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Facts
The assessee, a salaried employee, failed to file an income tax return for AY 2012-13. The Assessing Officer (AO) initiated assessment proceedings under Section 147 and made a best judgment assessment, including an addition of Rs. 1,26,037/- for unexplained bank deposits. The assessee's subsequent appeals and rectification applications to the CIT(A) were consistently dismissed, primarily on grounds of being time-barred.
Held
The Tribunal held that the addition of Rs. 1,26,037/- under Section 69A was a matter that required evidence and explanation, which is beyond the scope of rectification under Section 154. The assessee's consistent failure to file appeals within the limitation period and the lack of a mistake apparent from the record rendered the rectification applications and the present appeal unsustainable.
Key Issues
Whether the addition of unexplained bank deposits could be rectified under Section 154, and the maintainability of the assessee's appeals and rectification applications filed beyond the limitation period.
Sections Cited
147, 148, 144, 154, 250, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI B.M. BIYANI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by rectification-order dated 05.06.2025 [“impugned order”] passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] u/s 154 r.w.s. 250 of Income-tax Act, 1961 for Assessment- Year [“AY”] 2012-13, the assessee has filed this appeal.
The background facts leading to present appeal are as under:
(i) The assessee-individual was a salaried employee of M/s Lemon Tree Hotels Pvt. Ltd., Delhi. For AY 2012-13 under consideration, the Page 1 of 8 AY 2012-13 assessee did not file any return of income despite having taxable income highly exceeding the exemption limit. Therefore, the AO issued notice dated 26.03.2019 u/s 148 initiating the proceeding of assessment u/s 147 and called assessee to file return. But the assessee did not make any compliance. Thereafter, the AO issued multiple reminder-letters as well as notices u/s 142(1) to assessee but the same also remained uncompiled with. Ultimately, the AO resorted to best judgement assessment u/s 144 and finalized assessment vide assessment-order dated 25.11.2019 taking into account the information available with department as well as the information directly collected from Axis Bank u/s 133(6). The AO assessed total income at Rs. 12,27,885/- consisting of two components, namely (i) salary income of Rs. 11,01,848/- and (ii) unexplained deposits in bank a/c of Rs. 1,26,037/- u/s 69A. Further, the AO did not allow credit of TDS deducted by employer out of salary income.
(ii) Subsequently, the assessee filed a rectification-application u/s 154 to AO against assessment-order. The AO disposed of assessee’s application vide rectification-order dated 01.09.2021 giving credit of TDS out of salary income. However, in the rectification-order so passed, the AO did not make any discussion/rectification qua the addition of Rs. 1,26,037/- u/s 69A.
Page 2 of 8 AY 2012-13 (iii) Further on 23.09.2021, the assessee filed appeal to CIT(A). During first-appellate proceeding, the CIT(A) considered assessee’s appeal as having been filed belatedly against assessment-order dated
25.11.2019. The assessee filed an application for condonation of delay to CIT(A) accepting that the time-limit to file appeal was 24.12.2019 but he was unable to file appeal within time as his earlier tax consultant did not inform about such time-limitation and subsequently there was Covid-19 pandemic. The application filed by assessee is re-produced by CIT(A) in his order. The CIT(A) considered assessee’ application but ultimately dismissed first-appeal by passing following order dated 23.03.2023:
“3. Decision: It is seen that the applicant is a well-qualified person holding responsible position in a premier hospitality company, namely M/s Lemon Tree Hotels Pvt. Ltd. The assessment order u/s. 144/147 was passed on 25.11.2019 and served upon the appellant on the same date electronically. Thus, limitation date for filing of appeal was 24.12.2019. The appellant submits that he was not able to file appeal within time as his tax consultant did not inform him about time limitation in filing of appeal and then the covid pandemic started. Filing of appeal in time is incumbent upon tax payer and not upon his / her tax consultant. Therefore, non-information to appellant from his tax consultant cannot be a legally valid alibi. As far as break out of covid pandemic is concerned, the same started in end March, 2020. The appellant thus had plenty of time to file appeal. In the facts and circumstances of the case, the bonafide of the appellant in non-filing of appeal in time is not proved. The condonation of appeal as prayed for is rejected. As a consequence, appellant's appeal is dismissed.
4. In sum, appellant's appeal is dismissed.”
Page 3 of 8 AY 2012-13 (iv) Thereafter on 17.10.2023, the assessee filed an application u/s 154 to CIT(A) for rectification of aforesaid order dated 23.03.2023 but the assessee did not attach the copy of order dated 23.03.2023 against which rectification was sought and the assessee also remained non- compliant in response to the hearing notice issued by CIT(A), therefore the CIT(A) passed order dated 30.03.2024 u/s 154 r.w.s. 250 and dismissed assessee’ rectification-application.
(v) Yet again on 01.04.2024, the assessee filed second application u/s 154 to CIT(A) for rectification of very same order dated 23.03.2023 passed by CIT(A). The CIT(A), however, again dismissed assessee’s application by passing order dated 05.06.2025 u/s 154 r.w.s. 250 reading as under:
“3. Facts of the case - Before proceeding any further in this matter, brief facts of the case are being discussed as under. In this case, assessment order u/s 147 r.w.s 144 of the Act was passed on 25/11/2019 at total assessed income of Rs. 12,27,885/- while raising demand of Rs. 6,33,310/-. Subsequently, appellant had filed a rectification request against this order dated 25/11/2019 as TDS credit of Rs. 1,44,565/- was not allowed though reflecting in Form 26AS of A.Y. 2012-13. Thereafter, the AO had passed rectification order dated 01/09/2021 while giving credit of TDS as reflected in 26AS. However, no specific discussion was made on the additions made in the base order dated 25/11/2019 i.e. no relief was granted by the AO on the addition made as matter not a mistake apparent from records. Later on, appellant had filed an appeal before the CIT(A) on 25/09/2021 against rectification order dated 01/09/2021. In the said appeal, addition made by the AO of Rs. 1,26,037/- was challenged which were originally made in the base order dated 25/11/2019. Thereafter, CIT(A) vide its order u/s 250 of the Act with DIN no. ITBA/NFAC/S/250/2022-23/1051183233(1)
Page 4 of 8 Vaibhav Mittal AY 2012-13 dated 23/03/2023 had dismissed the appeal of the appellant while rejecting condonation of delay application of the appellant while proclaiming that limitation date for filing of appeal was 24/12/2019. Subsequently, appellant had made rectification application on 17/10/2023 against CIT(A) order dated 23/03/2023. CIT(A) vide order по. ITBA/NFAC/F/154/2023-24/1063690921(1) dated 17/10/2023 rejected the application as no copy of order to be rectified was provided. Appellant also remained non-compliant to the notice and has not provided the said documents before passing of the order dated 30/03/2024. Now, appellant has again filed the rectification application on 01/04/2024 against order u/s 154 r.w.s 250 dated 30/03/2024. Now, the appellant has requested to consider the case on merits and decide the appeal against the additions made in the order dated 25/11/2019. Here, it has been observed that CIT(A) has already discussed the matter in its order dated 23/03/2023 and has rejected the original appeal of the appellant as filed after passing of the limitation date.
4. Decision- In view of facts discussed above, it is apparent that the reason for rectification is not a valid reason and there is no apparent mistake found in the orders passed by the CIT(A) u/s 250 dated 23/03/2023 and order u/s 154 r.w.s 250 dated 30/03/2024. Thus, the rectification application filed by the appellant is rejected.” [emphasis supplied] (vi) Now, the assessee has filed present appeal against the latest order
dated 05.06.2025 passed by CIT(A).
Precisely, the assessee’s solitary grievance in this appeal is the addition of Rs. 1,26,037/- made by AO u/s 69A on account of unexplained deposits/credits in bank a/c.
We have heard learned Representatives of both sides and carefully perused the case file including the documents filed in Paper-Book and written-submission made by Ld. AR for assessee.
Page 5 of 8 AY 2012-13 5. Thus, at first we find that assessee initially filed appeal on 23.09.2021 to CIT(A) against AO’s order and the CIT(A) dismissed assessee’s appeal vide order dated 23.03.2023 on the footing of time-barred appeal. In coming to his conclusion, the CIT(A) judiciously considered assessee’s application for condonation of delay. However, during hearing before us, Ld. AR submitted that the assessee actually filed appeal to CIT(A) against rectification-order dated 01.09.2021 passed by AO but the CIT(A) mistakenly understood the assessee’s appeal having been filed against assessment-order dated 25.11.2019 passed by AO and accordingly generated a mis-understanding of time-barred appeal. Even if this pleading of Ld. AR/assessee is accepted, then also we find that there was no apparent mistake in the assessment- order dated 25.11.2019 passed by AO in so far as the addition of Rs.
1,26,037/- u/s 69A is concerned, therefore also the assessee was wrong to invoke rectification jurisdiction of AO u/s 154. We find that the scope and ambit of section 154 is very limited and circumscribed only to ‘rectification of any mistake apparent from the record’ and does not encompass review of order or any investigation, verification and evaluation of facts and record. The Hon'ble Supreme Court in case of T.S. Balaram, Income-tax officer Vs. Volkart Bros. 82 ITR 50 (SC) has considered the scope of rectification u/s 154 as under:
"From what has been said above, it is clear that the question whether S. 17(1) of the Indian Income-tax Act, 1922 was applicable to the case of the first respondent is not free from doubt. Therefore, the Income-tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income-tax Officer to go into the true scope of the relevant
Page 6 of 8 AY 2012-13 provisions of the Act in a proceeding under S. 154 of the Income-tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not, something which can be established by a long-drawn process of reasoning on points on which there may conceivably be two opinions.” In present case, the AO passed assessment-order dated 25.11.2019 u/s 144 because of non-compliances made by assessee to various notices issued by AO and made impugned addition u/s 69A on the basis of deposit/credit entries found in bank a/c which remained unexplained by assessee at assessment stage. The AO’s action is very much justified on the basis of material available at the time of making assessment. To assail AO’s action, the assessee is required to explain the source of the deposits/credits by producing clinching evidences, which is clearly beyond the scope of rectification proceedings u/s 154. The Ld. AR for assessee has failed to demonstrate as to how the impugned addition constitutes a mistake apparent from record capable of rectification u/s 154? Even if the assessee was aggrieved by the addition made by AO u/s 69A in assessment-order, the proper legal course would have been to file an appeal against assessment- order to AO which the assessee has not done (as narrated/contended by Ld.
AR). In the circumstance, we do not find anything error or perversity in the rectification-order dated 01.09.2021 u/s 154 passed by AO not giving benefit of rectification to assessee qua the addition of Rs. 1,26,037/- u/s 69A. Consequently, the assessee’s present appeal does not have any merit and dismissed.
Order pronounced by putting up on notice board as per Rule 34 of ITAT Rules, 1963 on 21/01/2026