RAJNESH KUMAR,SITAPUR vs. THE INCOME TAX OFFICER, SITAPUR

5. The addition upheld is highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon by Ld. Lower authorities.”

3. It is noted that the appeal is barred by limitation for 235 days. The assessee has filed an application seeking condonation of delay along with supporting affidavit. Ld. Counsel for the assessee Shri K. R. Rastogi, CA reiterated the submissions as made in the application seeking condonation of delay. It is stated that the assessee is an illiterate person residing in a remote area of Sanda, Laharpur, District Sitapur, and there was no proper facility available at the relevant time. He contended that the e- profile ID belonged to the assessee’s advocate, Shri Ayaz Ahmad Ayyubi but unfortunately, the Ld. counsel for the assessee had been suffering from terminal cancer and was undergoing medical treatment during the relevant period. Due to such medical exigency, the appeal could not be filed in time by the Ld. counsel, nor could a petition seeking condonation of delay be submitted. Further, he took us through the medical reports of Shri Ayaz Ahmad Ayyubi, Advocate. Under the facts and circumstances of to 304/LKW/2025024 Page 3 of 10 the present case, it was pleaded that a liberal view may be adopted and the impugned orders may please be set aside.

4. On the other hand, the learned Departmental Representative for the Revenue, Shri R. R. N. Shukla, opposed the submissions of the assessee and contended that the assessee ought to have been vigilant and should have filed the appeal within the prescribed period of limitation. He further contended that there was no representation on behalf of the assessee even before the lower authorities, which clearly demonstrates the negligence on the part of the assessee. Accordingly, he submitted that the appeal deserves to be dismissed on the ground of limitation alone.

7. On the other hand, the Ld. Departmental Representative for the Revenue opposed the submissions and supported the orders of the lower authorities. He contended that it was incumbent upon the assessee to prove the nature and source of the amounts deposited in the bank account. He further contended that undisputedly a sum of Rs.63,07,000/- was deposited by the assessee in cash in the bank account maintained by him with Oriental Bank of Commerce. Therefore, he submitted that there is no illegality in the order of the Assessing Officer, as the same was passed after due consideration of the material as available on record. to 304/LKW/2025024 Page 5 of 10 8. We have heard the Ld. Representatives of the parties and perused the materials available on records. It is seen that the assessee had disclosed a total turnover of Rs.75,10,075/- and declared profit by applying the provisions of Section 44AD of the Act @ 8% amounting to Rs.6,00,807/-. The Assessing Authority in para no. 4.5.2 of the assessment order, has stated that the payments made by the above entities on purchase of liquor and collected tax at source u/s 206CA of the Act does not appear to be made in the mode of cash. While there appears to be a business of liquor sales, in the absence of any explanation from the assessee, the payments as made by these entities are taken as made through non-cash mode. Which means, the cash deposits are not made out of the liquor sales. Thus, the finding of the AO is based on guess work. Nothing is brought on record that the stock was not verifiable. It is not the case of the Assessing Officer that there were no sales but on account of absence of proper explanation on the part of the assessee impugned addition was made drawing adverse inference. The Ld. CIT(A) has not given any finding and dismissed the appeal on the ground of limitation. Since there was reasonable cause for the absence of the assessee before the Ld. CIT(A). We hereby set aside the impugned order and restore the assessment to the file of the AO who would frame assessment fresh in accordance with law after duly considering the explanation offered by the assessee. The assessee is directed to cooperate in the assessment proceedings by furnishing all requisite details as may be called for by the Assessing Authority. The grounds raised in this appeal are allowed for statistical purposes. The appeal of the assessee in is allowed for statistical purposes. to 304/LKW/2025024 Page 6 of 10

9. Now, coming to the assesse’s appeal in (Penalty appeal), pertaining to the A.Y. 2015-

16. The assessee has raised the following grounds of appeal: -

1. The Ld. CIT(A), NFAC without appreciating that delay in filing of the appeal, there was a reasonable cause being ‘MEDICAL REASONS OF ADVOCATE AYAZ AHMAD AYYUBI”, Sitapur and Assessee is living in Remote Area and was not aware about e-profile system, hence he is not aware about passing of Penalty Order u/s 271(1)(c) and Assessment Order. Thus the rejection of Condonation of delay Petition and dismissing the appeal solely on this ground by Ld. C.IT.(A), NFAC is not justified.

2. That penalty of Rs. 20,45,000/- imposed u/s 271(1)[c] of I. T. Act without appreciating that in the assessment order penalty is initiated for concealment of Income, however in the present Penalty Order, the penalty has been imposed “Furnished inaccurate Particulars of such Income” as per details given in the Penalty Order. Hence, Ld. A. O. has not imposed the Penalty on the basis of the Assessment Order. Accordingly, the. present Penalty of Rs. 20,45,000/- imposed u/s 271(1)(c) of I. T. Act is bad in the eyes of Law.

3. The Ld. Authorities below failed to appreciate that addition, of Rs. 63,07,000/- made in the Assessment Order being Cash Deposit in Bank Account on different dates in spite of the fact that the Source of Cash Deposit was Cash Sale of Country Liquor on day to day basis deposited in the Bank on different dates and such deposit in Bank are utilized for payment of Purchase Amount of Country Liquor to Supplier through Banking Channel on which due TCS has also been deducted for which credit of tax has also been allowed by Ld. A. O. hence no penalty should be imposed.

4. That the Return filed u/s 44AD of I. T. Act w. r. t. Sale of Country Liquor Rs. 75,10,075/- on Retail Basis, at an Income of Rs. 6,00,807/- and Net Taxable Income at Rs. 5,27,750/- and also accepted by Ld. A. O. Thus, the addition of Rs. 63,07,000/- being Cash Deposit in Bank on different dates out of cash sale of Country Liquor is invalid. Thus, the imposition of penalty is also invalid.

5. The Penalty imposed is highly excessive, contrary to the facts, law and principal of natural justice without providing sufficient time and opportunity to have its say on the reasons relied upon.” 10. It is noted that the present appeal is barred by limitation for 235 days. The assessee has filed an application along with supporting affidavit seeking condonation of delay. The parties have adopted the same arguments as were in ITA. No.301/LKW/2025. For the same reasoning, the delay is condoned and the appeal is admitted for adjudicating on merits.

1. The Ld. CIT(A), NFAC without appreciating that delay in filing of the appeal, there was a reasonable cause being ‘MEDICAL REASONS OF ADVOCATE Ayaz Ahmad Ayyubi”, Sitapur and assessee is living in Remote Area and was not aware about e-profile system, hence he is not aware about passing of Penalty Order u/s 271(1)(b) and Assessment Order. Thus, the rejection of Condonation of delay Petition and dismissing the appeal solely on this ground by Ld. C.IT.(A), NFAC is not justified.

2. That penalty of Rs. 20,000/- imposed u/s 271(1)(b) of I. T. Act without appreciating that due to unavoidable circumstances being MEDICAL REASONS OF ADVOCATE AYAZ AHMAD AYYUBI, Sitapur, who is handling Taxation Matter and keeping e-profile password, further assessee is living in Remote Area and was not aware about e-profile system, hence he is not aware about passing of penalty order u/s 271(1)(b) and assessment order. Thus, penalty of Rs. 20,000/- imposed u/s 271(1)(b) of I. T. Act is bad in the eyes of law.

3. The Penalty imposed is highly excessive, contrary to the facts, law and principal of natural justice without providing sufficient time and opportunity to have its say on the reasons relied upon.” 13. It is noted that the present appeal is barred by limitation for 235 days. The assessee has filed an application along with supporting affidavit seeking condonation of delay. The parties have adopted the same arguments as were in ITA. No.301/LKW/2025. For the same reasoning, the delay is to 304/LKW/2025024 Page 8 of 10 condoned and the appeal is admitted for fresh adjudicating on merits.

2. That penalty of Rs. 5,000/- imposed u/s 271F of I. T. Act without appreciating that Assessee is not properly educated and living in remote area of District Sitapur. He has been advised by the Local Advocate that his income is below from the Taxable Limit therefore, he is not required to file Return u/s 139 of I. T. Act. Thus, there was a reasonable cause for not filing of Return u/s 139(1) of I. T. Act. Thus, penalty of Rs. 5,000/imposed u/s 271F of I. T. Act is bad in the eyes of law.

by the assessee are allowed for statistical purposes.

18. In the result, these appeals of the assessee are allowed for statistical purposes. Order pronounced in the open Court on 09/01/2026.