BALDEVBHAI VITHHAKBHAI PATEL,PARDI vs. ITO, WARD 1, VAPI

This appeal emanates from the order dated 16.01.2025 passed under section 250 of the Act (in short, ‘the Act’) by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, “the CIT(A)”] for the assessment year (AY) 2011-12.

The grounds of appeal

We have heard both the parties and perused the materials available on record. We find that the delay in filing the appeal was not deliberate and intentional on the part of assessee. Moreover, the assessee is not going to be benefitted by filling appeal belatedly. It is now fairly settled that when technical consideration and cause of substantial justice are pitted against each other, the cause of substantial justice may be preferred. Hence, delay in filling the appeal is condoned and we proceed to decide the case on merit.

The facts of the case in brief are that the assessee had not filed his return of Income for AY 2011-12. After recording the reasons, the case was reopened by issuing notice u/s 148 of the Act with the approval of the ld. PCIT, Valsad. Various notices u/s 142(1) and 143(2) of the Act were issued 2011-12 Baldevbhai Vithhakbhai Patel to the assessee. In response to the notice u/s 148 of the Act on 26.03.2018, the assessee filed his return of income on 15.11.2018, declaring net taxable income of Rs.2,20,110/- and net agricultural income of Rs.2,70,000/-. Based on the information available with the Department, the Assessing Officer (in short, ‘AO’) noticed that the assessee had deposited cash of Rs.16,50,000/- in his account, maintained with Bank of Baroda. The AO called obtained information from the Bank of Baroda, which revealed that the assessee had deposited cash of Rs.16,50,000/- in above bank account from 23.08.2010 to 17.03.2011. The AO required assessee to explain nature and source of cash deposit of Rs.16,50,000/- and other credit entries of Rs.7,00,000/-, Rs.2,00,000/- and 56,000/-. In absence of satisfactory explanation, the AO relied on the decision of Hon’ble Supreme Court in case of Kale Khan Mohammad Hanif vs. CIT, (1963) 50 ITR 1 (SC) and Roshan Hi Hatti vs. CIT, (1977) 107 ITR (SC) and held that the law is well settled that the onus of proving the source of a sum of money found to have been received by an assessee, is on him. He also relied on the decision of Hon’ble Delhi High Court in case of CIT vs. Oasis Hospitalities Pvt. Ltd., 333 ITR 119 (Del). The AO observed that the assessee failed to prove the identity, creditworthiness and genuineness of impugned transactions. Therefore, the AO made additions Rs.19,50,000/- as unexplained investment u/s 69A of the Act and Rs.2,00,000/- as unexplained cash credit u/s 68 of the Act. The total assessed income of Rs.23,70,110/- against the returned income of Rs.2,20,110/-.

Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). There was a delay of 150 days in filing appeal before the CIT(A). The CIT(A) condoned the delay and disposed the appeal on merits. He has reproduced the Statement of Facts along with grounds of appeal

We have heard both the parties and perused the materials available on record. It is an undisputed fact that the assessee did not respond to the notices issued to him by the CIT(A). The CIT(A) has upheld the addition made by the AO and dismissed the appeal by observing that the assessee failed to discharge the onus by producing cogent evidence and explanation. We find that assessee could not plead his case before the CIT(A). We find that the CIT(A) has passed the ex parte order due to non-compliance by the assessee. The ld. AR contended that another opportunity of hearing may be given to the assessee to plead his case on merit. It is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, without delving deeper into the merits of the case, in the interests of justice, we set aside the order of CIT(A) and restore the matter to the file of CIT(A) for fresh assessment subject to payment of cost of Rs.5,000/- (Rupees Five Thousand only) to the credit of the “Prime Minister’s National Relief Fund (PMNRF)” within 3 weeks after receipt of this order and to pass a speaking order after affording sufficient opportunity of being heard to the assessee. The assessee is also directed to furnish explanations and submit the relevant details and documents before the CIT(A). For statistical purposes, the appeal of the assessee is treated as allowed.