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Facts
The assessee, an individual running a tire franchise, had significant credits (Rs. 1,71,24,499) in her bank account for AY 2016-17. As no Income Tax Return was filed, the Assessing Officer initiated reassessment proceedings under Section 148, and subsequently completed an ex-parte assessment under Section 147 read with Section 144/144B, treating the credits as unexplained under Section 68 of the Income Tax Act, 1961.
Held
The CIT(A) dismissed the assessee's appeal in limine without condoning the delay, despite the assessee citing medical reasons (breast cancer, surgery, chemotherapy). The Tribunal, acknowledging the assessee's severe health issues and inability to attend to tax matters, remitted the entire issue back to the Assessing Officer for fresh adjudication, granting the assessee a reasonable opportunity to be heard and to substantiate her claim.
Key Issues
The key issues were the validity of the addition of Rs. 1,71,24,499 as unexplained cash credit under Section 68 and the CIT(A)'s refusal to condone the delay in filing the appeal despite the assessee's severe medical condition (breast cancer).
Sections Cited
68, 147, 144, 144B, 148, 142(1), 249(3), 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH:COCHIN
AssessmentYear:2016-17 Saramma Thomas Thankachan Robin Cottage Nedumpaikulam ITO& Vs. Kundara PO NFAC, Kerala 691 501 Delhi PAN NO :AUDPT5972D APPELLANT RESPONDENT Appellant by : Shri N.S. Panicker, A.R. Respondent by : Smt. Leena Lal, Sr. D.R. Date of Hearing : 19.02.2025 Date of Pronouncement : 16.05.2025 O R D E R PERKESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of CIT(A)/NFAC dated 9.8.2024 vide DIN & Order No.ITBA/NFAC/S/250/2024-25/1067491706(1) for the AY 2016- 17 passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”).
The assessee has raised the following grounds of appeal:
Brief facts of the case are that the assessee is an individual and carrying on the business under the name & style of of running a franchise shop of M.R.F.Tyres at Chandanathoppe, Kollam. The business was carried on under the trade name of 'New MadathilazhikathuTyres' and the business was that of purchase and sale of tyres and tubes etc., manufactured by M.R.F Tyres.During the financial year 2015-16, the assessee was operating a current account bearing no:258205000014 with ICICI Bank, Kundara for the purpose of her business 'M/s.New MadathilazhikathuTyres'. The total credits in the above current account for the financial year 2015-16 worked out to Rs.1,71,24,499/-. As the assessee had entered into high value transactions and as the return of income for the assessment year 2016-17 was not filed, the assessing officer had reasons to believe that income chargeable to tax had escaped assessment and hence a notice u/s.148 was issued to the assessee on 20-03-2020. Thereafter, notices u/s.142(1) of the Income tax Act were issued to the assessee on 30-09-2020, 02-08-2021 and on 12-08-2021. As the notices remained un-responded, the assessing officer issued a show cause notice on 20-09-2021. In the absence of any response to the show cause notice also, the assessing officer proceeded Saramma Thomas Thankachan, Kollam Page 3 of 5 tocomplete the assessment u/s.147 r.w.s. 144 r.w.s.144B of the Act by passing order dated 27-09-2021. While completing the assessment, the assessing officer treated the amount of Rs.1,71,24,499/- as unexplained credit and assessed the same u/s.68 of the Act. The assessment was accordingly completed by order dated 27-09-2021 determining the income of the assessee at Rs.1,71,24,500/-.
Being aggrieved by the order passed by the AO on 27.9.2021, the assessee went in appeal before the ld. CIT(A)/NFAC.
The ld. CIT(A)/NFAC dismissed the appeal in limine under the provisions of section 249(3) r.w.s. 250 of the Act as the assessee could not show any sufficient cause for delay in filing appeal before the ld. CIT(A)/NFAC. The ld. CIT(A) observed that the reasons cited by the assessee are not found tenable and thus the prayer for condonation of delay filed by the assessee is not admissible.
Aggrieved by the order of ld. CIT(A)/NFAC, the assessee is in appeal before us.
Before us ld. A.R. of the assessee vehemently submitted that the assessee could not represent her case before the AO as the assessee had to undergo surgery, chemotherapy and regular followup with medication as the assessee was diagnosed with breast cancer. Further, ld. CIT(A)/NFAC dismissed the appeal of the assessee by not condoning the delay in filing the appeal inspite of medical certificate produced before him and accordingly prayed that one more opportunity may be granted before the AO to substantiate her claim.
We have heard the rival submissions and perused the materials available on record. On going through the assessment order we find that the AO himself observed that during the assessment year 2016-17, the assessee had carried out business under the name & style of 'M/s.New MadathilazhikathuTyres'. Further, the entire credits during the period from 1.4.2015 to 31.3.2016 amounting to Rs.1,71,24,499/- in ICICI bank has been added u/s 68 of the Act since the assessee remained non- responsive through out the assessment proceeding. Further, on going through the order of ld. CIT(A)/NFAC we also take a note of the fact that ld. CIT(A)/NFAC did not condone the delay in filing appeal before him as the reason cited by the assessee were not found tenable and in view of the ld. CIT(A) the assessee had not shown any sufficient cause. Before us, ld. A.R. of the assessee vehemently submitted that the assessee has been diagnosed with breast cancer and had to undergo surgery, chemotherapy and regular follow up with medication and also frequent hospitalization. Due to this indisposition and ill health the assessee could not properly attend to the income tax matters. This being so, in the interest of justice and fair play and as requested by A.R. of the assessee, the entire issue in dispute is remitted back to the file of AO to decide afresh in accordance with law. Needless to say a reasonable opportunity of being heard must be granted to the assessee. The assessee is also directed to cooperate with the proceedings and file all the document/records before the AO to substantiate her claim. It is ordered accordingly.
Order pronounced in the open court on 16th May, 2025 Sd/- Sd/- (Inturi Rama Rao) (Keshav Dubey) Accountant Member JudicialMember Bangalore, Dated: 16th May, 2025. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order
Asst. Registrar, ITAT, Cochin.