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Facts
The assessee, Nemichand Jain, deposited Rs. 14,16,000/- cash into various bank accounts during the demonetization period, which the Assessing Officer added as unexplained income under Section 68. The CIT(A) upheld this addition. The assessee's appeal to the Tribunal was filed with a delay of 209 days, attributed to issues with his previous counsel.
Held
The Tribunal condoned the delay in filing the appeal, finding sufficient cause. Noting that the assessee was unrepresented before the lower authorities and had not been given a proper opportunity to explain the source of the cash deposits, the Tribunal remanded the matter back to the Assessing Officer for fresh adjudication on merits, providing the assessee another opportunity to furnish explanations and documentary evidence.
Key Issues
Condonation of delay in filing appeal; Addition of unexplained cash deposits under Section 68 read with Section 115BBE during demonetization; Lack of adequate opportunity for the assessee to explain the source of deposits.
Sections Cited
250, 143(3), 68, 115BBE, 142(1)
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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI UDAYAN DAS GUPTA
आदेश/ O R D E R
Per UDAYAN DAS GUPTA, J.M.:
This appeal is filed by the assessee against the order of the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi passed u/s 250 of the Income Tax Act, 1961 dated 23.08.2023, which has emanated from the order of the Assessing Officer dated 10.12.2019 passed u/s 143(3), ITO, Bundi.
It is pointed out by the registry that the appeal has been belatedly filed by 209 days and the assessee has filed an application praying for condonation of delay , in the form of an affidavit , stating the fact that the CIT ( A ) order has been passed on 23rd August 2023, and the appeal before the tribunal
Page 1 of 5 AY 2017-18, should have been filed before 22nd October, 2023, but the appeal was actually filed on 18th May , 2024 , which is belated by 209 days. It is submitted that the order of the Ld CIT(A) dated 23/08/2023, has been issued to and served on the email id of his chartered accountant Mr. Rishab Ajmera CA, which also happens to be the same mail id stated in Form 35. But due to some difference in between the assessee and his CA the CA has not represented the matter before the first appellate authority and no submissions has been filed in the appeal portal and even after the appeal has been dismissed by the CIT(A) , the same was also not intimated to the assessee by the CA Mr . Ajmera . Thereafter, when the assessee came to learn from the portal sometime in April 2024, that the order is already disposed of by the CIT ( A ) , he appointed a new counsel Mr. P. Mogra , through whom this appeal has been prepared and filed. The assessee prays that since the default was not intentional or wilful on his part, the delay may please be condoned and the appeal may please be admitted to be heard on merits. 2.1 The Ld DR , did not object to the application for condonation of delay. 2.2 As such considering the prayer of the assessee and the contents of the affidavit , we are of the opinion that sufficient cause has been shown by the assessee for the delay of 209 days in filing this appeal , arising out of default of his previous counsel , and as such we condone the delay and admit the appeal to be heard on merits.
The grounds of appeal taken by the assessee in the memorandum of appeal are as follows: “1.That on the facts and in the circumstances of the case and in law the Ld. CIT(Appeals) erred in confirming the addition of Rs. 14,16,000/- made to the Total Income of the appellant by the Ld. AO in respect of Cash deposited in the Bank Account during the demonetization period by treating the same as his Unexplained Income u/s 68 r.w.s. 115BBE of the Income Tax Act without properly appreciating the facts of the case.
Page 2 of 5 AY 2017-18, 3. That on the facts and in the circumstances of the case and in law the Ld. CIT (Appeals) - erred in confirming the addition as made by the AO u/s 68 of the Act of Rs. 14,16,000/- while passing order u/s 143(3) of the Act in respect of Cash deposited during the demonetization period even when it was explained by the appellant that amount of Rs.6,50,000/- in Punjab National Bank and Rs.5,46,000/- in HDFC Bank Ltd. was deposited in the Joint Accounts of appellant with her wife out of their past years savings and Rs 2,20,000/- was deposited in Bank of Baroda even when the said account is Joint Account with his SON and transactions were done by his Son. The addition so made by the Ld. AO. of Rs 14,16,000/- and confirmed by the Ld. CIT(A) u/s 68 of Income Tax Act 1961 should requires to be deleted in full.
3. That on the facts and in the circumstances of the case and in law the Ld. CIT (Appeals) - erred in confirming the action of AO while computing the tax liability of appellant by invoking the amended provisions of Sec. 115BBE of the Act even when the cash was deposited in the Bank Accounts of appellant prior to 15.12.2016 I.e. the date of obtaining assent from the President of India in respect of amended provision of sec.115BBE of the Act.
The assessee reserves its right to add alter and modify the ground of appeal
.”
4. The facts of the case are that the assessee is an individual who has income from house property , income as a teacher ( tuition ) and bank interest . During demonitization period the assessee deposited cash amounting to Rs. 14,16,000/- into his bank account with various banks, in his own name and in name of his family members, Bank of Baroda : Rs. 2,20,000/- ( name of son ) Punjab National Bank Rs. 6,50,000/- ( Self and wife ) HDFC Bank Rs. 5,46,000/- ( Self and wife ) Regular return of income filed by the assessee was selected for scrutiny but in absence of any response to notices u/s 142(1) of the Act 61 , regarding the explanation of source of the cash deposited in bank accounts, the AO determined the total income at Rs.17,65,850/- , by making an addition of Rs. 14,16,000/- , treating the cash deposited in the bank account as unexplained u/s 68 , subjected to tax as per rates prescribed u/s 115BBE of the Act 61.
Page 3 of 5 AY 2017-18, 4.1 The matter was carried in first appeal and the Ld CIT ( A ) NFAC, in absence of any representation from the assessee and in absence of any explanation and submission regarding the source of cash deposits in bank account, dismissed the appeal in limine , and in absence of any documentary evidences being filed before him he never has the chance to adjudicate on merits of case . 4.2 Now the assessee is before the tribunal on the grounds contained in the memorandum of appeal . The Ld AR of the assessee submits that , due to some difference in between the assessee and his appointed CA Mr. Rishaba Ajmera , no representation could be made before the Ld CIT ( A ) in online portal. Even though it is apparent from the appeal order that notices were issued on five different dates of hearing , no representation was caused by the appointed CA who filed the memo of appeal , due to reasons best known to him , for which the assessee should not be penalised because he is in teaching profession and is not aware of any technicalities of tax proceedings. He further prays , that an opportunity may please be allowed to him to explain his source of cash deposit in bank account, which according to the assessee is out of his past savings, of so many years.
The Ld DR relied on the order of the Ld CIT(A) , but admitted that the order has been passed ex-parte at both stages, and the assessee , due to various reasons has gone unrepresented .
We have heard the rival submission and considered the materials on record , and we are of the opinion , that cash deposited in bank account during demo period needs to be satisfactorily explained , with documentary evidences , to the full satisfaction of the assessing officer. In the instant case no explanation whatsoever , has been filed by the assessee at any stage , regarding the availability of SBN , on the date of demonitisation , and its source thereof , and it is also not evident whether books of accounts are maintained by the assessee or not .
Page 4 of 5 AY 2017-18, However, in the interest of justice , we are of the opinion that another opportunity should be allowed to the assessee , to explain his source of cash deposited in bank during the demo period and as such we remand the matter back to the AO , for fresh adjudication on merits of the case after allowing opportunity of being heard to the assessee and the assessee is also directed to file all necessary documentary evidences and supporting papers to explain his case of cash deposit in bank account , to the satisfaction of the AO . 7.As a result the appeal is allowed for statistical purpose. Order pronounced in the open court on 24.01.2025.