AKHILESH PARMAR,INDORE vs. INCOME TAX OFFICER, INDORE

ITA 636/IND/2025Status: DisposedITAT Indore19 February 2026AY 2017-186 pages

AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal, finding sufficient cause based on the assessee's affidavit and the principle of substantial justice over technical considerations, citing the Hon'ble Supreme Court's decision in Collector, Land Acquisition Vs Mst. Katiji and others. Regarding the substantive issue, the Tribunal, in view of the principle of natural justice and the agreement of both parties, remanded the matter back to the file of the AO for adjudication afresh. The AO was directed to provide the assessee with an opportunity of hearing and pass an appropriate order uninfluenced by the earlier order. The assessee was also directed to be vigilant and ensure participation in hearings without seeking unnecessary adjournments. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Akhilesh Parmar, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Indore Bench, against the order dated 01.10.2024 passed by the CIT(A)-2, Noida, which upheld the assessment order dated 07.11.2019 passed by the ITO-3(2), Indore, under Section 143(3) of the Income-tax Act, 1961, for Assessment Year 2017-18. The appeal was filed after a delay. The assessee submitted an affidavit explaining the delay, citing agricultural income, cash received on the death of his father, and re-deposit of previous cash withdrawals as sources for cash deposits made during the demonetization period. The AO had made an addition of Rs. 10,00,000/- after allowing credit for Rs. 2,50,000/- from agricultural income, disallowing other sources due to lack of documentary evidence.

What were the issues?

1. Whether the delay in filing the appeal can be condoned under Section 253(5) of the Income-tax Act, 1961, on the grounds of sufficient cause. Assessee's contention: The assessee argued that there was sufficient cause for the delay, as detailed in their affidavit. They highlighted that the impugned order of the CIT(A) was ex-parte and the AO had upheld additions for lack of documentary evidence. The assessee explained the sources of cash deposits (agricultural income, cash on father's death, previous withdrawals) and stated readiness to provide evidence. They requested a remand to the AO for fresh consideration. Revenue's contention: The Revenue's Senior Departmental Representative did not object to the condonation of delay and left the decision to the Tribunal's wisdom. They agreed to the assessee's submission for remand, requesting the assessee to represent their case effectively before the AO without seeking unnecessary adjournments.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 253(5)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI

For Appellant: Shri Atik Bansal, AR

For Respondent: Shri Ashish Porwal, Sr. DR

Hearing: 10.02.2026Pronounced: 19.02.2026

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first-appeal dated 01.10.2024 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-2, Noida [“CIT(A)”] which in turn arises out of assessment-order dated 07.11.2019 passed by learned ITO-3(2), Indore [“AO”] u/s 143(3) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2017-18, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36).

The registry has informed that the present appeal is filed after a delay and therefore time-barred. The assessee has filed an application/affidavit for condonation of delay; the same is scanned and re-produced for an immediate reference:

The averments made by assessee in above affidavit, which are self- explanatory and which do not require repetition, were discussed and the Ld. DR for revenue does not have any objection if the bench condones delay and accordingly left it to the wisdom of bench. We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a “sufficient cause” for delay in filing present appeal. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a “sufficient cause” for not presenting appeal within prescribed time.

It is also a settled position by Hon’ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the facts of case, the provision of section 253(5) and the decision of Hon’ble Supreme Court, we take a judicious view, condone delay, admit appeal and proceed with hearing.

Ld. AR for assessee at first submitted that the impugned order of CIT(A) is a type of ex-parte order wherein the addition made by AO has been upheld for lack of documentary evidences. Ld. AR thereafter carried us to the assessment-order wherein the AO has mentioned about scrutiny of cash deposit of Rs. 12,00,000/- & Rs. 50,000/- made by assessee on 22.11.2016 & 25.11.2016 (during demonetization period), aggregating to Rs.

Page 3 of 6 AY 2017-18 12,50,000/-, made in assessee’s bank a/c. Ld. AR narrated that the assessee explained three sources of impugned deposits to the AO, namely (i) the agricultural income earned by assessee, (ii) the cash received by assessee on death of father on 20.09.2016, and (iii) the re-deposit of previous cash withdrawals made by assessee from his bank a/cs. However, the AO has given estimated credit of Rs. 2,50,000/- only from first source i.e. the agricultural income and made addition of Rs. 10,00,000/-. The AO has not given any credit of the second source for lack of documentary evidence but the assessee is ready to file the require evidence/explanation to the AO.

Further, in so far as the third source is concerned, the AO has made a table of cash withdrawals on Page No. 2 of assessment-order but the said table itself is incomplete and gives a few entries of cash withdrawals made by assessee from bank a/cs whereas the assessee made substantial withdrawals from different bank a/cs. Apart from that, the AO has made an omnibus conclusion that the withdrawals made in the financial year 2015- 16 cannot be treated as source of the deposits made in demonetization period but this conclusion is not correct in the facts of assessee and the same is also contrary to the judicial decisions where it has been vehemently accepted that the previous withdrawals re-deposited by assessee in bank a/c have to be accepted. Ld. AR submitted that the assessee will once again make an effective representation before AO to satisfy the AO. Therefore, in this situation, the present matter must be remanded back to the file of AO for a fresh consideration.

Ld. DR for revenue agreed to the submission of Ld. AR but made a request to direct the assessee to represent his case before AO and do not seek unnecessary adjournments.

In view of above, having regard to the principle of natural justice and also bearing in mind that no prejudice would be caused to revenue if the present matter is restored at the level of AO, we remand this matter back to the file of AO for adjudication afresh. The AO shall give necessary opportunity of hearing to assessee and pass an appropriate order uninfluenced by his earlier order. The assessee is also directed to remain vigilant and ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law. Ordered accordingly.

Resultantly, this appeal is allowed for statistical purpose.

Order pronounced in open court on 19/02/2026

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