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Facts
The assessee challenged the CIT(A)'s ex-parte order confirming the addition of Rs. 12,60,500 as income from undisclosed sources. The addition was made by the AO for AY 2010-11 after the assessee failed to file a return and explain cash deposits in his bank account. The assessee claimed the deposits were from business receipts.
Held
The Tribunal condoned the delay in filing the appeal, admitted additional evidence, and set aside the matter to the AO. The AO is directed to tax the correct income considering the nature of the assessee's business and to assist the assessee in surrendering the second PAN.
Key Issues
Whether the assessee had sufficient cause for the delay in filing the appeal and whether the additional evidence submitted by the assessee should be admitted for fresh adjudication.
Sections Cited
147, 148, 143(3), 144, 139(1), 142(1)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 42/JP/2025
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 42/JP/2025 fu/kZkj.k o"kZ@Assessment Year : 2010-11 cuke Arjun Singh Meena ITO, Vs. Byadwal Villa, Opp. Sahara City Ward-07(2), Main Tonk Road, Jaipur Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AMKPV9736A vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Yogesh Kumar Sharma, Adv. jktLo dh vksj ls@ Revenue by : Sh. Gautam Singh Choudhary, JCIT lquokbZ dh rkjh[k@ Date of Hearing : 03/04/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 17/04/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM
By way of present appeal, the assessee challenges the order of learned National Faceless Appeal Centre, Delhi dated 01/02/2024 [ for short CIT(A)] for assessment year 2010-11. The said order of the ld. CIT(A) arise as against the order dated 01.12.2017 passed under section 144/147 of the Income Tax Act, 1961 [ for short Act ] by ITO, Ward-7(2), Jaipur [ for short AO].
261 days in filing of the appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay with following prayers:
“Most Respectfully Showeth:
1. 1. The appellant submits that the impugned order of the Commissioner of Income Tax (Appeals) was passed on 01/02/2024. However, the appellant did not receive any physical copy of the order at the relevant time.
2. The appellant, being an individual without in-depth knowledge of the fax laws and procedures, was unable to comprehend the technicalities of the appellate process and the timelines involved. Furthermore, the appellant was under the belief that his tax practitioner was handling the matter, including the status of the appeal and any follow-up required. Unfortunately, the tax practitioner failed to inform the appellant about the finalization of the appeal order or the need for further action.
3. The appellant came to know about the disposal of the appeal and the finalization of the order only on 26.12.2024. Upon learning of the situation, the appellant immediately sought assistance from another professional to understand the implications of the order and file the necessary appeal.
4. The delay in filing the present appeal is neither deliberate nor intentional but purely due to the appellant's lack of awareness about the finalization of the appellate order and the failure of the earlier tax practitioner to communicate the status.
5. Once the appellant became aware of the oversight, immediate steps were taken to rectify the situation. Realizing the need to file the appeal, the appellant promptly engaged new legal counsel and filed the appeal before the Hon'ble Tribunal.
6. The Hon'ble Supreme Court, in the case of Collector, Land Acquisition v. Mat. Katiji (167 ITR 471), has emphasized that substantial justice should not be denied due to technical delays, especially when the delay is bona fide and caused by circumstances beyond the appellant's control.
7. This situation encompasses instances where the appellant, due to a lack of expertise. relied on professionals who may have falled in their duties, resulting in a delay of 291 days. There was "sufficient cause" for such a delay. Such delays Arjun Singh Meena vs. ITO may be condoned, especially when there is no evidence of deliberate inaction or negligence on the part of the appellant.
The appellant humbly submits that the delay has caused no prejudice to the respondent, as the appeal is being filed to address the genuine grievance of the appellant regarding the addition of ₹12,60,500 as Income from undisclosed sources, which the appellant firmly asserts is from disclosed and legitimate business activities.
It is respectfully prayed that the Hon'ble Tribunal be kind enough to take a liberal and justice-oriented approach in condoning the delay and permit the appellant to pursue the appeal on merits in the interest of justice. Prayer: The appellant, therefore, humbly prays:
1. 1. That the Hon’ble Tribunal may kindly be pleased to condone the delay of 291 days in filing the appeal.
2. That the Hon’ble Tribunal may pass such orders as it deems fit and proper in the interest of justice.
3. While hearing the ld. AR of the assessee also submitted that the assessee was also in dilemma that as he was having two PAN one is regular in use and other not used. Thus, in absence of the proper advice there was delay in filling the present appeal.
4. Per contra, ld. DR submitted that the reasons advanced are not sufficient to condone the delay as the same are very common.
At the same time the fact of the case that the assessee is having two PAN is not disputed.
We have heard the contention of the parties and perused the materials available on record. We note that the assessee has two even after the receipt of the order which was not served physically and assessee is competent to the user of the technicality of the Income tax online filling procedure. Considering the overall facts we hold that the assessee was having sufficient reasons and thereby we condone the delay in filling the present appeal.
Having condone the delay we proceed to deal with the appeal of the assessee on its merits. Succinctly, the fact as culled out from the records is that in this case there was information on records that the assessee had made cash deposits of Rs. 12,60,500/- in the saving Bank account maintained with Axis Bank Ltd., Pratap Nagar, Jaipur. As per record of AO reveals that the assessee has not filed his return of income for the Assessment Year 2010-11 u/s 139(1) of the Act and therefore, a notice u/s 148 of the Act was issued to the assessee on 22.03.2017 after recording reasons for escapement of income and necessary approval were obtained to reopen the case of the assessee. The assessee has not filed any compliance in response to notice u/s 148 of the Act and thereafter notice issued u/s 142(1) of the Act was issued to the assessee.
Since there was non compliance on the part of the assessee ld. AO proceeded to finalize the assessment ex-parte u/s 144 of the Act to the the assessee failed to explain the source of cash deposit of Rs. 12,60,500/-, the same were treated as undisclosed income of the assessee and thereby the same was determined as per provisions of section 144/147 of the Act and thereby the order was passed on 01.12.2017.
7. Aggrieved from the order of the Assessing Officer, assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised, ld. CIT(A) disposed of the appeal of the assessee ex-parte because out of four notices issued to the assessee the assessee responded to only one notice and that is also filing the adjournment application. Therefore, the case of the assessee was dismissed confirming the view of the Assessing Officer by ld. CIT(A), the relevant finding of the ld. CIT(A) is reiterated here in below:
“7. DECISION: - Since the appellant has not made any written submission during the course of these proceedings, the appeal is decided on the basis of the details as provided in the Form no. 35 filed by the appellant, the assessment order and other material available on record.
7.1 Ground no. 2 & 3: - Since these grounds are with regard to procedural aspect, they are taken together for adjudication. These are general grounds taken by the appellant with regard to lack of opportunity of being heard during the assessment proceedings and non-service of notice. Notwithstanding the fact that these are totally unsubstantiated claims, there is nothing on record to show Arjun Singh Meena vs. ITO that the appellant was not provided due opportunity to present his case during the assessment proceedings. The assessment order has details of the notices issued u/s 148 and 142(1) of the Act of various dates, and opportunities provided to the assessee. Without prejudice to the above, even if for the sake of argument, it is assumed that he was not provided a proper chance to represent his case, he had more than ample opportunities during the appellate proceeding for the same, which he has not availed. In light of the above, Grounds 2 and 3 are dismissed.
7.2 Ground no. 1, 4 & 5: These grounds are with regard to the merits of the case and the addition of Rs.1260500/- as unexplained cash deposits in the assessment order. It is seen from the assessment order that the case was flagged on account of cash deposits in the bank account held by the assessee and the fact that he was a non-filer. During the course of assessment proceedings, the Assessing officer through various notice issued u/s 142(1) of the Act, inquired about the source and nature of these cash deposits amounting to Rs. 12,60,500/-and also called for filing of return of income. The assessee did not respond to any of the notices, nor made any submission before the AO. In the absence of any explanation from the assessee and also the fact that no return of income was filed in response to notice u/s 148 of the Act, the AO added back the cash deposit amounting to Rs. 12,60,500/- in the bank account held with Axis Bank, as being unexplained. 7.3 During the current proceedings, the appellant has made no written submission in response to several notices issued. The appellant in his grounds has claimed that the cash deposits are out of business receipts. However, he has not provided any details of the nature of business and the receipts thereof. He has simply attached banks statements of Axis Bank, which is already a matter on record. Since the appellant has not produced even of an iota of evidence to explain the source and nature of the cash deposits, I see no reason to interfere with the order of the Assessing officer. The onus squarely lies on the appellant to explain the cash deposits in his bank account. In light of the above discussion, I hereby confirm the addition of Rs.12,60,500/- and Grounds 1, 4 and 5 are accordingly dismissed.
In the result, the appeal is dismissed.” appeal before this tribunal raising therein the following grounds of appeal:-
1. Because the AO arbitrarily added Rs. 12,60,500 as income from undisclosed sources without making proper inquiries or verifying the appellant's claim that the amount was generated from construction business activities.
2. Because the appellant had submitted bank statements indicating the cash deposits, which the AO and CIT(A) failed to correlate with business receipts. Non-consideration of this evidence has led to an erroneous conclusion.
3. Because the notices under sections 142(1) and 148 were not properly served, and the appellant was thus unable to respond within the stipulated time.
4. Because the AO erred in passing the assessment order ex parte without providing the appellant adequate opportunity to present his case and substantiate the sources of cash deposits. This is in violation of the principles of natural justice.
5. Because the appellant was not liable to file an income tax return for the relevant year as his income, excluding the impugned cash deposits, was below the taxable threshold.
6. Because the CIT(A) dismissed the appeal without considering the appellant's adjournment request or granting sufficient time for submission of evidence.
Because the addition made by the AO is excessive, arbitrary and based on mere assumptions, without any corroborative evidence.
9. In support of grounds so raised, ld. AR of the assessee filed following records with a prayer to admit those additional evidence and thereby prayed that considering the nature of services being contractual work carried out by the assessee the income of the assessee be determined in accordance with Presumptive Taxation Scheme of the Act.
Ld. AR of the assessee also filed the written submissions in support of the below:
“Your Appellants submit the following Statement of Facts of Appeals in respect of our appeal-
Statement of Facts
1. That the appellant is an individual engaged in construction business activities. For the Assessment Year 2010-11, the appellant did not file a return of income due to a belief that his income was below the taxable limit.
2. That the Assessing Officer (AO) initiated reassessment proceedings under section 147/148 of the Income Tax Act, 1961, based on information about cash deposits of Rs. 12,60,500 in the appellant's savings bank account.
3. That on 01.12.2017 an ex parte order under section 144 was passed by the assessing officer, adding the entire cash deposit of ₹12,60.500 as income from undisclosed sources.
That the appellant contested the AO's order, claiming that the cash deposits represented receipts from construction business. The Ld. Commissioner of Income Tax (Appeals) dismissed the appeal on 01.02.2024 on grounds of non- compliance and lack of evidence supporting the appellant's claims.
5. The appellant is now appealing to the Hon'ble ITAT on both procedural and substantive grounds, seeking relief against the addition of ₹12,60,500.
Grounds of Appeal
1. Because the AO arbitrarily added Rs. 12,60,500 as income from undisclosed sources without making proper inquiries or verifying the appellant's claim that the amount was generated from construction business activities.
In this consonance, the detailed bifurcation of Rs. 12,60,000 is as follows-
S. Sources of cash Deposit Amount Attachment as No. evidences 1 Sales Invoices-construction business 7,04,799 sales invoices with activities sales ledger is attached herewith Annexure-1 and 2 2 Opening Cash Balance of construction 2,05,900 Cash Book is Business as on 01.04.2009 attached herewith as Annexure-4 3 Cash withdrawal during the considering 3,49,801 Cash book is attached year which was deposited again in the herewith as considering year Annexure-4 In this context, the Copy of the sales Invoices with Sales Ledger is attached herewith Annexure-1 and 2 for your kind consideration. Copy of the Bank statement is attached herewith as Annexure-3. Copy of cash Book is attached herewith as Annexure-4 for your kind consideration.
2. Because the appellant had submitted bank statements indicating the cash deposits, which the AO and CIT(A) failed to correlate with business receipts. Non-consideration of this evidence has led to an erroneous conclusion.
3. Because the notices under sections 142(1) and 148 were not properly served, and the appellant was thus unable to respond within the stipulated time.
4. Because the AO erred in passing the assessment order ex parte without providing the appellant adequate opportunity to present his case and substantiate the sources of cash deposits. This is in violation of the principles of natural justice.
5. Because the appellant was not liable to file an income tax return for the relevant year as his income, excluding the impugned cash deposits, was below the taxable threshold.
6. Because the CIT(A) dismissed the appeal without considering the appellant's adjournment request or granting sufficient time for submission of evidence.
7. Because the addition made by the AO is excessive, arbitrary, and based on mere assumptions, without any corroborative evidence. Prayer The appellant respectfully prays that the Hon'ble ITAT may:-
Quash the assessment order under section 144 and the addition of ₹12,60,500.
Alternatively, remit the matter back to the AO for fresh consideration after providing adequate opportunity to the appellant to furnish supporting evidence.
Grant any other relief that the Hon'ble ITAT may deem fit in the interest of justice.
To support the contention so raised in the written submission reliance was placed on the following evidence / records:
S. No. Particulars Page No. 1 Written submission 1-2 2 Annexure/Documents Annex-1 Copy of the Sales Invoices 3-54 Annex-2 Copy of the Sales Ledger 55-56 Annex-3 Copy of the Bank Statement 57-59 Annex-4 Copy of the Cash Book 60-66
Ld. AR of the assessee also submitted that the assessee was having two PAN and even the appeal has been filed in new PAN as the assessee is not using old PAN wherein the demand has been raised that should be come in the way in resolving the tax dispute. The assessee being very small person and reasons for non compliance also on account of the two PAN by the assessee. As he intend to continue with new PAN he prayed that the ld. AO be directed to assist the tax payer in the matter
Per contra, ld. DR objected to the additional evidence filed by the ld. AR of the assessee but at the same time did not object to the prayer of the assessee to set aside the matter to the file of the ld. AO to determine the income in accordance with Presumptive Taxation Scheme of the Act.
In the rejoinder, ld. AR of the assessee submitted that the assessee deposited cash and withdrawal suggest that the assessee is engaged in the contract work in filing an additional evidence he also support his contention of the fact that he has undertaken contract work for on behalf of the various persons and the confirmation of the following persons were filed:-
• Banwari Balai S/o Satya Narayan Balai • Kailash Chand Meena S/o Chauth Mal Meena • Ashok Vishnoi S/o Banwari Lal Bishnoi • Chandra Mohan Chauravat S/o Ramphool Chauravat
We have heard the rival contentions and perused the material placed on record. The bench noted that apple of discord in this case is deposit of cash and the assessee could not explain the source of same When the matter carried before the ld. CIT(A) the same was also exparte.
Thus, the assessee has placed additional evidence before this tribunal as it is the final fact-finding appellate authority. We have gone through the contention for filling the additional evidence and prayer by the assessee and we are of the view that the assessee has sufficient reasons and therefore, the additional evidence filled by the assessee are required to be admitted in the interest of principles of natural justice. Thus, bench is of the view that the lis between the parties must be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Considering that aspect of the matter we admit the additional evidence on record and set aside the matter to the file of the ld. AO to tax the correct income in hands of the assessee after considering the nature of service / business done by the assessee in accordance with the law as the assessee contended that he is small contractor and his activity is also at much lower level. As regards having the two PAN the assessee is directed surrender the second PAN which he do not want to use and the ld. AO will do the needful in that matter also and pass the order in the set aside proceeding in accordance with law after providing proper opportunity to the assessee. purposes.
Order pronounced in the open court on 17/04/2025. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 17/04/2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Arjun Singh Meena, Jaipur izR;FkhZ@ The Respondent- ITO, Ward-7(2), Jaipur 2. vk;dj vk;qDr@ The ld CIT 3. 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZ QkbZy@ Guard File (ITA No. 42/JP/2025) vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेज. त्महपेजतंत