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Facts
The assessee's return of income was treated as invalid. Subsequently, based on bank deposits of Rs. 2,43,60,035/-, the assessment was reopened under section 147. Due to the assessee's non-compliance, the assessment was completed ex parte under section 144, and the entire amount was added as unexplained money under section 69A. The CIT(A) upheld the addition and dismissed the appeal as not maintainable due to a 54-day delay in filing.
Held
The Tribunal acknowledged the ex parte assessment and the assessee's non-compliance but, considering the magnitude of the addition and principles of natural justice, granted one final opportunity to the assessee to substantiate the source of deposits. The case is remanded back to the Assessing Officer for fresh adjudication, subject to the assessee depositing a cost of Rs. 5,000/- in the Poor Patient Relief Fund, PGI, Chandigarh within 30 days. Failure to comply with this condition will result in the restoration order being vacated and the CIT(A)'s order reviving.
Key Issues
1. Validity of assessment reopening under section 148. 2. Condonation of delay in filing appeal before CIT(A). 3. Denial of reasonable opportunity of being heard. 4. Confirmation of addition under section 69A for unexplained cash credit. 5. Violation of principles of natural justice regarding notice service.
Sections Cited
148, 147, 144, 69A
AI-generated summary — verify with the full judgment below
Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 14/02/2025 pertaining to Assessment Year 2019-20. 2. In the present appeal Assessee has raised the following grounds:
1. 1. 1. 1. 1. That authorities below have erred in law and facts in reopening the assessment u/s 148 on account of credit entries in bank specially when the reopening is made by Jurisdictional AO.
2. That learned CIT(A)(NFAC) has erred in law and on facts in not condoning the delay of 21 days in filing of appeal before CIT(A).
3. That learned CIT(A)(NFAC) has erred in law and on facts in not providing any reasonable opportunity of being heard as no notice was received on email-id provided in Form 35 the appeal form before CITA.
4. That learned CIT(A)(NFAC) has erred in law and on facts in confirming the additions of Rs. 2,43,60,035/- u/s 69A on account of unaccounted cash credit.
That principles of natural justice has grossly been violated as notices during assessment proceedings were served through Income Tax Portal and neither served physically to Assessee not on the email id provided in ITR.
6. That the appellant craves leave to add, alter, amend or to substitute the above grounds of appeal either before or at the time of hearing of case.
3. Briefly the facts of the case are that the assessee, an individual, filed his return of income declaring total income of Rs.6,02,080/-. The return was treated as invalid. Subsequently, on the basis of information that the assessee had deposited/credited Rs.2,43,60,035/- in his bank account, the assessment was reopened under section 147 of the Income-tax Act, 1961. Statutory notices were issued during reassessment proceedings. As per the assessment order, the assessee failed to comply with the notices and did not furnish satisfactory explanation regarding the source of the deposits. Consequently, the assessment was completed ex parte under section 144 read with section 147 and the entire amount of Rs.2,43,60,035/- was treated as unexplained money under section 69A and added to the income of the assessee.
4. Against the order of the AO the assessee went in appeal before the Ld. CIT(A). The learned CIT(A), as recorded in the impugned order , observed that there was a delay of 54 days in filing the appeal and that no sufficient cause was shown for condonation of delay. The delay was not condoned and the appeal was held to be not maintainable. Notwithstanding the same, the learned CIT(A) also adjudicated the matter on merits and confirmed the addition, holding that the assessee failed to substantiate the source of deposits either before the Assessing Officer or during appellate proceedings.
5. Against the order of the Ld. CIT(A), the assessee preferred in appeal before the Tribunal.
During the course of hearing the Ld. AR submitted that the assessment was completed without proper opportunity and that the assessee is in a position to explain the source of deposits with supporting documentary evidence if one more opportunity is granted. It was prayed that the matter may be restored to the file of the Assessing Officer for fresh adjudication in the interest of justice.
7. Per contra, the Ld. DR relied upon the orders of the lower authorities and submitted that the assessee had failed to comply with notices both at the assessment stage and at the appellate stage and, therefore, no indulgence is warranted.
8. We have considered the rival submissions and perused the material on record. It is evident that the assessment has been completed ex parte and the addition under section 69A has been made by treating the entire bank deposits as unexplained. The record further shows that there has been non-compliance on the part of the assessee at different stages of proceedings. At the same time, considering the magnitude of the addition and the principles of natural justice, we are of the considered opinion that one final opportunity deserves to be granted to the assessee to substantiate the source of deposits with cogent documentary evidence. 8.1 However, it is equally true that the assessee cannot be permitted to prolong litigation or disregard statutory proceedings without consequence. The conduct of the assessee in not properly responding before the lower authorities has resulted in avoidable proceedings and wastage of judicial time. Therefore, while restoring the matter to the file of the Assessing Officer in the interest of substantial justice, we deem it appropriate to impose a cost of Rs.5,000/- (Five Thousand Only) upon the assessee. 8.2 Accordingly, the impugned order of the Ld. CIT(A) is set aside and the issue relating to addition of Rs.2,43,60,035/- under section 69A is restored to the file of the Assessing Officer for fresh adjudication. The assessee shall furnish complete details and documentary evidence explaining the source of deposits. The Assessing Officer shall afford reasonable opportunity of being heard and shall pass a speaking order in accordance with law.