SHRI MOHAMMAD AMIN SOFI,SRINAGAR vs. INCOME TAX OFFICER WARD-2, SRINAGAR
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
Per Udayan Dasgupta, J.M.:
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.
2 I.T.A. No. 358/Asr/2024 Assessment Year: 2017-18 2. Condonation of delay: It is pointed out by the registry that this appeal is filed
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
3 I.T.A. No. 358/Asr/2024 Assessment Year: 2017-18 4. Considering the medical issues put forth by the assessee and also considering
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
4 I.T.A. No. 358/Asr/2024 Assessment Year: 2017-18 assessee is engaged in the business of bakery products and has disclosed the total cash
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):
5 I.T.A. No. 358/Asr/2024 Assessment Year: 2017-18
6 I.T.A. No. 358/Asr/2024 Assessment Year: 2017-18 We find that the opening of cash balance as on 01.11.2016 was Rs.8.84 lakhs
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:
7 I.T.A. No. 358/Asr/2024 Assessment Year: 2017-18
(1) The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T True Copy By Order
