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Facts
The assessee, Vidya Sagar Singh HUF, filed an appeal against the CIT(A)'s order, which dismissed the assessee's appeal. The case involved a cash deposit of Rs. 13,34,000 during demonetization, which was added to the assessee's income under section 69A of the Income Tax Act. The assessee contended that proper notices were not served and the assessment proceedings were closed without proper representation.
Held
The Tribunal noted that both the assessment order and the CIT(A)'s order were passed ex-parte due to the lack of proper representation. Considering this, the Tribunal deemed it appropriate to provide the assessee with another opportunity to present their case before the CIT(A).
Key Issues
Whether the appeal before the CIT(A) was dismissed without proper opportunity of being heard, and if so, whether the matter should be remanded for fresh adjudication.
Sections Cited
143(3), 144, 69A, 250, 133(6), 220(2), 251(a), 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PATNA BENCH AT KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)- NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2017-18 dated 01.07.2024, which has been passed against the assessment order u/s 143(3) of the Act, dated 02.12.2019. I.T.A. No.: 8/PAT/2025 Assessment Year: 2017-18 Vidya Sagar Singh HUF Through Karta Santosh Kumar Singh.
The Registry has informed that the appeal filed by the assessee is barred by limitation by 96 days. An application along with an affidavit seeking condonation of delay has been filed by the assessee, the contents of which are as follows: “It is stated that the then karta of the HUF Vidya Sagar Singh expired way back on 24/02/2023 during pendency of appeal. After his death, his son Santosh Kumar Singh is the karta of the HUF. The Ld. CIT(A) has passed order in Appeal No.CIT(A), Patna-2/10886/2019- 20 on 01/07/2024. There was no communication of uploading of this order either on the registered email or registered mobile no. The juri ictional A.O. stationed at Patna on 16/12/2024 has orally communicated the dismissal of appeal and directed the appellant to deposit the demand along with interest u/s 220(2) that the appellant came to know about the adverse order of Ld. CIT(A). Pursuant thereto, the appellant has checked the e-portal of A.Y.2017-18 and found the impugned order under the tab 'For your information' whereas normally the orders are uploaded under the tab 'For your action'. The limitation if counted from the date of order, i.e. 01/07/2024, it can be said that this appeal is a belated appeal. However, it is stated that the impugned order came to the knowledge of the appellant on 16/12/2024 and therefore, according to the appellant, the present appeal is not a belated appeal. An affidavit in support of the averment made in this condonation petition is also attached. However, without entering into controversy, it is respectfully submitted that delay, if any, may kindly be condoned and the appeal may kindly be heard on merits.”
Considering the condonation application and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeals within statutory time limit for which the assessee submits that there is no delay. We, however, condone the delay and admit the appeal for adjudication.
The assessee is in appeal before the Tribunal raising the following grounds of appeal: I.T.A. No.: 8/PAT/2025 Assessment Year: 2017-18 Vidya Sagar Singh HUF Through Karta Santosh Kumar Singh. “1. For that the Ld. CIT(A), NFAC has erred in deciding appeal ex-parte and confirming the addition of Rs. 13,34,000/- made by the A.O.
For that the Ld. CIT(A), NFAC has erred in alleging non-compliance to the notices whereas the fact remains that no such notice either in physical mode or in electronic mode was uploaded on the e-portal of the assessee.
For that the Ld. CIT(A), NFAC has erred in holding that the assessee is not willing to pursue the appeal and has accordingly erred in dismissing the appeal.
For that the Ld. CIT(A), NFAC has erred in not adjudicating any of the grounds raised in the memo of appeal which were supported by statement of facts wherein the sources of deposit of Rs. 13,34,000/- was elaborated.
For that the Ld. CIT(A), NFAC has erred in sustaining the addition of Rs. 13,34,000/- made u/s 69A of the Income Tax Act.
For that the whole order is bad in fact and law of the case and is fit to be restored back to the file of CIT(A) and/or the Assessing Officer particularly in view of insertion of proviso below clause (a) of section 1 of section 251 by Finance (2) Act, 2024 w.e.f. 01/10/2024. 7. For that the other grounds, if any, shall be urged at the time of hearing of the appeal.”
Brief facts of the case are that the assessee derives income from House Property and other sources for AY 2017-18. The return of income was filed on 28.03.2018 showing total income of Rs. 3,42,489/-. The case was selected for limited scrutiny through CASS for the reason of cash deposit during demonetization period. It was noticed that the assessee had deposited Rs. 13,34,000/- in the Bank A/c Nos. 1075104000041335 maintained with IDBI Bank, Motihari Branch, Motihari. Statutory notice u/s 143(2) was issued and duly served upon the assessee but the assessee did not comply. The Ld. AO issued notice u/s 133(6) of the Act to the bank. After analysing the data, he added a sum of Rs. 13,34,000/- u/s 69A of the Act and after relying upon several judicial pronouncements, the income was assessed u/s 144 of the Act assessing the total income of Rs. 16,66,489/-. I.T.A. No.: 8/PAT/2025 Assessment Year: 2017-18 Vidya Sagar Singh HUF Through Karta Santosh Kumar Singh.
1 Aggrieved with the assessment order, the assessee filed appeal before the Ld. CIT(A) stating that the appellant was 86 years old residing at Motihari and he appointed an Advocate who was out of Patna and therefore, a request was made to fix the case after 19.11.2019. The notices sent to Patna address could not be communicated and on the last date fixed on 02.12.2019, the web portal was said to be closed. The assessee’s Counsel approached the Ld. AO with the hard copy of the reply but the same was refused to be accepted stating that the assessment proceedings had been closed. Before the Ld. CIT(A), the source of cash deposit was stated to be out of rent amounting to Rs. 3,30,000/-, sale proceeds of agricultural land of Rs. 10,86,000/- and money received from six sale deeds for sale of land in FY 2015-16 at Rs. 7,30,000/-. The assessee also relied upon the CBDT’s instructions in form of SOPs on “Operation Clean Money” and one of the directions was to submit details of cash deposited in bank during demonetization period with prior approval of Pr. CIT or CIT as submitted on ITBA. The assessee contends that this amount was not found to be undisclosed, and there was no direction of Pr. CIT or CIT available on record as would be evident from the notices issued. The Ld. CIT(A) has noted that even the assessment was completed u/s 143(3) of the Act due to non- compliance on the part of the assessee and it could be presumed that the assessee was not interested in pursuing his appeal therefore, he saw no reason to interfere in the order of the Ld. AO and the grounds of appeal raised by the appellant were dismissed. The Bench noted that in the first page of the assessment order the section has been mentioned as section 143(3) of the Act while on the last page of the order, the section is mentioned as section 144 of the Act. The appeal was dismissed. I.T.A. No.: 8/PAT/2025 Assessment Year: 2017-18 Vidya Sagar Singh HUF Through Karta Santosh Kumar Singh.
2 Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
Rival submissions were heard and the record and the submissions made have been examined. We find that at both the stages of assessment order before the Ld. AO as well as before the Ld. CIT(A) in the 1st appeal, proper representation was not made on behalf of the assessee. Before us the Ld. AR stated that the Karta had expired on 24.02.2023, hence the appeal could not be pursued and represented properly before the Ld. CIT(A) and requested that the matter may be remanded to the Ld. CIT(A) for deciding afresh as the assessee had sufficient evidence for the relief claimed. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld.
We have heard the rival submissions, gone through the facts of the case and perused the record and the submissions made. Both the orders before the Ld. AO as well as before the Ld. CIT(A) are ex parte. Therefore, we deem it appropriate in the interest of justice and fair play that one more opportunity needs to be provided to the assessee to represent his case properly before the Ld. CIT(A). We, therefore, set aside the order of the Ld. CIT(A) and remit the appeal to him to be decided afresh. The assessee shall be allowed an opportunity of being heard and to represent the case by filing evidence for the relief claimed. The Ld. CIT(A) shall also allow and opportunity of being heard to the Ld. AO as per rule 46A of the Income Tax Rules, 1962, if required, and thereby pass an order in accordance with law. For statistical purposes, the rounds of appeal of the assessee are allowed.
In the result, the appeal filed by the assessee is allowed for statistical purposes. I.T.A. No.: 8/PAT/2025 Assessment Year: 2017-18 Vidya Sagar Singh HUF Through Karta Santosh Kumar Singh. Order pronounced in the open Court on 4th April, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 04.04.2025 Bidhan (P.S.) I.T.A. No.: 8/PAT/2025 Assessment Year: 2017-18 Vidya Sagar Singh HUF Through Karta Santosh Kumar Singh. Copy of the order forwarded to:
Vidya Sagar Singh HUF Through Karta Santosh Kumar Singh, Ganga Smiriti, Road No. 12, Rajendra Nagar, Patna, Bihar, 800016. 2. ITO, Ward-6(4), Patna.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Patna Bench, Patna.
Guard File. //// By order