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Facts
The assessee, a partner in a jewelry business, filed an income return for AY 2017-18. The case was selected for scrutiny, and an addition of Rs. 51,57,000/- was made for unexplained cash deposits under Section 69A of the Act. The assessee failed to provide satisfactory explanation or evidence for these deposits.
Held
The Tribunal condoned the delay in filing the appeal, acknowledging the applicant's senior citizen status and a miscommunication issue. However, the grounds of appeal challenging the addition and ex-parte order were largely dismissed or found not maintainable.
Key Issues
Whether the delay in filing the appeal can be condoned, and whether the addition for unexplained cash deposits and the ex-parte order passed by the authorities were justified.
Sections Cited
144, 271AAC(1), 250, 69A, 115BBE, 234A, 234B, 234C, 142(1), 250, 251
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”B” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 1435/JPR/2024
fu/kZkj.k o"kZ@Assessment Years : 2017-18 Sushila Devi Ladiwala cuke The ITO, 51, Janpath, Greater Kailash Vs. Ward-6(2), Colony, Lal Kothi, Jaipur, Jaipur. Dwarkapuri, Rajsthan. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABZPL4016H vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Mrs. Uma, Adv. ( Th. V.C.) jktLo dh vksj ls@ Revenue by : Mrs. Swapnil Parihar, JCIT-DR a lquokbZ dh rkjh[k@ Date of Hearing : 24/02/2025 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 03/04/2025 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M.
This appeal is filed by the assessee against the order of the Ld. CIT(A), National Faceless Appeal Centre, Delhi dated 30.03.2024 [hereinafter referred as “CIT(A)/NFAC”] for the assessment year 2017- 18, which in turn arise from the order dated 11.12.2019 passed under section 144 of the Income Tax Act, [hereinafter referred as “Act” ] by the AO.
Sushila Devi Ladiwala, vs. ITO 2.1 At the outset of hearing, the Bench observed that there is delay of 181 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 and the assessee to this effect also filed an affidavit :-
“1. This is an application for the condonation of delay in filing an appeal before Hon'ble Tribunal against the order passed on 30.03.2024 under Section 250 of the Income Tax Act, 1961 for the Assessment Year 2017-18 passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre.
That present appeal has been filed on 28.11.2024, resulting in a delay of 181 days in filing the appeal.
The applicant is a senior citizen, aged 66 years, who had engaged a consultant to handle her pending income tax matters. That the applicant has registered the email of her son on the Income Tax portal 4. Recently, the applicant's son has received the show cause notice on his email for the penalty proceedings under section 271AAC(1) of the Act for AY 2017-18 on 13.11.2024. After discussing the matter with the applicant, he immediately forwarded the notice to the consultant. The consultant informed that CIT(A) order dated 30.03.2024 for AY 2017-18 is appearing on the portal in connection of which the penalty notice has been issued.
That upon inquiry by the consultant, the applicant's son checked his email account and discovered that the relevant notices and orders had been received earlier but were inadvertently overlooked due to his infrequent email usage 6. That the consultant accordingly advised the applicant to immediately file the appeal against the CIT(A) order before Hon'ble ITAT Bench 7. That as advised by the consultant, the applicant took immediate steps to file the appeal before the Hon'ble ITAT and the appeal was filed on 28.11.2024.
8. That consequently, your honours there is a delay of 181 days in filing the appeal, which a unintentional and beyond the control of the applicant To this effect, the assessee has filed an affidavit as to the condonation of delay in filing the appeal.
Sushila Devi Ladiwala, vs. ITO 2.2. During the course of hearing, the ld. DR objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deem fit and proper in the interest of justice.
2.3 We have heard the contention of both the parties and perused the materials available on record. The prayer as mentioned above by the assessee for condonation of delay of 181 days has merit for the reason that there was miscommunication resultantly delay and we concur with the submission of the assessee. Thus the delay of 181 days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause.
3. The assessee has raised following grounds:- “1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre (CIT(A), ITD, NFAC] is bad both in the eye of law and on facts.
2. On the facts and circumstances of the case the learned CIT(A), ITD has erred both on facts and in law in passing the order exparte without providing the assessee reasonable opportunity of being heard violating the principle of natural justice.
3. On the facts and circumstances of the case the learned CIT(A), ITD has erred both on facts and in law in confirming the addition of Rs. 51,57,000/- on account of cash deposit invoking the provisions of section 69A r.w.s 115BBE of the Act.
4. On the facts and circumstances of the case, the learned CIT(A), ITD has grossly erred both on facts and in law in confirming the abovesaid addition by indulging in surmises without bringing on any direct evidence against the assessee, only on the basis of presumption and assumption.
5. That the appellant craves leave to add, amend or alter any of the grounds of appeal.”
4. The brief facts of the case are that the assessee is a partner of partnership firm M/s M.M. Ladiwala Jwellers which deals in the business of god jwellery. The assessee had filed its return of income for A.Y. 2017-18 on 29.01.2018 declaring a total income of Rs. 6,03,460/-. The case was selected for scrutiny and the assessment was finalised making an addition of Rs. 51,57,000/- as unexplained cash u/s 69A of the Act. Aggrieved with this decision, the assessee preferred appeal.
5. Aggrieved from the order of AO, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:-
“5. The issues were considered. Relevant assessment order, statement of facts and grounds of appeal were carefully perused. On perusal of the assessment order and the statement of facts filed by the Appellant, it is found that the issue in dispute in the impugned appeal concerns addition under Section 69A of the Act of Rs. 51,57,000/- in respect of cash deposited during the year under consideration. It is further evident from the assessment order that the notice under section 142(1) of the Income Tax Act, 1961 was issued to the appellant on 03.10.2019 and 04.11.2019 asking the appellant to file details Sushila Devi Ladiwala, vs. ITO /information /documents. However, the appellant did not filed any response. Therefore, the appellant failed to explain the nature and source of the cash deposits to the satisfaction of the AO. Also, the primary onus cast on the appellant was not discharged by the appellant.
5.1 During the appellate stage, the appellant has not provided any written submissions in support of the grounds of appeal or the statement of facts. It is evident from the assessment order that significant cash deposits were made during the year under consideration. The appellant asserts that these deposits primarily are from cash sales of their products, citing the prevalence of cash- based transactions in the areas of operation, However, the appellant has failed to adequately explain the source of cash received during the year.
5.2 After due consideration of all the facts available on record, it has been categorically stated by the AO in the assessment order that the nature and source of the cash deposits made in the bank accounts during the year under consideration were not at all explained. The appellant failed to offer an explanation to the satisfaction of the AD or furnish any supporting evidence such as stock register, delivery of goods etc. Accordingly, the AO invoked the provisions of section 694 of the Income Tax Act and treated the amount of cash deposit of Rs. 51,57,000/-as unexplained money.
5.3 At the appellate stage, the appellant has not furnished any written submission in support of his claim. No arguments have been advanced by him in his statement of facts and grounds of appeal to rebut the applicability of the deeming provisions by the AO. The appellant has chosen not to furnish a cogent explanation of the cash deposits along with reliable evidence in support of his contentions and grounds of appeal despite ample opportunity and time allowed during the appellate proceedings. In such circumstances, the undersigned is left with no alternative but to presume that the appellant has no further submissions in support of his averments made in the grounds of appeal. Accordingly, the appeal is being decided keeping in view the facts brought on 5.4 Based on the material available on record, the appellant's contentions are not acceptable because of specific findings in the assessment order about no evidence being adduced by the appellant to corroborate the claim made. In the absence of any cogent material to explain the nature and source of this money deposited in the form of cash in the bank account, the stand of the AO cannot be faulted. The appellant failed to explain the nature and source of the cash deposits during the assessment proceedings and even in the appellate proceedings. It is a trite law that once the appellant fails to discharge the onus cast on him to explain the nature and source of any sum of money and does not prove the identity and creditworthiness of the person along with the genuineness of the transactions, the amount is deemed to be the income of the appellant as per the deeming provisions of sections 69A of the IT Act. The genuineness of transactions could not be proved to the satisfaction of the AO during the assessment proceedings.
5.5 The AO has placed reliance on the decision of the Hon'ble Supreme Court in the case of Chuharmal Vs CIT (1988) 172 ITR 250 as well as the decision of the Hon'ble Supreme Court in the case of Smt Srilekha Banerjee and others Vs CIT, Bihar & Orissa, reported in 1964 AIR 697, dated 27/03/1963. I find that the same are clearly applicable to the facts of the case.
5.6 Based on the facts mentioned above, detailed discussion in the assessment order by the AO and in the absence of any written submission by the appellant, I am not inclined to interfere with the decision of the AO.
5.7 Because of the facts mentioned above, I do not find any infirmity in the decision of the AO and I am not inclined to interfere with the decision of the AO.
Hence, Grounds of appeal Accordingly, the same is hereby dismissed. 1 & 2 are found to be not maintainable.
Sushila Devi Ladiwala, vs. ITO 6. Ground of Appeal 3 raised the issues of charging interest u/s 234A, 234B and 234C. The charging of interest is a consequential action to the addition made as per the provisions of law. Hence, this ground is found to be not maintainable and accordingly dismissed.
Further, Ground of Appeal no. 4, is generic in nature raising the issue related to any alteration, amendment or addition to any ground of appeal before or during the hearing proceedings of the appeal. But no such option was exercised by the appellant during appellate proceedings. Hence, the ground of appeal is dismissed for statistical purposes.
8. In the result, the appeal is dismissed. The order passed under sec. 250 read with sec. 251 of the Act.” 6. During the course of hearing, the ld. AR for the assessee prayed that the Ld. CIT(A) and the AO has passed the ex-parte order and the assessee was not provided adequate opportunity of being heard. Thus, the assessee may be provided one more opportunity to advance his arguments/submissions before the ld. AO in the interest of equity and justice.
7. Per contra, Ld. DR objected to the prayer of the assessee and submitted that even the assessee did not represent case before the ld. AO and therefore, in that case the Bench feels the matter may be restored to the file of the Assessing Officer.
We have heard both the parties and perused the materials available on record. The bench noted from the order it is observed from the Sushila Devi Ladiwala, vs. ITO appellate order that the Ld. CIT(A) dismissed the appeal of the assessee for non-prosecution, as the assessee neither appeared nor filed any written submissions in response to the notices issued during the appellate proceedings. The assessment was also completed ex parte under Section 144 of the Act by the Assessing Officer on account of persistent non- compliance by the assessee during the reassessment proceedings.
However, having regard to the overall facts and circumstances of the case and the plea made by the Ld. AR during the course of hearing before us, seeking one final opportunity to present the assessee’s case on merits along with necessary documentary evidence, we are of the considered view that, in the interest of natural justice, the assessee deserves one more opportunity to present his case before the Assessing Officer. Accordingly, we deem it appropriate to restore the matter to the file of the Assessing Officer for de novo adjudication after affording due and reasonable opportunity of hearing to the assessee. The assessee is directed to fully cooperate in the remand proceedings and shall not seek adjournments on frivolous grounds.
Before parting, we would like to clarify that this restoration shall not be construed as having any bearing on the merits of the case. The In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 03/04/2025.