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Facts
The assessee filed his return declaring income of Rs.2,75,590/- and agricultural income. The case was selected for limited scrutiny due to cash deposits during demonetization. The AO added Rs.13,96,450/- as unexplained money under Section 69A and completed the assessment.
Held
The Tribunal condoned the delay in filing the appeal, noting the assessee's explanation of residing in a rural area and lack of conversancy with tax procedures. The appeal was restored to the NFAC for adjudication on merits.
Key Issues
Whether the NFAC was justified in dismissing the appeal ex-parte, and whether the delay in filing the appeal should be condoned to allow adjudication on merits.
Sections Cited
143(2), 142(1), 133(6), 69A, 143(3), 115BBE, 271AAC, 234A, 234B, 272A(1)(d)
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Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2017-18 Dharamveer v. Income Tax Officer R/o Mohalla Bakhtawar Lal Ward 2(4) Barah Patthar Chauraha Pilibhit-1 Tehsil Bisalpur Pilibhit TAN/PAN:AMVPD5162F (Appellant) (Respondent) Appellant by: Shri Veerender Kumar, Advocate Respondent by: Shri Sunil Kumar Rajwanshi, D.R. Date of hearing: 04 03 2025 Date of pronouncement: 11 03 2025 O R D E R
This appeal has been preferred by the assessee against the order dated 23.02.2023, passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2017-18.
The brief facts of the case are that the assessee filed his return of income for the year under consideration on 24.03.2018, declaring a total income of Rs.2,75,590/- and agricultural income of Rs.1,52,500/-. The case of the assessee was selected for Limited Scrutiny under CASS to examine the issue of cash deposit during the demonetization period. The AO issued notices under sections 143(2) and 142(1) of the Income Tax Act, 1961 (hereinafter called “the Act’), but there was no compliance from the side of the assessee. The Assessing Officer (AO), therefore, called for information, with regard to cash deposits by the assessee during the demonetization period, from Baroda Uttar Pradesh Gramin Bank, Bisalpur, Pilibhit under section 133(6) of the Act. As per the information received under section 133(6) of the Act, the assessee had made total cash deposits of Rs.13,96,450/- during the demonetization period. Since the assessee failed to offer any explanation with regard to the aforesaid cash deposits, the AO treated the cash deposits of Rs.13,96,450/- as unexplained money of the assessee and added the same to the income of the assessee under section 69A of the Act. The AO completed the assessment 143(3) of the Act, assessing the total income of the assessee at Rs.16,72,040/-.
2.1 The Assessing Officer also invoked the provisions of section 115BBE of the Act and also initiated penalty proceedings under section 271AAC of the Act.
Aggrieved, the Assessee preferred an appeal before the NFAC. However, the appeal before the NFAC came to be dismissed for the reason of non-compliance by the Assessee.
Now, the Assessee has approached this Tribunal challenging the action of the NFAC by raising the following grounds of appeal:
That Ld. CIT(A) is erred in law and on facts while dismissing the Grounds of appeal
and in upholding the validity of order dated 23.12.2019 u/s 143(3) passed by Assessing Officer(A.O.).
2. That on facts and in the circumstances, the order dt 23.12.2019 passed by Assessing Officer u/s 143(3) is bad both in the eye of law and on facts.
3. That the Assessing Officer has erred in law as well as in facts in treating the entire cash deposit of Rs.13,96,450/- as unexplained money u/s 69A of the I.T. Act, 1961 and in adding back to the total income of the appellant/ assessee.
4. That Assessing Officer has erred in law as well as in facts in levying the highest tax u/s 115BBE of the I.T. Act, 1961.
5. That the on the facts and in the circumstances Assessing Officer has erred both in law as well as in facts in charging interest under section 234A and 234B of the I.T. Act, 1961.
6. That on the facts and in the circumstances Assessing Officer has erred in law as well as in facts both by imposing the penalty under section 271AAC(1) and u/s 272A(1)(d) of the I.T. Act, 1961.
The Ld. Authorized Representative for the assessee submitted that there is a delay of 647 days in filing the appeal before the Tribunal. He further submitted that the assessee had filed an application dated 28.01.2025 for condonation of delay, duly supported by an Affidavit, stating therein that the assessee was residing in a rural area and was not conversant with the provisions and procedures of the Income Tax Act, the appeal could not be filed within the stipulated period. He prayed that the delay be kindly condoned.
The Ld. D.R. had no objection to the delay being condoned.
In view of the prayer made by the Assessee, duly supported by an Affidavit and no objection by the Ld. D.R., I condone the delay in filing of the appeal and admit the appeal for hearing.
The ld. Authorized Representative for the Assessee submitted before me that the NFAC was not justified in dismissing the appeal of the Assessee by passing an order ex- parte qua the Assessee. The Ld. A.R. further submitted that since the assessee was residing in a rural area, the assessee could not be represented before the ld. CIT(A). The ld. AR prayed that the Assessee’s appeal may be restored to the file of the NFAC for the purpose of adjudication on merits.
Since the order passed by NFAC was an ex-parte order, the ld. Senior D.R. had no objection to the restoration of appeal to the NFAC.
I have heard both the parties and have also perused the material on record. It is evident that there was complete non- compliance on the part of the Assessee during the course of first appellate proceedings. However, looking into the facts of this case, I am of the considered view that the Assessee deserves one more opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the NFAC with the direction to hear the appeal on merits. We also caution the Assessee to fully comply with the notices and directions of the NFAC in the set-aside proceedings when called upon to do so, failing which, the NFAC would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.
In the result, the appeal of the Assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 11/03/2025.