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Facts
The assessee deposited Rs. 11.86 lakhs cash during the demonetization period, leading to an ex-parte assessment u/s 144 where this amount was added u/s 69A. The first appeal before CIT(A) was dismissed for non-compliance. The assessee filed a delayed appeal to the ITAT, citing illiteracy, consultant's lapse, and medical issues, and presented fresh evidence (cash book) to explain the deposits as sales proceeds from his bakery business.
Held
The Tribunal condoned the 122-day delay, deeming it unintentional, and remanded the case back to the CIT(A) for fresh adjudication on merits. The assessee was directed to produce all supporting documentary evidence, including the cash book, before the CIT(A), who could obtain a report from the AO on the fresh evidence.
Key Issues
Condonation of delay in filing appeal; proper adjudication of the source of cash deposits during demonetization, especially with new evidence.
Sections Cited
250(6), 144, 142(1), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. MANOJ KUMAR AGGARWAL & SH. UDAYAN DASGUPTA
This appeal is filed by the assessee against the order of the ld. CIT(A) NFAC, Delhi dated 30.11.2023 passed u/s 250(6) of the Income Tax Act, 1961 which has emanated from the order of the AO, Ward 2, Srinagar passed u/s 144 of the Act, 1961 dated 22.12.2019. belatedly by 122 (One hundred twenty-two) days. The assessee has filed an application for condonation of delay stating the fact that the order of the ld. first appellate authority dated 30.11.2023 has not been received by the assessee physically by post, and it was not known to the assessee that the said order has been served or issued through e-filing portal, because the assessee being illiterate, was not able to operate any computer system, or even his smart phone and is entirely dependent on the tax consultant, who never informed or intimated the assessee regarding the order of the ld. first appellate authority being passed ex-parte. Subsequently, when he has been informed by his tax consultant some time in the month of May, 2024, the assessee took necessary steps to appoint his new counsel who helped him to file the appeal before Income Tax Appellate Tribunal which was filed on 14th June, 2024, belated by 122 days. He further submitted that the assessee was also at fault in not being able to pursue his lawyer earlier because of his lumber disc herniation problem and was advised bed rest by the doctors who has also resulted in this delay. The assessee prayed for condonation of the delay and for admission of the appeal to be decided on merits.
The Ld. DR has no objection on the issue of condonation the non-cooperation of his earlier counsel, we find that the delay is not intentional or willful in nature and we condone the delay and admit the appeal to be heard on merits.
Brief facts emerging from the records are that the assessee has deposited cash in his bank account during the demonetization period amounting to Rs. 11.86 lakhs and in absence of any return being filed in response to notice u/s 142(1) of the Act, the assessment has been completed ex-parte u/s 144 on a total income of Rs. 14.02 lakhs (including Rs.11.86 lakhs u/s 69A of the Act being the deposit of SBN and Rs.2.15 lakhs being the business profits calculated @ 8% of the remaining deposits in bank account).
The matter caried in appeal has been dismissed by the ld. first appellate authority in absence of any response to notice dated 25.11.2021, 10.11.2022 and final show cause notice on 14th July, 2023, without adjudication on the grounds contained in Form No. 35 on merits of the case.
Before the Tribunal, the ld. AR of the assessee, submitted documentary evidences containing bank statements of Jammu & Kashmir Bank where the cash has been deposited by the assessee during the demonetization period along with the copy of cash book for the entire financial year generated from the computer system, along with the copies of the balance sheet and computation of income and submitted that the receipts over the entire financial year in the cash book which is also the explanation of deposits of cash in bank account during the demonetization period, which is come out of sale proceeds of such bakery products. However, he was fair enough to admit that all documents are fresh evidence which has never been produced before the lower authorities and has made an application for acceptance of additional evidence under Rule 29 of ITAT Rules, and has prayed for an opportunity of producing the said documentary evidences before the lower authorities for examination of the same.
The ld. DR relied on the order of the ld. CIT(A) but has no objection, if the matter is remanded back to the files of the ld. first appellate authority for adjudication on merits of the case after examination of supporting documentary evidences.
We have heard the rival submissions and considered the materials on record and we find that the cash deposit in bank during the demonetization period by a business concern needs to be explained by production of cash book which the assessee has filed before us, (pg. 5 to 15 of paper book), (cash book entries during demonetization period are made part of this order as under): and there are cash deposits in bank as well as receipts against sales recorded in such cash book for the period of 1st November, to 8th November but the balance of cash as on 08.11.2016 is not recorded.
However, in the interest of justice, the matter is remanded back to the files of the ld. CIT(A) for consideration of all the materials and evidences on record and we direct the assessee to file copies of the cash book along with the supporting documentary evidences to explain the source of cash deposit in bank during the demonetization period and to fully cooperate in appellate proceedings, and necessary report may be obtained from A.O. regarding fresh evidence as per provisions of law.
The assessee will be allowed reasonable opportunity of being heard.
We have not expressed any opinion on merits of the case.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 21.11.2025 Sd/- Sd/- (Manoj Kumar Aggarwal) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: