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Facts
The assessee failed to file an income tax return for AY 2017-18. The AO received information about cash deposits of Rs. 19,39,000/- in the assessee's bank account during the demonetization period and initiated assessment proceedings under section 144 of the Act.
Held
The Tribunal restored the case to the Assessing Officer for a fresh assessment, directing that the assessee be given a reasonable opportunity to present their case. The assessee was cautioned to comply with the AO's directions.
Key Issues
Whether the NFAC was justified in dismissing the appeal due to delay without providing an opportunity to be heard, and whether the AO provided adequate opportunity to the assessee during the assessment proceedings.
Sections Cited
144, 69A, 115BBE, 270A, 271AAC, 271F, 272A(1)(d)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year:2017-18 Kishan Kumar Vinod Kumar v. The Income Tax Officer 51/1, Ramganj Ward 1(1)(2) Kanpur (U.P) Kanpur TAN/PAN:AAFHK0124A (Appellant) (Respondent) Appellant by: Shri Rakesh Garg, Advocate Respondent by: Shri R.R.N. Shukla, D.R. O R D E R
This appeal has been preferred by the Assessee against the order dated 17.04.2025, passed by the National Faceless appeal Centre, Delhi (NFAC) for Assessment Year 2017-18.
2.0 The brief facts of the case are that the assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee had made cash deposits to the tune of Rs.19,39,000/- in his bank account No.01272320000027 maintained with HDFC Bank Limited, 15/63, Civil Lines, Kanpur during the demonetization period, i.e. from 09.11.2016 to 30.12.2016. The Assessing Officer (AO) issued statutory notices to the assessee, requiring the assessee to furnish the source of cash deposits in the above bank account. Since there was no response from the side of the assessee to the notices issued by the AO, the AO proceeded to complete the assessment on the basis of Best Judgment Assessment, after issuing show cause notice to the assessee. While completing the assessment under section 144 of the Act, the AO treated the cash deposits of Rs.19,39,000/- made by the assessee in his bank accounts during the demonetization period as his unexplained income and added the same to the total income of the assessee under section 69A of the Act.
2.1 The AO also called for information/details relating bank account No.01272320000027 of the assessee from HDFC Bank Limited, 15/63, Civil Lines, Kanpur. From the bank account statement furnished by the Bank, it was noticed that there was a total deposit of Rs.3,07,35,860/- in the year under consideration. The AO, after subtracting the amount of Rs.19,39,000/- (cash deposits during the demonetization period) from the total deposits of Rs.3,07,35,860/-, which came to Rs.2,87,96,860/-, treated the same as business receipts of the assessee for the year under consideration and after applying the rate of 8%, he estimated the business income of the assessee at Rs.23,03,748/- and added the same to the income of the assessee. The AO completed the assessment under section 144 of the Act, assessing the total income of the assessee at Rs.42,42,748/-.
2.2 The AO also invoked the provisions of section 115BBE of the Act and initiated penalty proceedings under sections 270A, 271AAC, 271F and 272A(1)(d) of the Act, separately.
2.3 Aggrieved, the Assessee preferred appeal before the NFAC, which dismissed the appeal of the assessee for the reason of there being a delay of 1675 days in filing of the appeal before the NFAC.
2.4 Now, the assessee has approached this Tribunal challenging the dismissal of his appeal by the NFAC by raising the following grounds of appeals:
1. Because the CIT(A) has erred on facts and in law in dismissing the appeal on account of delay in filing the same without giving any opportunity to explain the delay, the order passed is bad in law and be set aside.
Because the CIT(A) has erred on facts and in law in denying the opportunity of being heard to explain and substantiate the cause of delay in filing the appeal, the order passed by the CIT(A) is contrary to the provisions of law, the same be set aside.
Because the CIT(A) has failed to appreciate the facts of the case, in as much as, the appeal was filed late for the reasons that the PAN No. / Portal was blocked, for reasons of which the appeal could not be filed electronically whereas, the appeal was filed manually within the time as provided, the CIT(A) has failed to take cognizance of the same, the order passed by the CIT(A) is bad in law and be quashed.
4. Because the CIT(A) has failed to decide the appeal on merits of the case, which he ought to have done, there being no finding on the grounds raised on merits, the order passed by the CIT(A) is bad in law and be set aside.
3.0 During the course of hearing before me, the Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that the Ld. First Appellate Authority had dismissed the appeal of the assessee for the reason of delay of 1675 days in filing of the appeal before the Ld. First Appellate Authority and that the Ld. First Appellate Authority had not dealt with the issues in dispute on merits. The Ld. A.R. further submitted that the AO has not allowed adequate opportunity of being heard to the assessee and has passed the impugned assessment order under section 144 of the Act, without bringing on record any material in support of the additions which were made on the basis of presumption and surmises only. The Ld. A.R. prayed that the matter may be restored to the file of the AO for deciding the issues in dispute on merits of the case.
4.0 The Ld. Senior D.R. had no objection to the restoration of appeal to the file of the Assessing Officer as requested by the Ld. A.R.
5.0 I have heard both the parties and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the assessee deserves an opportunity to present his case and, therefore, I restore this file to the AO with a direction to frame the assessment afresh after providing reasonable opportunity of being heard to the assessee. I also caution the assessee to fully comply with the directions of the Assessing Officer in the set-aside proceedings when called upon to do so, failing which, the Assessing Officer would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.
6.0 In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 31/10/2025.