recently when penalty notice was issued which he received through e-mail. Thereafter he took immediate steps to get the appeal filed. The delay in filing of the appeal is neither intentional nor wilful, but had occasioned due to the reason aforementioned. That no prejudice shall be caused to the department if the delay is condoned whereas the appellant applicant shall suffer irreparable loss. That being the case, it is therefore most respectfully prayed that delay of 349 days in filing of the appeal be condoned and appeal to be heard on merit."
It was submitted that the Ld. CIT(A) has failed to appreciate the reasons so given seeking condonation of delay and has dismissed the appeal of the assessee. It was submitted that the AO was never served any notices and the assessment order as the assessee is an NRI person residing in Italy since 2001 and copy of his passport were also submitted before the lower authorities. It was submitted that besides the fact that the assessee didn’t receive the notices and the assessment order, there was outbreak of Covid which also prevented the assessee in timely filing of the appeal. It was submitted that since the assessee was not in receipt of the order and only came to know of passing of the order when penalty notice was issued, he took the immediate steps to get the appeal filed and therefore there was sufficient cause for the delay in filing of the appeal which may be condoned and appeal be heard on merit.
It was further submitted that due to illness of his old parents, the assessee came to India in the year 2016 and had withdrawn a sum of Rs. 10,00,000/- from the SBI Account on 05/11/2016, thereafter the demonetization was announced by the Government on 08/11/2016 and therefore, the assessee was forced to redeposit the amount so withdrawn on 10/11/2016 and in support, copy of the bank statement has been placed on record. It was accordingly submitted that the source of deposit of cash during the demonetization period was out of the cash withdrawal made few days back and which has not been appreciated by the lower authorities. It was submitted that even though the assessee could not appear before the AO as he was not present in the country, however the AO sought information from the bank under section 133(6) and from the perusal of the bank statement itself, it is evident that there is cash withdrawal so made from his account on 05/11/2016 and therefore there is no basis to hold that the amount of cash deposit is out of unexplained sources. It was further submitted that since the bank statement is already on record and it is evident from the said bank statement that there is withdrawal made few days prior to the date of deposit, the matter may be decided instead of remitting the same back to the file of the AO and necessary relief be provided to the assessee.
Per contra, the Ld. DR is relied on the order of the lower authorities.
I have heard the rival contentions and purused the material available on record. Firstly, on condonation of delay in filing the appeal before the ld CIT(A), I find that the assessee has demonstrated sufficient cause for the delayed filing of appeal due to non- receipt of the assessment order as he was not physically present in the country and being based out of Italy since 2001 duly supported by the copy of the passport and due to outbreak of Covid pandemic and the delay so happened is hereby condoned. On merits, on perusal of the bank statement available on record, I find that there is an entry for cash withdrawal of Rs 10 lacs on 05/11/2016 and thereafter, subsequent entry of cash deposit of Rs 10 lacs on 10/11/2016 within a short period of five days of the withdrawal so made and find force in the explanation so furnished on behalf of the assessee that due to announcement of the demonetization of the specified bank notes, the assessee was left with no option but to redeposit the amount so withdrawn earlier and the source of deposit of cash during the demonetization period was thus out of the cash withdrawal made few days back. In light of the same, the addition so made and sustained by the ld CIT(A) is hereby directed to be deleted.
In the result, the appeal of the assessee is allowed.