Loading judgment…
Facts
The assessee filed a return for AY 2017-18 after the due date following a notice under section 148, which was issued after the AO noticed significant cash deposits. The AO made an addition of Rs. 31,20,507/-. The CIT(A) dismissed the appeal, deeming the return invalid due to its belated filing and upholding the addition.
Held
The Tribunal held that the belatedly filed return was not necessarily invalid and the CIT(A) erred in dismissing the appeal on technical grounds without adjudicating on merits. The Tribunal found that the assessee's explanation regarding non-receipt of notices due to email inactivity, although not fully substantiated with evidence at the CIT(A) level, warranted a fresh look.
Key Issues
Whether the CIT(A) erred in dismissing the appeal as non-maintainable and deeming the return invalid solely on the grounds of belated filing, without considering the merits of the case?
Sections Cited
148, 147, 144, 139, 246A, 44AD, 69A, 144B
AI-generated summary — verify with the full judgment below
“5.2.1. I have considered the submissions made by the Appellant. I have also perused the assessment order. I find that the AO has issued notice u/s 148 on 31/03/2021 wherein 30 days time was given to file the return of income for AY 2017-18. The Appellant has, however, filed the return u/s 148 on 06/03/2022 i.e. almost 11 months after issue of notice u/s 148. Infact, the return has been filed a few days before 2017-18) Manish Vashdev Khemchandani passing the assessment order on 14/03/2022. Thus, the return so filed by the Appellant is an invalid return. The AO is, therefore, correct in stating that the Appellant has nof filed any return u/s 148 of the Act. It is, further, observed from assessment order that the AO has issued various notices which have remained uncomplied with. The AO got the non-compliance letter served on the Appellant through VU. Though, the Appellant has submitted that he has partially complied to the notices, however, no evidence has been submitted by the Appellant in this regard. In absence of any evidence evidence contradicting the ground remains unsubstantiated. The Appellant has again not stated correct facts when he says that the AO has not issued any letter to bank seeking relevant bank statement. The AO did issue letter u/s 133(6) to SHRI RENUKAMATA MULTI STATE COOP URBAN SOCIETY LTD seeking bank account statement of the Appellant. The AO observed that there are cash deposits/credits of Rs.31,20,507/ in Appellant account in the above Society. The Appellant has failed to explain the source of such cash deposits/credits, inspite of giving sufficient opportunity of being heard by the AO. Accordingly, the AO has correctly invoked provisions of section 69A and added the said amount of Rs. 31,20,507/-, Grounds are, thus, dismissed.”
Aggrieved by the order of CIT(A), the assessee filed appeal before the Tribunal. The Ld. AR of the appellant has filed a paper book enclosing therein the bank statements, computation of income and other details filed before the CIT(A). He submitted that the notice issued u/s 148 on 07.04.2021 was sent to the registered unit address of the assessee, which was inactive and not used during the relevant period. In view of the above, the assessee could not reply to the notices on time. The non-receipt of notice was due to a bona fide technical lapse and was not deliberate. These facts were brought to the notice of the CIT(A) but he upheld the assessment without appreciating genuine circumstances leading to non-receipt of the notices and without considering the legal position 4 2017-18) Manish Vashdev Khemchandani regarding belated return u/s 148 of the Act. It was also submitted that there AO erred in adding Rs.31,25,507/- as undisclosed receipt without appreciating that the appellant had already shown gross receipt of Rs.43,50,500/- in the return of income filed u/s 148 of the Act. The Ld. AR submitted that the CIT(A) has ignored the submission of the assessee and mechanically upheld the order of AO. He, therefore, requested to set aside the order of CIT(A) and remand the matter back to the file of AO for fresh assessment.
On the other hand, the Ld. Sr. DR supported the order of lower authorities.
He submitted that due to non-compliance by the assessee, AO passed ex parte order u/s 144 of the Act. The response of the appellant before the CIT was also not complete. He would, however, have no objection if the matter is remanded back to the AO.
We have both parties and perused the materials on record. We find that the assessee did not file his return u/s 148 within 30 days from the date of issue of notice u/s 148 on 31.03.2021. He filed the return at the 11th hour of the limitation period. The return was filed on 06.03.2022 and an ex parte order u/s 144 rws 147 was passed on 14.03.2022. The appellant has submitted that due to inactivity of his email id, he did not receive the notices due to which complete details could not be submitted. However, bank statement, computation of income and written submission was filed before the CIT(A) who has completely ignored the same and mechanically upheld the order of AO. He submitted that the appellant is ready to submit all necessary details and he may be granted 2017-18) Manish Vashdev Khemchandani another opportunity to plead his case on merit. The Ld. Sr. DR of the revenue has also not seriously objected to the prayer of the appellant. Considering the totality of the facts discussed above and in the interest of justice, we deem it proper to set aside the order of CIT(A) and restore the matter back to the file of AO for fresh adjudication on all factual and legal issues in accordance with law after granting adequate and reasonable opportunity of being heard to the assessee. The assessee is directed to file explanation and details with supporting evidences expeditiously by not seeking adjournment without valid reason. The grounds are allowed for statistical purpose.
Since we have set aside the order of CIT(A) for fresh assessment order by the AO, the other grounds are academic in nature requiring no adjudication.
We make it clear that we have not expressed any opinion on the merits of the case which the AO shall independently decide in accordance with law after evaluating the issues in light of the submission of the assessee and provisions of the Act.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order is pronounced on 11.03.2026.