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Facts
The assessee, an LPG distributor, faced an ex-parte assessment u/s 144 for AY 2017-18, with additions related to SBN deposits during demonetization and other bank credits, as the assessee could not represent the case due to a medical emergency. The first appellate authority (CIT(A)) dismissed the assessee's appeal in limine under section 249(3) citing a delay of over two years in filing.
Held
The Tribunal found that the actual delay in filing the appeal was only 59 days, satisfactorily explained by medical certificates, with the remaining period covered by TOLA extensions. It noted that the assessment was ex-parte, ignoring the uploaded tax audit report and financials. Therefore, the Tribunal condoned the delay and remanded the case back to the AO for fresh assessment, directing the AO to consider relevant circulars and provide the assessee a proper opportunity of hearing.
Key Issues
Condonation of delay in filing appeal; validity of ex-parte assessment and non-consideration of uploaded documents; treatment of SBN cash deposits during demonetization for an LPG distributor.
Sections Cited
Section 250, Section 144, Section 249(3), Section 44AB, Section 69A, Section 282, Rule 34(4) of Income Tax (Appellate Tribunal) Rules, 1963
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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. UDAYAN DASGUPTA & SH. KHETTRA MOHAN ROY
This appeal is filed by the assessee against the order of the ld. CIT (A) NFAC, Delhi dated 24.08.2023 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the order of the AO, Ward, Jalandhar passed u/s 144 of the Act, 1961 dated 18.12.2019. main contention is that the Ld first appellate authority has refused to admit the appeal for adjudication on merits of the case due to the fact that the appeal is filed belatedly, by more than two years, and is hit by the provisions of section 249(3) of the Act 61 and the other ground of appeal is against the merits of the case.
Brief facts emerging are that the assessee is a dealer of BPCL (Bharat Petroleum Corporation Ltd) engaged in the business of distribution of LPG cylinders (liquid petroleum gas) , and the gross receipts for the year amounted to Rs. 7.14 crores, which has been duly disclosed in audited trading and profit and loss account uploaded with TAR u/s 44AB of the Act 61, within the extended time , but the contents of the TAR has been ignored and not given any cognizance by the AO in course of assessment proceedings, due to the inability of the assessee to represent the case on account of medical emergency.
Assessment has been completed ex parte, in absence of any ITR being filed ( 4. though TAR has been uploaded in the portal) , and the assessment has been completed on a total income of Rs. 1.64 crores (including an addition of Rs.1.23 crores u/s 69A being deposit of SBN during demonetization ) plus an addition of Rs.41.01 lakhs estimated @ 10% of remaining credits in bank ( excluding SBN ) . limine, by invoking the provisions of section 249(3) of the Act , refusing to admit the appeal for adjudication on merits , because the appeal was belatedly filed which was delayed by more than two years.
Now, the assessee is in appeal before the tribunal on the grounds contained in the memorandum of appeal.
In course of hearing the Ld AR of the assessee, filed a short synopsis with the computation of delay in filing the appeal before first appellate authority and submitted that the actual delay in filing the appeal was only of 59 (fifty nine days) which was on account of medical emergency, and rest of the period is covered by the extension under TOLA, and in the instant case the appeal has been efiled on 22nd January, 2022 (with the extended period itself).
The summary of the calculation as submitted explaining the delay are as follows:
18th December, 2019 Order passed by AO : 17th January, 2020 Due Date of filing 30 days time : 15th March , 2020 Actual delay only 59 days till 25th February, 2022 Period covered under COVID The actual delay is only 59 days after excluding of COVID period .
In order to explain the delay from 17th January, 2020 to 15th March, 2020 , the 9.
Ld AR has submitted medical certificates from “New Lifeline Multispeciality Hospital “, Bhatinda , certified by Dr Rajinder Pal Singh , Neuropsychiatrist , that the assessee ( patient ) was under medical treatment since year 2018 and is suffering from OC2 model depression ( placed in page 32 of PB ) and treatment is still ongoing. There are other medical certificates issued by “ Global Healthcare “ Bhatinda , during the period August 2015 through may 2017 , along with copies of prescriptions, as evidence that the assessee was under continuous medical treatment ( placed in page -33 of PB ) .
On merits of the case he submitted that the assessee is a distributor of LPG cylinders (under BPCL) and sale proceeds collected from LPG consumers, has been deposited in bank account and the deposit of SBN in bank during demo period was perfectly legal because the assesee being LPG dealer, acceptance of SBN was permitted by the Government up till 15th December, and the cash deposit thereafter, in bank account are out of fresh collection of sale proceeds against new currency. and also prays for a proper opportunity of hearing to explain his case along with supporting documents including books of accounts, audited financials, vis a vis the tax audit report in form 3CB and 3CD already on record, and in terms of Government notification no 2653 dated 08/11/2016, which permits acceptance of SBN by LPG distributors during demo period and submits that no adverse inference should be drawn in this case.
The Ld. DR relies on the order of the Ld first appellate authority but has no objection if the matter is remanded back to the AO for examination of books of accounts and for completion of fresh assessment.
We have considered the materials on record and the rival arguments and we find that in the instant case the delay of 59 (fifty nine days) has been satisfactorily explained by the assessee, supported by medical certificates and the rest of the period are covered by extension under TOLA and the appeal itself has been filed before the first appellate authority within the extended period.
Secondly, we find that the assessment has been completed ex-parte, without hearing the assessee and without considering the tax audit report and audited financials uploaded in online portal within due time u/s 44AB of the Act 61 and available for consideration before the AO. explained by production of regular cash book, before the AO along with supporting documentary evidences, invoices, bank statements, and all other relevant particulars.
As such we are of the opinion that interest of justice will be served if the matter is set aside back to the files of the AO for fresh assessment as per provisions of law taking into consideration the relevant board circulars and Government notifications applicable to LPG distributors . The assessee is also directed to file all documentary evidences to explain his return and to fully cooperate in fresh proceedings.
The assessee will be allowed proper and reasonable opportunity of being heard and notice to be issued as per provisions of section 282 of the Act (r.w.r. 127 of Rules 62).
We have not expressed any opinion on merits on the documents produced before us and all legal issues are left open.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 18.11.2025.