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Facts
The assessee, a Bank Mitra, faced an ex-parte assessment under section 144 of the Income Tax Act, where an addition of Rs. 1,36,14,133/- was made under section 69A for bank deposits treated as unexplained money. The assessee contended that these were public funds collected on behalf of the bank. The appeal to the CIT(A) was rejected, and the subsequent appeal to the ITAT was filed with a delay of 144 days.
Held
The Tribunal condoned the 144-day delay in filing the appeal after finding the assessee's explanation credible. Considering that the assessment was ex-parte and the assessee had no representation before the Assessing Officer, the Tribunal restored the matter to the AO's file. The AO is directed to conduct a de-novo assessment, providing the assessee a reasonable opportunity to produce all relevant evidence.
Key Issues
Whether an ex-parte assessment under Section 144, resulting in an addition under Section 69A for alleged unexplained cash deposits, was justified without providing proper opportunity. Whether the delay in filing the appeal should be condoned.
Sections Cited
Section 250(4), Section 250(5), Section 69A, Section 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Before: BEFORE SHRI GEORGE MATHANMANISH AGARWAL
Assessment Year : 2017-2018 Kanhu Charan Kanhu Charan Gouda Vs. ITO,Khordha Rohibanka, Odagaon, Nayagarh, Odagaon, Nayagarh, Khordha-7520 752090 PAN/GIR No. No.AUBPG 5312 Q (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : Shri K. K. Bal, Adv Revenue by : Shri S.C.Mohanty, Sr DR : Shri S.C.Mohanty, Sr DR Date of Hearing : 23/01/20 2025 Date of Pronouncement : 23/01/20 025 O R D E R Per Bench This is an This is an appeal filed by the assessee against the order of the ld appeal filed by the assessee against the order of the ld CIT(A), CIT(A), NFAC, NFAC, Delhi Delhi dated dated 26.4.2024 in in Appeal Appeal No. No. NFAC/201617/10307 NFAC/201617/10307110 for the assessment year 2017-2018. 2018.
Shri K.K.Bal, K.K.Bal, ld AR appeared for the assessee and Shri the assessee and Shri S.C.Mohanty, Sr. DR appeared for the revenue. DR appeared for the revenue.
The assessee has raised following grounds of appeal: The assessee has raised following grounds of appeal: The assessee has raised following grounds of appeal:
P a g e 1 | 4
For that the order of the forum below is arbitrary, illegal and unjust both in fact and law, hence liable to be quashed.
2. For that Ld, CIT(A) erred in passing order by violating the provisions of sec 250(4) & (5) of the IT Act and without adjudicating the grounds taken. Therefore the impugned order is arbitrary and illegal and deserves to quashed and set aside.
3. For that the Ld. CIT(A) erred in passing an exparte order for prosecution without proper communication of notices and without providing sufficient opportunity being heard. Therefore theorder passed by violating the principles of natural justice id not sustainable and deserves to be quashed and set aside. 4. For that the erred in making addition of the 69A of the Income tax act the entire credits of public money in the Bank account bearing No-2790002100001224 in Punjab National Bank at Rs. 1,36,14,133/- used as a Banking correspondence Account. Since the credits in the Bank account are public money and not the money of the Assessee the additions is not sustainable and deserves to be deleted. 5. For that Ld. A.O erred in treating the cash deposits received for and on behalf of the bank and credits by Bank by debiting the account of customers who have withdrawn through Micro ATM provide to the Assesse as unexplained money without understanding the fact in proper prospective. Therefore the addition is non application of mind and deserves to be deleted.” 4. The appeal is barred by limitation by 144 days. The assessee has filed condonation petition 21.11.2024 supported by affidavit, stating the reason that although the appealorder was uploaded by NFAC in the portal on 26.4.2024 but same came to the knowledge of the assessee on 10.10.2024. In this regard, it is stated that since the assessee was unware about assessing the portal and totally dependent on his counsel, he could not know the status f the appellate proceedings. Further, due to the illness of the father of the assessee, he was staying at Bhubaneswar, which is more than 150 kms from his village. It is stated that as soon as the P a g e 2 | 4 assessee came to know about the appellate order, he immediately contacted his counsel to file the appeal before the Tribunal, for which, there was delay of 144 days. It is prayed that the delay in filing the appeal be condoned and appeal be decided on merits.
After considering the petition and hearing the parties, we found that the explanation furnished by the assessee has not been found to be false. We, accordingly, condone the delay of 144 days and admit the appeal for adjudication.
We have gone through the orders of the Assessing Officer and ld CIT(A). We observe that there was no representation from the side of the assessee before the Assessing Officer, which resulted into an exparte assessment order passed u/s 144 of the Act. It is submitted by ld AR that the assessee is a Bank Mitra and collect the money from the customers on behalf of the bank and deposit the same in the bank account for onward transmission to the Bank. The Assessing Officer without considering the same has made addition of total deposit in the bank as unexplained money of the assessee. It is stated by ld AR that if the matter is restored to the file of the Assessing Officer, the assessee will produce all the relevant documents/evidences regarding cash receipt from the customers on behalf of the bank. In view of above, as the assessment order has been passed u/s.144 of the Act, in the interest of justice, the issues in this appeal are restored to the file of the Assessing Officer for making the assessment P a g e 3 | 4 denovo after providing reasonable opportunity of hearing to the assessee. The liberty is granted to produce all such evidences as are required for adjudication of the issue afresh by the Assessing Officer.
In the result, appeal of the assessee stands partly allowed for statistical purposes.
Order dictated and pronounced in the open court on 23/01/2025.