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Facts
The assessee, a retired railway employee, made fixed deposits and earned interest income, which the AO considered unexplained investments and income escaping assessment under Section 148 and 142(1), making additions under Section 69 and 144 upon non-compliance. The CIT(A) dismissed the assessee's appeal in limine due to a 108-day delay in filing, refusing to condone it despite detailed explanations.
Held
The ITAT found that the assessee's delay was due to being unaware of tax provisions and was not deliberate, thus constituting sufficient cause for condonation. The Tribunal condoned the delay, set aside the CIT(A)'s order, and remanded the matter back to the CIT(A) for fresh adjudication on the merits of the additions, providing the assessee an adequate opportunity of hearing.
Key Issues
Whether the CIT(A) erred in dismissing the appeal for delay without condoning it for sufficient cause; and the validity of additions made by the AO for unexplained investments and interest income on merits.
Sections Cited
147, 144, 250, 69, 115BBE, 148, 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, NAGPUR
Before: SHRI PAVAN KUMAR GADALE
The assessee has filed the appeal against the order dated 30/05/2025, passed by the CIT(A)/ National Faceless Appeal Centre(NFAC), Delhi, u/sec 147 r.w.s. 144 and 250 of the Income Tax Act, 1961 (for short "the Act") for the A.Y. 2019–20. The assessee has raised the following grounds of appeal:–
“1. On the facts & circumstances of the case & in law, the learned Commissioner of Income-tax (Appeals) [CIT(A)] erred in dismissing the appeal in limine on the ground of delay in filing, without appreciating the "sufficient cause" explained by the appellant for such delay without going in to the surrounding facts & merits of the case.
On the facts & circumstances of the case & in law, the learned Assessing Officer (AO) erred in treating the post-employment benefits as unexplained investment under Section 69 r.w.s. 115BBE of the Income Tax Act, 1961 without appreciating the fact that assessee has received post employment benefit from Government Service (Central Railway).
On the facts & circumstances of the case & in law, the learned Assessing Officer (AO) erred in not appreciating that the investment of Rs. 20,03,100 in the Central Railway Employees Credit Cooperative Society Ltd was from explained and known source of income.
On the facts & circumstances of the case & in law, the learned Assessing Officer (AO) erred in not conducting due enquiry and adopting irrational & independent mind before proceeding with the high pitched addition in the hands of the Assessee. 5. On the facts & circumstances of the case & in law, the learned Assessing Officer (AO) erred in making an addition of Rs. 1,25,251/- as interest income under the head "Other Sources". 6. On the facts & circumstances of the case & in law, the learned Assessing Officer (AO) erred in making an addition of Rs. 1,12,260/- as Salary income. 7. Appellate crave to add, amend, modify, alter, revise, substitutes delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.”
2. The Brief facts of the case are that, the assessee has filed the return of income for the A.Y. 2019–20 on 04/06/2019, disclosing a total income of Rs.2,11,200/-. The Assessing Officer received information as per the category of “High Risk CRIU/VRU cases”. The assessee has made fixed deposits of Rs.20,03,100/- with The Central Railway Employees Credit Co–operative Society Ltd. and earned interest income of Rs.1,25,251/-. The Assessing Officer has reason to believe that income has escaped assessment and issued notice under section 148 of the Act and u/sec 142(1) of the Act and there was no compliance to the notices. Therefore, the Assessing Officer, based on the information available on record has invoked the provisions of section 144 of the Act and made addition of fixed deposits as unexplained investments u/sec 69 of the Act Rs.20,03,100/- and similarly interest income of Rs.1,25,251/- under the income from other sources and assessed the total income of Rs.24,51,811/- and passed the order u/sec 147 r.w.s. 144 of the Act dated 15/01/2024. Aggrieved by the order, the assessee has filed the appeal before the CIT(A).
3. In the appellate proceedings, the CIT(A) found that there is a delay of 108 days in filing the appeal and the assessee could not explain the delay with sufficient cause. Whereas, the assessee has filed the detailed explanations for the delay but the CIT(A) was not satisfied with the explanations and has not condone the delay and dismissed the appeal filed by the assessee in limine/ not maintainable. The assessee being aggrieved by the order has filed the appeal before the Hon’ble Tribunal.
4. At the time of hearing, the ld. A.R. for the assessee submitted that the CIT(A) has erred in not condoning the delay though the assessee has explained with supporting details that the assessee is a salaried employee and after retirement from the Railways, the assessee has made fixed deposits with The Central Railway Employees Credit Co–operative Society Ltd., and has earning interest income. that the assessee is not aware of the provisions of the Income Tax and the delay was not a deliberate act. Further the assessee has a good case on merits and prayed for granting of opportunity to substantiate the case with evidences and information before the lower authorities. Per–contra, the learned Departmental Representative relied on the order of CIT(A).
Heard the rival submissions and perused the material on record. Prima–facie, the sole grievance of the assessee that the learned CIT(A) has dismissed the appeal as not maintainable by overlooking the fact that the assessee was employed with railways and upon retirement,the assessee has deposited retirement funds in The Central Railway Employees Credit Co–operative Society Ltd and is not aware of the provisions of the Income Tax and the assessee has a good case on merits. On a perusal of the CIT(A) order, the appellate authority has provided opportunity to explain the sufficient case for the delay in filing the appeal and there was compliance by the assessee explaining the delay dealt at Para2.7 of the order .Whereas the delay in filling the appeal before the CIT(A) by the assesse is supported with the sufficient cause and pragmatic approach should be considered for condonation of delay and accordingly the delay is condoned. Hence, considering the facts, circumstances and to meet the ends of justice, the assessee should be provided with one more opportunity for hearing. Accordingly, the order of the CIT(A) is set aside and restore the disputed issues to the file of the CIT(A) to adjudicate issues afresh on merits and the assessee should be provided adequate opportunity of hearing and the assessee should co– operate in submitting the information for early disposal of appeal. And the grounds of appeals of the assessee are allowed for statistical purposes.
In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 10/10/2025