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Facts
The assessee's appeal was dismissed by the CIT(A) for being delayed by 39 days, leading to the confirmation of the Assessing Officer's addition of Rs. 20,77,507/-. The addition was made on account of cash deposits during the demonetization period and other credit entries, treated as unexplained money under Section 69A of the Income Tax Act.
Held
The Tribunal found that there was no inordinate or intentional delay in filing the appeal before the CIT(A) and that the assessment was completed under Section 144 without proper verification. Therefore, in the interest of justice, the matter was restored to the Assessing Officer for a fresh assessment order, with a direction to provide a reasonable opportunity to the assessee.
Key Issues
Whether the appeal filed before the CIT(A) should be admitted despite a delay, and if the addition made by the Assessing Officer under Section 69A and Section 115BBE is justified.
Sections Cited
69A, 115BBE, 234A, 271AAC, 272A(1)(d), 271F, 144, 44AD
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िनधा�रती की ओर से /Assessee by Shri P.M. Jagasheth. CA राज� की ओर से /Revenue by Shri Mukesh Jain– Sr-DR सुनवाई की तारीख/Date of hearing 11.12.2024 उद्घोषणा की तारीख/Date of 03.01.2025 pronouncement Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of National Faceless Appeal Centre, Delhi [for short to as “NFAC/Ld.CIT(A)] dated 30.07.2024 for assessment year (AY) 2017-18, which in turn arises out of assessment order passed by Assessing Officer under section 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) 05.12.2019. The assessee has raised following grounds of appeal:
1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition Rs.20,77,507/- on account of cash deposited during demonetization period and cash deposited excluding demonetization period and other credit entries in bank account treated as alleged unexplained money u/s 69A of the Income (A.Y.17-18) Anil Singh H. Rajput Tax Act, 1961 and also erred in applying provisions of section 115BBE of the Income Tax Act at rate of 60%.
2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in invoking provisions of Section 15BBE when the case does not fall within the relevant provisions of that section and has further erred in accepting the returned income.
3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in charging interest of Rs.4,65,392/- u/s 234A of the Income Tax Act,1961.
4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in charging interest of Rs.5,29,584/- u/s 234A of the Income Tax Act, 1961.
5. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penal proceedings under section 271AAC of the I.T. Act, 1961.
6. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penal proceedings under section 272A(1)(d) of the Income Tax Act,1961.
7. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in initiating penal proceedings under section 271F of the Act.
8. On the facts and in the circumstances of the case as well as the law on the subject, the case appellant craves for admission of addition evidence in the interest of natural justice and equity.
9. It is therefore prayed that the above addition may please be deleted as learned members of the Tribunal may deem it proper. 10.Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.”
(A.Y.17-18) Anil Singh H. Rajput 2. Rival submissions of both the parties have been heard and record perused. The Ld. Authorized Representative (Ld.AR) of the assessee submits that assessment was completed under section 144 of the Act on 05.12.2019. The Assessing Officer while passing assessment order made addition on account of cash deposit during demonetization period and taxed the same under section115BBE of the Act. The Ld. AR of the assessee further submits that notice issued by Assessing Officer were not received by assessee. The tax consultant of assessee, Shri Akshay Ashwinkumar Sumwala, handling the income-tax mater of assessee. He has mentioned his mobile and e-mail on ITBA portal, if any, send on such e-mail and mobile of Shri Akshay Ashwinkumar Sumwalawho was not intimated assessee. The assessee came to know about passing assessment order when recovery notice dated 03.02.2020 was served upon assessee, copy of demand notice dated 03.02.2020 along with affidavit of assessee is filed on record. On receipt of demand notice, assessee immediately filed appeal before Ld.CIT(A) on 12.02.2020. Though, appeal was filed immediately on coming to know about the addition made in assessment order. However, there was delay of 39 days from the actual date of assessment order. The assessee in form-35 has mentioned that there is delay in filing appeal due to unavoidable reasons. The Ld. CIT(A) not condone the delay and dismissed appeal as unadmitted. Resultantly, the addition made by Assessing Officer was confirmed. The Ld. AR of the assessee submits that there was reasonable cause for condonation of delay. In fact, the assessment was completed under section 144. The consultant of the assessee has mentioned his mobile and e-mail on ITBA (A.Y.17-18) Anil Singh H. Rajput portal, if any, send on such e-mail and mobile of Shri Akshay Ashwinkumar Sumwalawho was not intimated assessee. The Ld. AR of the assessee submits that assessee has a good case on merit and is likely to succeeds if one more opportunity may be allowed to assessee to contest his case before Assessing Officer with a direction to allow opportunity of being heard to assessee and to pass fresh assessment order. The delay in filing appeal was not very long and inordinate. He made specific prayer that matter may be restored back to the file of Assessing Officer instead of Ld.CIT(A) to avoid the long drawn procedure of remand report. In that event of filing some evidence or submission.
On the other hand, Ld. Senior Departmental Representative (Ld. CIT-DR) for the Revenue submits that sufficient opportunities were allowed to assessee by Assessing Officer as well as Ld.CIT(A), thus assessee does not deserve any further opportunity. Even if, the Bench is of the opinion that assessee deserves any further opportunity, matter may be restored back to the file of Assessing Officer with the direction to assessee to be more vigilant and to make proper compliance in time as and when called for.
We have considered the rival submissions of both the parties and have gone through order of lower authorities carefully. We find that the Assessing Officer passed assessment order under section 144 by taking view that during demonetization period, assessee has made cash deposit of Rs.10,74,000/- in his bank account. The Assessing Officer noted that various notices were issued by him through ITBA system including one notice through speed post. The Assessing Officer noted that no response was made by assessee. For the year (A.Y.17-18) Anil Singh H. Rajput under consideration, the assessee filed return belatedly, which was treated as invalid. The Assessing Officer noted that assessee made following deposit: “Bank account No.912020025658730 held with the Axis Bank, Katargam, Surat Cash deposits made Cash deposits during Other credits Total credits (cash during the FY (excluding (excluding cash) cheques/transfer in) demonetization demonetization period (i.e. from period) 09.11.2016 to 30.12.2016) Rs.1,00,000/- Rs.9,03,507/- Rs.20,77,507/- Rs.10,74,000/- 9. As evident from the above chart, the assessee has made total cash deposits of Rs.11,74,000/- during the FY 2016-17 and also received funds other than cash amounting to Rs.9,03,507/- totalling of which arrives at Rs.20,77,507/-“ 5. The Assessing Officer made addition and entire cash deposit during the year, in the assessment order passed under section 144 of the Act. On appeal before Ld. CIT(A), the appeal of assessee was dismissed as unadmitted. The Ld. CIT(A) not condoned the delay of 39 days in filing appeal. Resultantly, appeal was dismissed as” unadmitted”. On considering the submission of Ld. AR of the assessee and affidavit filed by assessee, we find that there was no inordinate or intentional delay in filing appeal before Ld.CIT(A). We find that assessee filed his return of income for assessment year 2017-18 on 12.08.2019 declaring income of Rs.3,07,453/- under section 44AD. The assessee has shown turnover of Rs.36,89,520/-. The Assessing Officer has added entire cash credit as well as other credit of transfer. The entire cash deposit can never be treated income of assessee. However, fact remained the same that assessment was completed under section 144 of the Act without verification of various transactions in the bank and nature of business carried out by assessee. Therefore, considering the peculiar facts of the present case and further in (A.Y.17-18) Anil Singh H. Rajput view of the Ld. CIT(A) has dismissed the appeal in ex parte order without discussing the merit of the case. Therefore, in the interest of justice, we deem it appropriate to restore the appeal back to the file of Assessing Officer to pass the assessment order afresh. Needless to direct that before passing order afresh, the Assessing Officer shall provide reasonable opportunity to the assessee. The assessee is also directed to be more vigilant and to make timely compliance of the notice issued by Assessing Officer. With these directions, the grounds of appeal
of assessee is allowed for statistical purposes
6. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 03/01/2025.
Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद�/Accountant Member �ाियक सद�/Judicial Member सूरत / Surat Dated: 03/01/2025 Dkp Outsourcing Sr.P.S* आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant ��थ�/ The Respondent आयकर आयु�/ CIT िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT गाड� फाईल/ Guard File // True Copy // By order/आदेश से,
सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत