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Facts
The assessee filed his return for AY 2018-19 and was selected for limited scrutiny regarding "Credit Card Payment". The AO added Rs. 28,48,210/- as unexplained cash credits and levied a penalty of Rs. 11,00,122/- under section 270A. The CIT(A) dismissed the assessee's appeal due to a delay in filing, without adjudicating on merits.
Held
The Tribunal found that the CIT(A) did not properly consider the reasons for the delay in filing the appeal, which were related to the assessee caring for his parents during the COVID-19 pandemic. The Tribunal also noted that the appeal against the original assessment order was still pending.
Key Issues
Whether the CIT(A) erred in dismissing the appeal on grounds of limitation without properly considering the reasons for the delay and adjudicating the matter on merits.
Sections Cited
270A, 68, 143(3), 250, 249(3)
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Before: SHRI SANJAY GARG & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 24.09.2024 by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [in short, ‘the CIT(A)’] for the assessment year (AY) 2018-19.
The grounds of appeal
raised by the assessee are as under: “1. That On the facts and in the circumstances of the case and in law the Assessing Officer & in imposing penalty u/s 270A amounting to Rs.11,00,122/- without appreciating the fact that addition of Rs.28,48,210/- made by him u/s 143(3) on ground of considering cash deposit made in credit cards as unexplained cash credit within the meaning of section 68 where such cash was already part of turnover amounting to Rs.48,17,488/- reported in return of income filed for the said Assessment year.
2. That On the facts and in the circumstances of the case and in law the Assessing Officer erred in imposing penalty of Rs.11,00,122/- based on cash deposits in credits cards issued by banks which cannot be regarded as books of accounts for the purpose of section 68 as held in CIT, Poona v. Bhaichand H.
2018-19 Baker Abdulaziz Norat Gandhi 141 ITR 67(Bom.). For the purpose of section 68 books of account must be of assessee himself, Thus question of imposing penalty u/s 270A for under reporting of income is not arise.
That the appellant craves leave to add, to amend, modify, rescind, supplement or alter any of the grounds stated herein above, either before or at the time of this Appeal.”
The facts of the case in brief are that the assessee filed his return of income on 12.01.2019 for AY 2018-19, declaring total income of Rs.4,01,570/-. The case was selected for limited scrutiny to verify “Credit Card Payment”. Various notices u/s 143(3) r.w.s. 143(3A) and 143(3B) were issued and served upon the assessee calling various information. The assessee is engaged in the business of railway and air ticket bookings, money transfer and utility bills payments services on commission basis in the name and style of Panoli Travels. The assessee furnished computation of income, credit card statement and bank account. The Assessing Officer (in short, ‘AO’) observed that the assessee has made cash deposit of Rs.28,48,210/- on different dates. The assessee could not explain the sources of cash deposits. Despite issuance of show cause notice on 08.03.2021, the assessee failed to respond. In absence of submission, the AO completed the assessment by making addition of Rs.28,48,210/-, which was treated as unexplained cash credits u/s 68 of the Act. The total income was assessed at Rs.32,56,740/- as against returned income of Rs.4,08,530/-. Subsequently, penalty proceeding u/s 270A of the Act was initiated on 17.03.2021 by issuing show cause notices dated 09.06.2021 and 27.07.2021, requesting to file its reply. The assessee was asked as to why 2018-19 Baker Abdulaziz Norat penalty u/s 270A of the Act should not be levied. In response, the assessee filed its reply, which is at pages 1 to 4 of the penalty order. The AO has not accepted the contention of the assessee and levied penalty of Rs.11,00,122/-, i.e., @50% of Rs.22,00,244/-.
Aggrieved by the order of AO, the assessee filed this appeal before the CIT(A). On perusal of Form 35, the CIT(A) observed that penalty order was passed u/s 270A of the Act on 22.09.2021 and appeal should have been filed within 30 days, i.e., 22.10.2021. The appellant filed appeal on 18.01.2023, i.e., after a delay of 434 days. The appellant submitted that he could not file the appeal because his parents suffered from Covid at that time. However, the appellant had not filed any documentary evidence in support of his claim despite sufficient opportunities were given to him. The assessee filed an appeal before the CIT(A) on 24.09.2024, with a delay of 434 days. After considering the judgment of the Hon'ble Supreme Court in Suo Motu Writ Petition (C) No.21 of 22, dated 10.01.2022 extending of limitation during the COVID-19 period, the effective delay was reduced to 234 days. He relied upon following decisions of Hon’ble Supreme Court in cases of (i) Perumon Bhagvathy Devaswom, Perinadu Village vs. Bhargavi Amma (Dead) by LRs, (2008) 8 SCC 321, (ii) Balwant Singh (Dead) vs. Jagdish Singh, (2010) 8 SCC 685, (iii) Shiv Dass vs. UOI & Ors., AIR 2007 SC 1330, (iv) Ajay Dabra vs. Pyare Ram & Ors., SLP(C) No.12793 of 2019, (v) Mahant Bikram Dass Chela vs. Financial Commisioner & Ors., (vi) Basawaraj and Anrs vs. Special Land Acquisition 2018-19 Baker Abdulaziz Norat Officer (SC). He held that the appellant had no ‘sufficient cause’ in terms of section 249(3) of the Act for not presenting the appeal within the prescribed period. He also relied on the decision in case of State of Uttar Pradesh & Ors. vs. M/s Satish Chand Shivhare & Brothers, SLP (Civil) No.5301 of 2022, dated 04.04.2022 wherein it was held that if delay is not condoned, no adjudication on merits is warranted. Hence, the CIT(A) refused to condone the delay within the meaning of section 249(3) of the Act and dismissed the appeal without adjudicating the matter on merits.
Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee submitted that the CIT(A) dismissed the appeal on ground of limitation without condoning delay of 234 days in filing appeal. He also submitted that the CIT(A) have passed an ex parte order. He submitted that the reasons for delay were mentioned at para 15 in Form 35 and stated that the assessee looked after his old-aged parents due to Covid-19. She further submitted that the appeal against the quantum order of AO is still pending before CIT(A) and the appellant has fair chance to succeed on merit. Therefore, he requested that another opportunity may be given to the assessee in the interests of justice.
On the other hand, learned Senior Departmental Representative (ld. Sr. DR) submitted that the assessee did not demonstrate reasonable cause to justify the delay. He submitted that the Bench may decide the matter as it thinks fit.
2018-19 Baker Abdulaziz Norat 7. We have heard both the parties and perused the materials available on record. The CIT(A) did not condone the delay by stating that no reason whatsoever was given by the appellant for delay in filling appeal. Since the appeal was dismissed at the threshold, no findings or decision was given on the merits of the case. The ld. AR submitted that the CIT(A) has not considered the reasons given by the assessee for delay in filing the appeal. He submitted that in Form No.35, the assessee, at column no.15, has duly mentioned that the assessee looked after his parents post Covid-19 and could not file appeal against penalty order passed on 22.09.2021. Therefore, the delay was neither deliberate nor intentional. It was beyond the control of the appellant. It was also submitted that the appellate order against the assessment order is still pending before the CIT(A). We find that the CIT(A) has not considered the above request of the assessee to condone the delay and dismissed the appeal without merit. Perusal of the facts mentioned above reveals that the assessee had in fact given the reasons for delay in filing appeal. The reasons given was not at all considered by the CIT(A). Moreover, the appeal order against the original assessment order is still pending before the CIT(A). Therefore, we set aside the order of CIT(A) and restored the matter to his file for fresh adjudication along with quantum appeal in accordance with law, after granting adequate opportunity of hearing to the assessee. The assessee is directed to be more vigilant and diligent and to furnish all the details and explanations as 2018-19 Baker Abdulaziz Norat needed by the CIT(A) by not seeking adjournment without valid reasons. For statistical purpose, the appeal of the assessee is allowed. 8. In the result, appeal of the assessee is allowed for statistical purpose. Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 21/11/2025.