RAJESH KUMAR RATHORE,SEHORE vs. INCOME TAX OFFICER- WARD 5, SEHORE, SEHORE
Facts
The assessee, an individual trader, made cash deposits of Rs. 3,45,00,000/- in his bank account for A.Y. 2018-19 but did not file an Income Tax Return. Reassessment proceedings were initiated, and notices were sent to an email ID which the assessee claimed belonged to his erstwhile counsel, leading to non-receipt of communication and an ex-parte assessment where the deposits were added as unexplained investments u/s 69. The CIT(A) dismissed the assessee's first appeal on grounds of a 596-day delay, without adjudicating on merits.
Held
The Tribunal found that the assessee, being uneducated, had sufficient and plausible reasons for the delay in filing the first appeal, supported by an affidavit, as notices were sent to an incorrect/disputed email ID. The Tribunal held that the ex-parte assessment and the CIT(A)'s order were not on merits. Consequently, the Tribunal condoned the delay, set aside both the CIT(A)'s order and the assessment order, and remanded the case back to the Assessing Officer for a de novo assessment on merits, directing the assessee to cooperate.
Key Issues
1. Whether the CIT(A) erred in not condoning the significant delay in filing the first appeal. 2. Whether the ex-parte assessment was valid when notices were sent to an email ID belonging to an erstwhile counsel, allegedly without proper service to the assessee, thereby violating natural justice.
Sections Cited
253, 250, 147, 144, 144B, 148A(b), 148A(d), 148, 142(1), 133(6), 69, 115BBE, 246A, 249(2), 249(3), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M JOSHI
आदेश / O R D E R
Per Paresh M Joshi, J.M.:
This is an Appeal filed by the Assessee under section 253 of the
income tax Act 1961,[ herein after referred to as the Act for the
sake of brevity] before this Tribunal as & by way of second
appeal. The Assessee is aggrieved by the order bearing Number:-
ITBA/NFAC/S/250/2025-26/1075676691(1) dated 17.04.2025
passed by the Ld. CIT(A) u/s 250 of the Act, which is herein after
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referred to as the “Impugned order”. The relevant assessment
year is 2018-19 and the corresponding previous year period is
from 01.04.2017 to 31.03.2018.
Factual Matrix
2.1 That as and by way of an “ Assessment order” made u/s 147
r.w.s. 144/144B of the Act, the total income of the assessee
was computed & assessed at Rs. 3,45,00,000/-exigible to tax.
No Income Tax Return was filed. The aforesaid “Assessment
order” bears No. ITBA/AST/S/147/2022-23/1050441754(1)
dated 06.03.2023 which is herein after referred to as the
“Impugned Assessment Order”.
2.2 That in the “Impugned Assessment Order” following is
recorded
“As per the information flagged in accordance with the risk
management strategy formulated by CBDT and evidence in
possession of the department, the assessee Shri. RAJESH
KUMAR RATHORE [PAN:AAPPR2617B] had made cash
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deposits amounting to Rs.3,45,00,000/- in the previous
year relevant to A.Y. 2018-19 in ICICI Bank. However, the
assessee has not filed return of income for the relevant
assessment year disclosing the above transactions. In order
to verify the taxability or otherwise of the transactions
stated above, adequate opportunity was afforded to the
assessee by the concerned Jurisdictional Assessing Officer
by issue of notice under section 148A(b) of the Income tax
Act, 1961 for representing the case. However, in response
the assessee did not furnish any reply. In view of the
noncompliance to the notice issued on the part of the
assessee, the Jurisdictional Assessing Officer, relying on
the information available with the Department, passed
Order under section 148A(d) of the Income tax Act, 1961,
dated 31.03.2022 under the belief that income escaped
assessment to the extent of Rs. 3,45,00,000/- together with
notice under section 148 dated 31.03.2022.
The case was subsequently assigned to ReFAC
Assessment Unit for completion of assessment. Accordingly,
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in order to enable the assessee to make appropriate
submissions, the assessee was afforded opportunity by
issue of notices under section 142(1) on 22/08/2022,
21/09/2022, and 11/10/2022. A reminder letter was also
issued to the assessee on 25/10/2022. However, in
response, the assessee neither filed a valid return of
income for the assessment year under consideration nor
chose to furnish any information relevant for completion of
the assessment.
Since the assessee did not comply with the requirements
of notices issued under section 142(1) of the Income tax Act,
1961 as stated above, there is no other alternative but to
complete the assessment based on the information in
possession of the Department. It has to be presumed that
since in spite of sufficient opportunity provided, the
assessee chose to abstain from furnishing any information,
the assessee has no satisfactory explanation to be offered
in connection with the cash deposits transactions narrated
hereinabove.
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A notice u/s. 133(6) issued to the assessee's bankers to
furnish the bank statement for the relevant year. The bank
submitted the bank statements for the year under
consideration. The same has been verified and tallied with
the information.
In view of the facts and circumstances of the case and
after due verification of the information available on record
of the Department, cash deposits amounting to
Rs.3,45,00,000/- made by the assessee in the previous
year relevant to A.Y. 2018-19 in ICICI Bank is to be treated
as income of the assessee as provided under section 69 of
the Income tax Act, 1961.
Section 69 of the Income tax Act, 1961 prescribes that
"where in the financial year immediately preceding the
assessment year the assessee has made investments
which are not recorded in the books of account, if any,
maintained by him for any source of income and the
assessee offers no explanation about the nature and source
of the investments of the explanation offered by him is not,
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in the opinion of the Assessing Officer, satisfactory, the
value of the investment may be deemed to be the income of
the assessee of such financial year.
In view of the above, since the the assessee has not
offered any explanation about the nature and source of the
cash deposits stated above, the amount aggregating Rs.
3,45,00,000/- is to be disallowed under section 69 of the
Income tax Act, 1961 as "unexplained investments", to be
taxed as per the provisions of Section 115BBE of the
Income tax Act, 1961.”
2.3 That it is also recorded in the “Impugned Assessment
Order” that following opportunities were given to the assessee
which is tabulated & is reproduced herein :
“ 1. Details of opportunities given
Type of notice Date of Notice Date of Response Date of Respon Remarks Communication communication compliance of the respon se type if any given assessee se if (full/pa received/ receive rt/adjo not d urnmen received t) 142(1) 22.08.2022 02.09.2022 Not -- -- received
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142(1) 21.09.2022 05.10.2022 Not -- -- received 142(1) 11.10.2022 18.10.2022 Not -- -- received Letter 25.10.2022 - Not -- -- received Show cause 14.02.2023 21.02.2023 Not -- -- notice received
2.4 That the assessee being aggrieved by the aforesaid
“Impugned Assessment Order” prefers the first appeal u/s
246A of the Act before the Ld. CIT(A) who by the “Impugned
Order” has dismissed the 1st appeal of the Assessee on the
grounds & reasons stated therein. The core grounds & reasons
for the dismissal of the 1st appeal are as under:-
“3. It is clear from the above that the order u/s 147 r.w.s. 144 of the Income Tax Act, 1961 was made on 06.03.2023 which got served upon the appellant on 06.03.2023 but the appeal was filed on 21.11.2024 with a delay of 596 days [626 days (from 06.03.2023 to 21.11.2024) - 30 days] ie. beyond prescribed time of 30 days, whereas, the appellant was required to file appeal within 30 days as provided vide section 249(2) on receipt of order u/s 147 r.w.s. 144 of the Income Tax Act, 1961. The appellant has sought condonation of delay in filing the appeal against the assessment order dated
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06.03.2023, which was admittedly appealable up to 06.04.2023. The delay has been attributed to the appellant's lack of education and unawareness of the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961. It is also contended that the reassessment proceedings were conducted under the Faceless Scheme, and that all communications were sent to an email address which allegedly did not belong to the assessee. The appellant came to know about the proceedings only when approached by the jurisdictional tax authorities for recovery of demand. Thereafter, on consulting a tax professional, the appeal was filed along with a request for condonation of delay. While the appellant has placed reliance on his lack of education and knowledge of the proceedings, it is to be noted that under the Faceless Scheme, communications are made electronically through the registered email ID and the e-filing portal, which is the responsibility of the assessee to maintain and monitor. Ignorance of statutory proceedings and failure to update or verify contact details on the official tax portal cannot be treated as sufficient cause under the law. The law mandates a reasonable standard of diligence and responsibility in tax matters, and mere reliance on lack of education or absence of awareness, without any proactive steps taken to ensure compliance, does not constitute a justifiable ground to condone delay. The explanation offered is general in nature, lacks corroborative evidence beyond an affidavit, and does not inspire confidence that the delay was due to reasons entirely beyond the appellant's control. Hence, the reason stated can't be relied upon and therefore, as provided in the section 249(3) of the IT Act,
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I am not satisfied that the appellate had sufficient cause for not presenting the appeal within the specified period. Hence, since, appeal was not filed within prescribed time as provided in the section 249(2) of the IT Act, the same is not admitted. 4. In view of the above facts, the appeal is dismissed for statistical purpose and not required to be adjudicated on merits. 5. In result, the appeal is disposed off.”
2.5 That the assessee being aggrieved by the “Impugned Order”
has preferred the instant second appeal before this Tribunal &
has raised the following grounds of appeal in the Form No. 36
against the “Impugned Order” which are as under:-
“1. On the facts and circumstances of the case and in law, the order passed by the Hon'ble CIT(A) is against the Law of Natural Justice as assessee was not given proper opportunity to represent his case. The order passed is required to be quashed and may kindly be quashed. 2. On facts and circumstances of the case and in law, the Ld. CIT(A) erred in upholding the action of Ld. AO of sustaining the proceedings-initiated u/s 147 of the Act. The order passed in bad in law, void ab initio and without jurisdiction and may therefore may kindly be quashed. 3. On facts and circumstances of the case and in law, the Ld.CIT(A) erred in upholding the action of the Ld. AO in making the addition of Rs. 3,45,00,000/- by treating the cash deposit made by the appellant in bank account as unexplained investment u/s 69 of the Act. 4. The appellant craves leave to add any new ground of appeal OR alter, amend or delete any of the above grounds of appeal. “
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Record of Hearing
3.1 The hearing in the matter took place before this Tribunal on
02.02.2026 when the Ld. AR for & on behalf of the Assessee
appeared before this Tribunal & inter alia contended that the
“Impugned Order” is bad in law, illegal & not Proper. It is
passed in the violation of the principles of natural justice. It
therefore deserves to be set aside. It was contended that the
assessee is an individual. He is doing trading of grains. He also
does trading of “Soyabean”. The assessee had deposited cash of
Rs. 3,45,00,000/- in his bank account which is current bank A/c
of the assessee. During the course of the assessment
proceedings, the assessee has been non-compliant. The assessee
is not regular filer of Income Tax Returns. The email on the
portal was of shyamsundarmantri@yahoo.in. Shri Shyam Sundar
Mantri was erstwhile counsel of the assessee. Some disputes
happened between him and the assessee. However, on the portal,
the aforesaid email remained the same. It was then submitted
that notice(s) u/s 148A dated 19/03/2022, order passed u/s
148A dated 31/03/2022, notice u/s 148 dated 31/03/2022,
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Intimation letter u/s 144B dated 17/08/2022, notice u/s 142(1)
dated 22/08/2022, notice u/s 142(1) dated 21/09/2022,
11/10/2022 & notice dated 25/10/2022, 25/01/2023 & show
cause notice u/s 144 dated 14/02/2023 were all served by the
Income Tax Deptt. at e-mail ID which was
shyamsundarmantri@yahoo.in which was the e-mail id of the
erstwhile counsel of the asseessee. In brief it was contended that
no notice(s) supra were served on the assessee & due to dispute
with the erstwhile counsel Shri Shyam Sundar Mantri no
information /knowledge could be assigned to the assessee
herein. It was thus submitted that the “Impugned Assessment
Order” was passed in an ex-parte manner.
3.2 With regard to the “Impugned Order” of the Ld. CIT(A), it
was submitted that the sole reason for dismissal of first appeal of
the assessee was on account of delay & assessee’s explanation on
delay was not accepted by the Ld. CIT(A). A letter dated
12/03/2025 was filed before NFAC Delhi & Ack. No. -
900556681120325 was tendered across Bar. An intimation
letter/order u/s 154 r.w.s. 147 dated 24.09.2024 was too placed
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on record across bar where interest was requantified at Rs.
3,06,58,880/-. A compilation of all the notices, orders(supra)
during the course of Assessment Proceedings which were served
at shyamsundarmantri@yahoo.in was too placed on record. It
was submitted that total delay before the Ld. CIT(A) was of 596
days i.e. beyond prescribed time of 30 days. In form No. 35 the
following was averred with regard to delay in column No. 15
which is reproduced by us as below-
“ Kindly refer to above subject, Rajesh Kumar Rathore, the
appellant and assessed to Income Tax Officer, Ward-
Sehore, in this regard, we would like to submit as under -
That, the assessment order in the appellants case for
A.Y. 2018-19 was passed on 06.03.2023. The above
referred order was appealable within 30 days from
06.03.2023. Being aggrieved by the said order, appeal
should have been filed on or before 04.04.2023.
Appellant under genuine belief, however, could not do so
for the following reasons:
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That the appellant concerned i.e. Mr. Rajesh Kumar
Rathore is not well educated. Appellant was not even
aware that his case has been selected for reassessment
proceedings u/s 147 of the Income Tax Act, 1961 and the
reassessment proceedings were conducted under
Faceless Scheme. All the notices, order etc. were only
served on mail address registered on e-filling portal.
During the course of reassess-ment proceedings, E-mail
address registered on assessees E-filling portal was
shyamsundermantri@yahoo.in. which does not pertained
to the assessee.
That, due to lack of education and knowledge, no
compliance has been done by the assessee and therefore
assessment order was passed u/s 144.
Further, on follow-up by jurisdictional officers for demand
recovery proceedings, the assessee came to know of the
completed assessment proceedings for A.Y. 2018-19 and
the alleged additions made in his case.
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Furthermore, the appellant has a consulted the tax
consultant and discussed about the notices issued by the
department and has come to know about the compliance
to be made in past which were not made and he is
advised by the consultant to appeal against the order
passed by the Ld. AO, to pray for condonation of delay in
filling of appeal and present his case before the Honble
CIT (A). That, the ap-pellant assures Your Honor that full
cooperation will be extended by the appellant in the
appeal proceedings. The appellant is duly submitting the
affidavit to reaffirm his explanation regarding reason for
delay in filling of appeal.
In view of above facts and circumstances, the delay may
kindly be condoned.
Prayer
It is therefore, most respectfully prayed that since the
delay in filling of appeal is unintentional, bona fide and
the appellant was prevented from sufficient cause due to
reason mentioned above, the delay in filling of this appeal
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may very kindly be condoned so that justice may be
done.
I would request Your Honor to kindly condone the delay
and enter-tain the appeal on merit.”
The copy of the Affidavit dated 09.11.2024 tendered before the
Ld. CIT(A) was too tendered before us which is reproduced by us
as below-
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3.3 In brief basis above the Ld. AR contended that the delay
was not deliberate. It was unintentional. It was bonafide. The
assessee has a substantive right of at least the first-appeal.
Hence, it was prayed that the “Impugned Order” be set aside &
the matter may be remanded back to the file of Ld. AO.
3.4 Per contra, the Ld. DR has left the issue to this Tribunal &
has not opposed contentions of the Ld. AR on the delay aspect
before Ld. CIT(A). The Ld. DR stated that the revenue has no
objection if the matter is remanded back to the file of Ld. AO on
denovo basis . Hearing was then concluded.
Observations Findings & conclusions
4.1 We have to decide the legality, validity and proprietary of the
“impugned order” basis records of the case & the rival submission
canvassed before us.
4.2 We have carefully perused the records of the case and have heard
the submissions.
4.3 We basis records of the case & after hearing & upon
examining the rival contentions of the Ld. AR & the Ld. DR
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canvassed before us, are of the considered view that the
“Impugned Assessment Order” is u/s 144/144B of the Act &
the matter has not been adjudicated and adjudged basis merits.
Even the “Impugned Order” is not on merits. This Tribunal
desires that the total income of the assessee should be computed
and assessed on the real time basis exigible to tax. Notices
(supra) have not been served to the assesssee but to his erstwhile
counsel with whom the relationship got soured. This Tribunal
desires the meritorious disposal of both the “Impugned
Assessment Order” as well as the “Impugned Order”.
With regards to delay before the Ld. CIT(A), we hold that
sufficient reasons were given before Ld. CIT(A) & Ld. CIT(A)
should have considered the same judiciously keeping in mind
that the delay was explained with plausible & sufficient justification with an affidavit in support. We additionally observe & hold that basis the application for the “Condonation
of Delay” along with “An Affidavit in support” before the Ld.
CIT(A) which we have reproduced above (supra), we observe that
it was contended by the assessee that he is not well educated &
had no knowledge about his case that it was selected for
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reassessment u/s 147 of the Act & that the reassessment
proceedings are now conducted in faceless manner. E-mail
address was of shyamsundermantri@yahoo.in which did not
belong to the assessee. It is stated on the “Affidavit” that
compliance could not be done due to wrong e-mail on the portal
and so also representation. Later upon engaging Tax consultant,
he was advised to file the first appeal & he learnt about non
compliance made by him in the past. These reasons according to
us are reasonable and fair as it is supported by the Affidavit too.
In hearing the Ld. AR has fairly stated that e-maid Id address
was of the assessee’s erstwhile counsel with whom relationship
got soured. In the circumstances we deem it fit to condone the
delay as the total income is required to be computed and
assessed basis merits too. The assessee’s say is of importance in
computing total assessable income exigible to tax. Under these
facts & circumstances, we set aside the “Impugned Order” &
remand the case back to the file of Ld. AO on de novo basis. We
direct the assessee to furnish reply, submissions on merits of the
case & to provide all the material details as sought by the Ld. AO
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in time. We direct the assessee not to seek any adjournment on
any flimsy grounds.
4.4 In view of the premises drawn by us, we set aside the “Impugned
order” and remand the case back to the file of the Ld. AO on denovo
basis, who shall now pass a speaking & well reasoned order on
merits.
5 Order
5.1 In the result, the impugned order is set aside as & by way of
remand back to the file of the Ld. AO with directions as aforsaid.
5.2. In result, appeal of Assessee is allowed for statistical purpose.
Pronounced in open court on 19.02.2026.
Sd/- Sd/-
(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER
Indore Dated : 19 /02 /2026 SN Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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