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Facts
The assessee's original assessment for AY 2012-13 under Section 143(3) was set aside by the Pr. CIT under Section 263, leading to re-assessment. During re-assessment, an addition of Rs. 1,05,00,000/- was made under Section 68 for unexplained cash deposits. The CIT(A) upheld this addition due to the assessee's non-compliance, which led the assessee to file an appeal before the ITAT with a delay of 503 days.
Held
The Tribunal condoned the 503-day delay in filing the appeal, acknowledging the assessee's genuine reasons for the delay. Considering the assessee's past non-compliance before the CIT(A) and the substantial demand, the case was remanded back to the CIT(A) to provide one final opportunity to the assessee to present their arguments and evidence. The assessee is directed to cooperate with the remand proceedings.
Key Issues
Condonation of delay in filing appeal before ITAT; validity of addition under Section 68 for unexplained cash deposits; whether CIT(A) should have provided further opportunity of hearing.
Sections Cited
143(3), 263, 68
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Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/NFAC/S/250/2023- 24/1052454197(1) dated 29.04.2023 for the A.Y.2012-13 arising out of the order
At the outset, it is noticed from the appeal record that there is a delay of 503 days in filing the appeal before the Tribunal. Explaining the reasons for belated filing of the appeal, the Ld. AR drew our attention to the affidavit filed by the assessee along with a petition seeking for condonation of delay and read out the contents of the petition which is as under: - “1. The above-mentioned appeal is instituted against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi dated 29.04.2023. The appellant deemed to have been received order which has been uploaded on same day and as such the appeal ought to have been filed on or before 28-06-2023. However, the appeal was filed before the Hon'ble Income Tax Appellate Tribunal, Visakhapatnam on 12-11-2024 ie., with delay of 503 days.
2. For the delay occurred of 503 days in preferring the appeal it is submitted that the appellant is unaware of the order passed by the Learned Commissioner of Income Tax (Appeals) since the mail id on which the appeal proceedings initiated does not belong to the appellant but to the auditors. The appellant is in bonafide belief that the appeal preferred will be finalised in favour of the appellant. Therefore, he has not made any efforts to find out the position of appeal.
3. However, the appellant was in receipt of a notice from the department dated 21-08-2024 directing to pay the demands outstanding immediately for the Assessment Years 2012-13, 2015-16 and 2020-21. Presuming that the appeal filed for the Assessment Year 2012-13 is still pending, the appellant has approached his auditors and came to know that the appeal has already been disposed off by the Learned CIT(Appeals) vide his orders dated 29-04-2023 itself on the ground that there was no compliance to any of the opportunity letters issued. However, the appellant was neither been intimated about receipt of such order nor a further appeal has been preferred before Hon'ble ITAT. When asked about filing the appeal further, they have assured the appellant that they will be filing the appeal immediately.
4. However, after passing of certain time, the appellant again after passing one more month, approached the auditors to find out the position and however noticed than no appeal has been preferred. Therefore, in these circumstances, the appellant has no other option except to approach
Page No. 2 Muthavarapu Srinivasa Babu another auditor. The new auditor however asked the appellant to supply the assessment orders and also the order of the Commissioner of Income Tax, Vijayawada passed u/s.263 of the I.T.Act in order to find out the facts of the case and also to file a further appeal before Hon'ble ITAT. Since the orders have been passed manually in those times, the appellant had to obtain such copies of the orders manually from the Income Tax department. Hence all these issues have caused an inordinate delay of 503 days in preferring the appeal. It is also submitted that the requisite appellate fee of Rs.10,000/-was also paid on the date of appeal ie., on 28.10.2024.
It is therefore, submitted that the delay of 503 days in filing the appeal was due to reasons mentioned above which is neither intentional nor deliberate. It was not out of negligence but due to lack of knowledge about procedural aspects of the appeal and also due to time process consumed in obtaining the orders manually from the department which are beyond the control of the appellant.
On perusal of the contents of the affidavit filed by the assessee as well as the submission of the Ld. AR, we find that the assessee is prevented by a reasonable and sufficient cause in filing the appeal beyond the prescribed time limit with a delay of 503 days. Therefore, we hereby condone the delay of 503 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits in the following paragraphs.
Brief facts of the case are that assessee is an individual deriving income from salary, House property, Partnership income, income from Swarna Gardens (Kalyanamandapam) filed his return of income for the A.Y. 2012-13 declaring total income of Rs.7,10,226/- and agricultural income of Rs.7,20,000/-. The, Assessment proceedings were completed on 31.03.2015 under section 143(3) of the Act assessing the total income at Rs.14,00,250/-. Subsequently, Pr.CIT, Vijayawada vide his order under section 263 dated 28.03.2017 set aside the order of the Ld.AO and directed to Ld.AO to re-do the assessment. Accordingly, in the Page No. 3 Muthavarapu Srinivasa Babu reassessment proceedings again notices were issued and duly served to the assessee. During the re-assessment proceedings, Ld. AO noticed from the record that the assessee had deposited cash in his SB account maintained with Swarna cooperative urban bank. The assessee was asked to explain the source of cash deposit. Further, it was noticed that the cash credit amounting to Rs.1,05,00,000/- made in the cash book on different dates. In response assessee furnished his reply. Not being convinced with the submissions of the assessee, Ld. AO determined the income of assessee at. Rs.1,19,00,250/- by making addition of Rs.1,05,00,000/- being unexplained credits under section 68 of the Act.
5. On being aggrieved by the addition made by the Ld. AO, assessee filed an appeal before Ld. CIT(A). Ld. CIT(A) upheld the order of the Ld. AO since assessee has not responded to any of the notice / opportunities provided to the assessee.
6. On being aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us by raising following grounds of appeal: -
1. The Learned CIT (Appeals) is erred in facts and law while passing the order.
2. The Learned CIT(Appeals) is not justified in dismissing the appeal on the ground that no submissions are made by the appellant. The Learned CIT(Appeals)d ought to have afforded further opportunity of being heard instead of dismissing the appeal Illimani.
3. On the facts and circumstances of the case, the Learned Assessing Officer is not justified in making addition of Rs. 1,05,00,000/- representing cash deposits made into the bank account towards unexplained credit u/s.68 of the I.T.Act.
Page No. 4 Muthavarapu Srinivasa Babu 4. On the facts and circumstances of the case, the Learned Assessing Officer can not review his own assessment order again and hence the assessment made is invalid and void ab intio.
5. On the facts and circumstances of the case, the Learned Assessing Officer is not justified in adding the cash deposits made into the bank account even though same were already considered while completing the original assessment order u/s. 143(3) dated 31-03-2015.
Any other legal and factual ground that may be urged at the time of hearing of the appeal.”
At the outset, Ld. Authorised Representative [hereinafter “Ld.AR”] submitted that the Ld. CIT(A) has passed the order without providing sufficient opportunities to the assessee. He further pleaded that the assessee could not respond to the notices issued by the Ld. CIT(A). He therefore prayed for one final opportunity before Ld. CIT(A) to submit the relevant documents.
Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] strongly objected to the plea of the Ld.AR and vehemently argued that revenue has provided ample opportunities to the assessee as detailed in their respective orders. However, assessee has failed to comply with the notices issued by the Revenue Authorities. She therefore pleaded that the no further opportunity should be granted and prayed for upholding the order of the Ld.CIT(A).
We have heard rival contentions and perused the material available on record. It is an undisputed fact that the assessee has not fully complied with the notices and has also not responded to the various notices issued to the assessee as detailed in the order of the Ld. CIT(A). In the interest of natural justice,
Page No. 5 Muthavarapu Srinivasa Babu considering the plea of the Ld.AR and considering the huge demand, we are of the considered view that assessee may be provided one final opportunity to substantiate the case before Ld. CIT(A). Needless to say, that the assessee should cooperate with the remand proceedings failing which the Ld. CIT(A) is at liberty to decide the case based on the material available on record. Accordingly, the grounds raised by the assessee are statistically allowed.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 20th August, 2025.