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Facts
The assessee, proprietor of M/s Rashmi Traders, did not file an income tax return for AY 2017-18. The AO reopened the case under Section 147, treated cash deposits of Rs. 14,36,500 during demonetization as unexplained income under Section 69A, and initiated penalty proceedings.
Held
The Tribunal condoned the delay in filing the appeal due to the assessee's illness. Despite the assessee's non-compliance in the earlier proceedings, the Tribunal restored the appeal to the NFAC for a hearing on merits, granting one more opportunity to the assessee.
Key Issues
Whether the NFAC's ex-parte order dismissing the appeal for non-compliance was justified, and whether the assessee should be granted another opportunity to be heard on merits after condoning the delay.
Sections Cited
147, 148, 144, 144B, 69A, 115BBE, 271AAC(1), 271F, 250, 234A, 234B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVA
Assessment Year: 2017-18 Rajesh Kumar Tiwari v. Addl./Joint/Deputy/ACIT/ITO, Tharakki Patti NFAC, Delhi Gorwaghat, Gonda TAN/PAN:AJAPT7765Q (Appellant) (Respondent) Appellant by: None Respondent by: Shri Sunil Kumar Rajwanshi, D.R. Date of hearing: 03 03 2025 Date of pronouncement: 03 03 2025 O R D E R
This appeal has been preferred by the assessee against the order dated 06.06.2023, passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2017-18. a. The brief facts of the case are that the assessee, an individual, is proprietor of M/s Rashmi Traders, Godwaghat, Tharaki Pati, Gonda. The assessee did not file the return of income for the year under consideration. The Assessing Officer (AO), therefore, reopened the case of the assessee under section 147 of the Income Tax Act, 1961 (hereinafter called “the Act’) after issuing notice under section 148 of the Act. The assessee neither filed the return of income nor responded to the notice under section 148 of the Act. Thereafter, the AO issued statutory notices to the assessee, requiring the assessee to furnish the details relating to the cash deposits made by the assessee in his bank account during the demonetization period. However, there was still no compliance from the side of the assessee. The AO, therefore, 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 147 read with sections 144 and 144B of the Act, the AO treated the cash deposits of Rs.14,36,500/- made by the assessee in his bank account 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.
The Assessing Officer also invoked the provisions of section 115BBE of the Act and also initiated penalty proceedings under sections 271AAC(1) and 271F 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:
1. Because on a proper consideration of facts and circumstances of the case, it would be found that the order passed by the Ld. ITO NFAC, Delhi under section 147 is erroneous, prejudicial to the interest of the revenue, hence, the order passed under section 250 is bad in law and be quashed.
BECAUSE the Ld. Assessing Officer has erred in law and on facts in making addition and assessment at Rs.14,36,500/- i.e. cash deposited in bank during demonetization period out of sale proceeds, on the plea that assesse didn't response to notices while the fact is that the assesse is not computer friendly and never check SMS on mobile. Further no hard copy of notice was served to the assesse.
3. BECAUSE the Ld. Assessing Officer has erred in law and on facts in making assessment at Rs.14,36,500/-on account of cash deposits of Rs.14,36,500/- during the demonetization period. As amount deposited in bank was the sale proceeds of the business and the amount was sent to suppliers from the same account at time to time through bank, 04. BECAUSE the cash deposited during the demonetization period was only sale proceeds as the notes deposited in bank were not demonetized. Details are as under:- 11-11- DATE 2016 21-11-2016 07-12-2016 27-12-2016 29-12-2016 DENOMI NATION Pieces Amount Pieces Amount Pieces Amount Pieces Amount Pieces Amount 500 (New 50 25000 100 50000 30 15000 0 0 0 0 notes) 100 3000 300000 2500 250000 1850 185000 200 20000 200 20000 50 1500 75000 5000 250000 1200 60000 0 0 0 0
20 2000 40000 2600 52000 2000 40000 0 0 0 0 10 600 6000 3800 38000 1050 10500 0 0 0 0 640000 310500 446000 20000 20000 TOTAL 1436500
5. BECAUSE the Ld. Assessing Officer has erred in making assessment u/s 69A of Income Tax Act, 1961, while section 69A under which addition made is not applicable to assessee. 06. BECAUSE the Ld. Assessing Officer has erred in tax calculation u/s 115BBE while section 69A under which addition made is not applicable. 07. BECAUSE the Ld. Assessing Officer has erred in fact and in law in making the assessment order without giving the reasonable opportunity of being heard. 08. BECAUSE the Ld. Assessing Officer has erred in interest calculation as interest should not be calculated u/s 234A and 234B of Income Tax Act, 1961. 09. BECAUSE the order of Ld. Assessing Officer is arbitrary, misconceived and against law of natural justice. 10. BECAUSE the order is erroneous and bad in law and on facts. 11. BECAUSE the appellant craves leave to add, modify or withdraw any ground of appeal with the kind permission of your honour.
None was present on behalf of the assessee when the appeal was called out for hearing nor was any adjournment application moved in this regard. However, looking into the facts of the case, I proceed to adjudicate the appeal ex-parte qua the assessee.
During the course of hearing, it was brought to my notice that there is a delay of 433 days in filing the appeal before the Tribunal. The assessee has filed an application dated 20.01.2025 for condonation of delay duly supported by an Affidavit and Medical Certificate, stating therein that the assessee was ill during the relevant period. Therefore, the appeal could not be filed within the stipulated period. It has been prayed that the delay be kindly condoned.
The Ld. Sr. D.R. had no objection to the delay being condoned.
In view of the prayer made by the Assessee and no objection by the ld. D.R., I condone the delay in filing of the appeal and admit the appeal for hearing.
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 the Ld. Sr. D.R. 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. I 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 shall 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 03/03/2025.