Loading judgment…
Facts
The appellant, an individual, did not file a return for AY 2016-17. Based on cash deposits of Rs.1,01,18,000, the AO issued a notice u/s 148 and, due to non-compliance, passed a best judgment assessment u/s 144, treating the deposits as unexplained money u/s 69A. The appellant filed a delayed appeal (345 days) to the CIT(A), which was dismissed both in limine and on merits.
Held
The Tribunal held that the CIT(A) erred in not condoning the delay as the appellant had no knowledge of the assessment order until receiving a demand notice. It also ruled that the CIT(A) should not have dealt with the merits of the case after dismissing the appeal in limine on grounds of delay. The CIT(A)'s order was set aside, and the matter was remitted back for disposal on merits.
Key Issues
1. Whether the CIT(A) was justified in refusing to condone the delay in filing the appeal. 2. Whether the CIT(A) could decide on the merits of the case after dismissing the appeal in limine due to delay.
Sections Cited
148, 142(1), 144, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail
IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Sandeep Singh Karhail, Judicial Member ITA No.819/Coch/2024 :Asst.Year 2016-2017 Sri.Bhaskarakaimal Kureeckal The Income Tax Officer Bhavanam Girish v. Ward 1 Kureeckal Bhavanam Kottayam. Kaduthuruthy, Vaikom Kottayam – 686 604. PAN : ASTPG3974C. (Appellant) (Respondent) Appellant by : Sri.Vishnu Das K, CA Respondent by : Smt.Leena Lal, Senior AR Date of Date of Hearing : 24.03.2025 Pronouncement : 14.05.2025 O R D E R Per Inturi Rama Rao, AM : This is an appeal filed by the assessee directed against the order of the National Faceless Appeal Centre / Commissioner of Income-tax (Appeals) [“the CIT(A)”] dated 19th July, 2024 for the assessment year 2016-2017.
Briefly, the facts of the case are that the appellant is an individual. No regular return of income for the assessment year 2016-2017 was filed by the appellant. Based on the information that the appellant had made total cash deposits of Rs.1,01,18,000 with Canara Bank during the financial year relevant to the assessment year 2016-2017, the Assessing
2 ITA No.819/Coch/2024. Bhaskarakaimal Kureeckal Bhavanam Girish. Officer (“the AO”) formed an opinion that the income escaped the assessment, and accordingly issued a notice u/s.148 of the Act on 25th March, 2021. The appellant neither complied with the notice u/s.148 of the Act nor u/s.142(1) of the Act. Under the circumstances, the AO was constrained to pass the best judgment assessment under the provisions of sec.144 of the Act by treating the entire cash deposits of Rs.1,01,18,000 as unexplained money u/s.69A of the Act.
Being aggrieved by the above assessment order, an appeal was filed before the CIT(A) with a delay of 345 days. It was stated that the appellant was engaged in the business of stamp vendor and deriving commission from the State Government of Kerala, and in support of this contention, the appellant had also submitted the licence of stamp vendor issued in the year 2000. It was further submitted that the appellant earned gross commission of Rs.2,99,477 as certified by Sub- Treasury of Government of Kerala, Kaduthuruthy, and he also submitted that the cash deposits were made out of sale proceeds of the stamps. However, the CIT(A) without condoning the delay of 345 days, dismissed the appeal in limine as well as on merits.
Being aggrieved the appellant is in appeal before us, in the present appeal. It is submitted that the CIT(A) ought not have refused to condone the delay of 345 days, as the appellant had no knowledge of the order passed by the AO till the receipt of the arrear demand notice dated 30th January, 2023 issued by the AO manually on 3rd February, 2023. Immediately, thereafter steps were initiated to file the appeal and finally the appeal was filed on 24th March, 2023. Thus, it was submitted
3 ITA No.819/Coch/2024. Bhaskarakaimal Kureeckal Bhavanam Girish. that the delay had occurred on account of factors beyond the control of the appellant. Thus, it was submitted that the CIT(A) ought not have refused to condone the delay and he further submitted that having not condoned the delay the CIT(A) ought not have dealt with the merits of the case.
On the other hand, the learned Sr.DR submits that the order passed by the CIT(A) is a speaking order, which requires no interference.
We heard the rival submissions and perused the material available on record. The issue that arises for our consideration is whether the CIT(A) was justified in refusing the condonation of delay having regard to the explanation tendered before him. The appellant categorically stated that it had no knowledge of the order passed by the JAO till the receipt of the demand notice from JAO on 3rd February, 2023. This submission remained uncontroverted. It is trite law that for the purpose of reckoning the limitation period, it is the date of knowledge of the order which has to be taken into consideration, in the absence of proof of actual service of assessment order. In the above circumstances, if the date of service of the assessment is considered as 3rd February, 2023, there was no delay in filing the appeal before the CIT(A). Therefore, the CIT(A) ought to have condoned the delay and adjudicated the issue on merits. We also vacate the findings of the CIT(A) on the merits, in view of the settled position of law that when the appeal is dismissed in limine on the ground of delay, the CIT(A) ought not have entered into the merits of the addition. In these circumstances, the order of the CIT(A) is
4 ITA No.819/Coch/2024. Bhaskarakaimal Kureeckal Bhavanam Girish. set aside and remit the matter back to the file of the CIT(A) with a direction to dispose of the appeal on merits, after affording a reasonable opportunity of being heard to the assessee. 7. In the result, the appeal filed by the appellant stands partly allowed. Order pronounced on this 14th day of May, 2025.
Sd/- Sd/- (Sandeep Singh Karhail) (Inturi Rama Rao) JUDICIAL MEMBER ACCOUNTANT MEMBER Cochin; Dated : 14th May, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin