PURSHOTTAM RATHORE,RATLAM vs. ITO 1(2), UJJAIN

Feeling aggrieved by order of first appeal dated 28.06.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 11.11.2010 passed by learned ITO-1(2), Ujjain [“AO”] u/s 144 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2008-09, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36) on following grounds:

The registry has informed that present appeal was filed on 10.03.2025 against impugned order dated 28.06.2023 passed by CIT(A). Thus, there is a delay and the appeal is time-barred. Ld. AR for assessee drew us to the following affidavit filed by assessee praying for condonation of delay:

Ld. AR next submitted that it is true that the assessee was unable to comply with notices issued by AO during assessment-proceedings and therefore the AO made addition of Rs. 16,69,500/- by treating entire amount of deposits in bank a/c as unexplained money. But it is also a fact that the assessee was, at the relevant time, engaged in agricultural activity and also carrying on a small level business of vegetables. He submitted that the deposits of Rs. 16,69,500/- in bank a/c represented assessee’s turnover of vegetable business for financial year 2007-08 and the income element therein was much less. He submitted that the assessee did not have sufficient taxable income, therefore the assessee had no necessity or occasion to file any return of income or face income-tax proceedings. He drew us to the assessment-order passed by AO wherein the AO has Page 4 of 13 have PAN even. However, after passing of assessment-order, the assessee obtained PAN and filed first appeal to CIT(A) on 17.02.2011 and also filed return of income to AO’s office on 20.04.2011 with computation of total income, statements of affairs and a letter, as per guidance available from a local consultant. These documents are scanned and re-produced below for an immediate reference:

Finally, Ld. AR submitted that the assessee has already offered proper taxable income in the return of income filed to department. Further, the assessee is at present struggling with cancer and not in a position to make anymore submission. Therefore, with folded hands, the assessee makes a prayer to close his case taking into account the records available. Ld. AR made a strong request to bench to accept the prayer of assessee. Ld. AR mentioned that he himself is extending support to assessee due to humanity without any expectation of a single penny.

Ld. DR for revenue although expressed a concern that there was no representation by assessee before AO in the year 2010 when the case was taken for scrutiny-assessment, yet he accepted that the bench may take a judicious call in the matter of condonation of delay as well as disposing of this appeal due to the peculiar position of assessee. On a suggestion asked by bench, he narrated that the taxable income may be finalized at a suitable level of say 8% of turnover, if thought fit.

We have carefully considered submissions of both sides and perused the case record.

The assessee is aggrieved by the addition of Rs. 16,69,500/- made by AO. The present case is very old pertaining to AY 2008-09. The facts of case show that the AO, on the basis of information of deposit of Rs. 16,69,500/- made by assessee in a bank a/c, issued notice u/s 142(1) calling assessee to file return. The AO also issued follow up notices. However, the notices issued by AO were not attended by assessee. Ultimately, the AO closed assessment-proceeding by passing ex-parte order u/s 144 treating the entire amount of bank deposit as unexplained money u/s 69A. However, post- completion of assessment, the assessee filed a return to AO with the assistance of a local consultant, declaring business turnover of Rs. 18,78,500/- and presumptive income of Rs. 93,925/- u/s 44AF. The return filed by assessee is acknowledged by official seal of AO’s office (re-produced in earlier para). There is no other income either assessed by AO in assessment-order or declared by assessee in the return of income subsequently filed. The case relates to AY 2008-09 for which the ceiling limit for no tax liability was Rs. 1,10,000/-. The income of Rs. 93,925/- declared by assessee is in accordance with presumptive provisions of section 44AF and the total income of assessee (rounded off) is Rs. 93,930/- which is less the ceiling limit. Therefore, the assessee was legally not required to file return of income u/s 139 of Income-tax Act, 1961. We find that the section Page 11 of 13 presumptive income, there is an exemption from maintenance of books of account u/s 44AA. Therefore, the income of Rs. 93,925/- declared by assessee is very much in accordance with provisions of section 44AF and no further addition is legally warranted. We accordingly direct the AO to modify assessment-order and restrict addition to Rs. 93,925/- as accepted by assessee in the return of income filed. The excess addition over and above Rs. 93,925/- is hereby deleted. The assessee gets part-relief accordingly.

Before parting we make it clear that we have decided present case on the basis of documents available on record in the exceptional situation of this case as discussed in earlier part of this order. However, the adjudication made by us is confined to this case only and it would not be quoted as a precedent in future.

Resultantly, this appeal is partly allowed.