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Facts
The assessee, engaged in tour agencies, made cash deposits in IndusInd Bank in FY 2014-15 but did not file an income return. The Assessing Officer initiated reassessment proceedings, treating the deposits as unexplained cash credit under Section 69A, and assessed total income of Rs. 46,95,000/-. The assessee filed an appeal before the CIT(A), which was dismissed due to a 321-day delay.
Held
The Tribunal found that the CIT(A) erred in not condoning the delay despite the assessee providing sufficient cause. It held that a pragmatic approach should be adopted for condonation of delay. The Tribunal set aside the CIT(A)'s order and restored the disputed issues to the file of the CIT(A) for fresh adjudication on merits, providing adequate opportunity for hearing to the assessee.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal due to a 321-day delay without considering the merits; and the validity of reassessment proceedings initiated under Section 147/148, including jurisdictional and procedural challenges.
Sections Cited
147, 144, 250, 148, 148A(b), 151, 69A, 133(6), 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 11/06/2025, passed by the CIT(A)/ National Faceless Appeal Centre(NFAC), Delhi, u/sec 147 r.w.s 144and u/sec 250 of the Income Tax Act, 1961 (for short "the Act") for the A.Y. 2015–16. The assessee has raised the following grounds of appeal:–
01. Notice u/s. 148 issued by the Jurisdictional Assessing Officer ("JAO") is without jurisdiction since this notice could have been issued by the Faceless Assessing Officer ("FAO") and hence the entire assessment proceedings are bad in law and deserve to be quashed.
02. Reopening beyond three years is invalid since the amount of cash deposits in the bank is Rs. 46.95 lakhs. Assessing Officer ("AO") erred in adding the figure of cash deposit reported as total cash deposits during the year Rs. 46.95 lakhs and again reported as cash deposits more than
2 Abid Mustafa Khan ITA no.502/Nag./2025 Rs. 2.00 lakhs in one day Rs. 45.25 lakhs, making the total of cash deposits greater than Rs. 50.00 lakhs. Accordingly, the proceedings being initiated beyond the limitation period are void ab-initio and deserve to be quashed.
The reasons recorded for reopening mention cash deposits of Rs. 92,20,000/-whereas the addition made is only ₹46,95,000/-. The inconsistency renders the reassessment proceedings untenable and arbitrary.
The learned Assessing Officer erred in law and on facts in issuing the notice under section 148A(b) of the Income-tax Act, 1961, without furnishing the copy of approval granted by the specified authority (Principal Chief Commissioner of Income Tax) as required under section 151, thereby violating the principles of natural justice. The said procedural lapse vitiates the entire reassessment proceedings and renders the notice and consequential order bad in law and void ab initio."
Learned AO erred in making addition u/s. 69A though in order every where this addition is mentioned as "Unexplained Cash Credits".
Learned CIT (A) erred in dismissing the appeal solely on the grounds of delay and without adjudicating case on merits.
Learned CIT(A) erred in dismissing the appeal solely on delay without appreciating the genuine and bona fide reasons for delay supported by documentary evidence. The order is unjust and suffers from legal infirmity.
Assessee prays for leave to add, delete, amend or withdraw any ground of appeal till the hearing of the appeal.”
The brief facts of the case are that, the assessee is engaged in the business of tour agencies. The Assessing Officer has received information that in the F.Y. 2014–15, the assessee has made cash deposits in the IndusInd Bank and has not filed return of income. Therefore, the Assessing Officer has reason to believe that the assessee has escaped assessment and issued notice u/sec148 of the Act and there was no compliance. Subsequently, the Assessing Officer obtained the bank statement and KYC of the assessee from the Bank by issuing notice u/sec
3 Abid Mustafa Khan ITA no.502/Nag./2025 133(6) of the Act. Further notice under section 142(1) of the Act was issued and there was no proper compliance the Assessing Officer found that the explanations does not satisfy the sources of cash deposits in the bank account and was treated as unexplained cash credit u/sec 69A of the Act and assessed the total income of Rs.46,95,000/–, and passed order u/sec 147 r.w.s. 144 of the Act dated 23/03/2023. Aggrieved by the order, the assessee has filed appeal before the CIT(A).
3. In the appellate proceedings, the CIT(A) found that there is a delay of 321 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 and the delay was not deliberate act 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 .The Ld. A.R. further submitted that 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).
4 Abid Mustafa Khan ITA no.502/Nag./2025
5. 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 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 cause for the delay in filing the appeal and the assessee explained the delay dealt at Page 2 of the order. Whereas the delay in filling the appeal before the CIT(A) by the assessee 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, submissions 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 appeal
s of the assessee are allowed for statistical purposes.
6. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 10/10/2025 as per rule 34(5) of the ITAT Rules 1963