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Facts
The assessee failed to file a return for A.Y. 2017-18, leading to an ex-parte best judgment assessment under Section 144, where the AO added Rs. 1.62 crores to income based on cash deposits during demonetization. The CIT(A) dismissed the assessee's appeal in limine due to a 128-day delay in filing and refused to condone the delay. The assessee contended that a significant cash deposit was a protective assessment belonging to a company whose appeal was also remanded.
Held
The Tribunal condoned a 2-month delay in filing, noting the ex-parte assessment and the remand of a related case. It set aside the matter and remanded it back to the Assessing Officer for fresh assessment, directing the assessee to provide all documentary evidence and the AO to provide a reasonable opportunity of being heard, without expressing any opinion on the merits.
Key Issues
1. Whether the CIT(A) was justified in not condoning the delay in filing the appeal. 2. Whether the ex-parte best judgment assessment under Section 144 should be set aside and remanded for fresh adjudication.
Sections Cited
Section 144, Section 249(3), Section 250, Section 282, Section 61
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: DR. M. L. MEENA & SH. UDAYAN DASGUPTA
ORDER Per Udayan Dasgupta, J.M.:
This appeal is filed by the assessee against the order of the ld. CIT(A) NFAC, Delhi dated 11.09.2024 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the order of the ITO, Ward-1(3), Amritsar u/s 144 of the Act, 1961 dated 29.12.2019. appeal and the main grounds relates to the objection of the assessee in refusing to grant adjournments to the assessee by the ld. first appellate authority and also on the grounds that since the original assessment order is passed u/s 144 without any representation before the Assessing Officer, the ld. CIT(A) had the power u/s 250(i)(a) to restore the matter back to the files of the AO for fresh adjudication, which has not been done in this case.
Brief facts emerging from the records are that the assessee has not filed any return of income and has deposited cash in his bank account during the demonetization period. It is alleged by the AO that there has been a deposit of Rs.50.03 lakhs in cash during the demonetization period in Oriental Bank of Commerce (OBC) A/c No. xxxxxxx00599, apart from other credit entries appearing in the said bank account which is in the name of M/s Purab Infrastructure Projects Ltd. in which the assessee is one of the Director.
It is further observed by the AO that there has been a deposit of Rs.21.06 lakhs in cash in Axis Bank A/c No. xxxxx48286 and credit entries of Rs.1.10 cores in the said bank account plus income from other sources amounting to Rs.1.03 lakhs on the basis of reflection in Form No. 26AS. In absence of any response from the assessee in course of assessment proceedings and in absence of any return on record, the total income has been assessed at Rs.1.62 crores u/s 144 of the Act. adjudicating on the grounds of appeal contained in Form No. 35 on merits. The appeal has not been admitted for hearing on account of delay in filing the same by 128 (one hundred twenty-eight) days, and the ld. first appellate authority dismissed the same refusing to condone the delay as per the provisions of section 249(3) of the Act.
6. Now, before the Tribunal, the ld. AR of the assessee submitted that in course of first appellate proceedings, adjournments were filed, requesting for adjournment for hearing which the ld. CIT(A) has refused to grant and the appeal has been dismissed refusing to condone the delay by 128 days. He submitted that the assessment order has been passed on 29.12.2019 and last date of filing the appeal was 28th Jan., 2020 and Covid period started from 25th March, 2020. As such, he stated that the actual delay was only for the period from 28th Jan., 2020 to 25th March, 2020 which is only two months. He prayed for condonation of the delay for the period of two months on the grounds of non-receipt of the order of the AO in the proper e-mail id because the assessee was not aware of the passing of the order. He further prayed that the order has been passed ex-parte without any hearing and all documentary evidences by way of books of account and other papers and documents are required to be produced before the Assessing Officer for proper adjudication of the matter and as such, he prayed that the matter may please be set aside back to the files of the Assessing Officer. of deposits in Oriental Bank of Commerce which actually belongs to the company of Purab Infrastructure Projects Ltd., in which the assessee is just one of the Directors.
He further submitted that the entire bank deposits are already considered in the hands of the company and is duly reflected in the company’s books of accounts. He further submitted a copy of the order of the Tribunal in the case of Purab Infrastructure Projects Ltd., v. ITO in fir A.Y. 2017-18 order dated 07.08.2025 where the quantum appeal matter is remanded back to the ld. first appellate authority, for adjudication on merits of the case. As such, since it was a case of protective assessment in the hands of the assessee as far as this deposit of Rs.50 lakhs is concerned, he submitted that the matter may please be set aside back to the files of the Assessing Officer to consider all aspect of the matter on the basis of documents and materials to be produced and specially considering the facts that the order has been passed ex-parte u/s 144.
The ld. DR has no objection.
We have heard the rival submissions and considered the materials on record. We condone the delay of two months which has occurred before the ld. first appellate authority and also considering the facts that the original assessment order has been passed ex-parte without any proper representation, we are of the opinion that the examination of source of cash deposits in bank account and explanation of credit card statements and supporting documentary evidences.
Moreover, the cash deposits of Rs.50 lakhs during domestication period in OBC (A/c No. 000599), in the name of the company and its subsequent transfer to the assessee on 07.12.2016, 13.12.2016 and 17.12.2016, needs to be properly explained, regarding its source and subsequent utilization.
As such for proper verification, we set aside the matter back to the AO for fresh assessment and we direct the assessee to file all documentary evidences and submission and to fully co-operate in fresh assessment proceedings.
The assessee to be allowed reasonable opportunity of being heard and notice to be issued as per provisions of section 282 of the Act, 61.
We have not expressed any opinion on merits and all legal issues are left open.
In the result, the appeal filed by 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 10.11.2025 Sd/- Sd/- (Dr. M. L. Meena) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: