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Facts
The assessee's appeal was against an order confirming an exparte assessment order passed under section 144B of the Income Tax Act. The assessee had filed a return of income under section 44AD of the Act and had made cash deposits in their bank account. There was a delay in filing the appeal before the Tribunal.
Held
The Tribunal condoned the delay in filing the appeal, finding the reasons to be bonafide. It was held that the assessee had correctly filed the return under section 44AD as books of account were not maintained. The department failed to establish that the bank deposits were unexplained income.
Key Issues
Whether the CIT(A) was justified in confirming an exparte assessment order without appreciating the merits and considering the returned income filed under section 44AD, and whether the delay in filing the appeal before the Tribunal should be condoned.
Sections Cited
144B, 44AD, 69A
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Income Tax Appellate Tribunal, JODHPUR BENCH (Virtual
Before: SHRI RAJPAL YADAV, HONBLE & DR. MITHA LAL MEENA, HONBLE
This Appeal by the assessee is directed against the order of National Faceless Appeal Central, Delhi (hereinafter referred to as "NFAC/CIT(A)"] dated 08.09.2023 in respect of assessment year 2017-18 where the appellant has challenged the decision of the Id. CIT(A) in confirming assessment order passed exparte qua the assessee u/s 144B of the Act without appreciating merits and considering returned income of the Assessee filed u/s 44AD of the Act.
At the outset, the Ld. Counsel for the assessee submitted that there was a delay in filing the appeal, due to bonafide reasons which were duly supported with an affidavit of the assessee authenticating the content of the reasons for the delay in filing appeal before the Tribunal. The Ld. AR further submitted that the Ld. CIT Appeal/NFAC has dismissed the appeal without going into merits of the case while confirming the finding of the AO in an exparte assessment order. He pleaded that the delay in filing appeal may be condoned, and appeal may be admitted on merits. The Ld. DR could not controvert the content of the affidavit and accordingly had no objection to the request of the Assessee. Considering bonafide reasons for the delay, the delay in filing the appeal is condoned and appeal is admitted on merits.
Having considered the submission of both the sides and perusal of record, we find that admittedly, the assessee has filed return u/s section 44AD of the Act as he did not maintain the books of the account. The Ld. CIT (A) has summarily rejected the appeal for non-prosecution in confirming the assessment order passed exparte u/s 144B of the Act.
From the record, it is evident that the assesse has made cash deposit in its bank account which has been shown Rs. 8,12,160/- as income in its return of income filed u/s 44AD of the Act for the assessment Year under consideration. Since the appellant has not maintained the books of account, and hence he has been legally correct in filing return of Income u/s 44AD of the Act which has not been controverted by either the AO or the CIT (A) or the Ld. DR before us to establish that the source of said disputed bank deposit was ever unexplained by the assessee. Meaning thereby that in the present case, department failed to establish that how the bank deposit would construed income of the assessee.
Thus, the disputed cash deposit in the bank account of the assessee of Rs. 8,12,160/- stand explained and accordingly, the addition double of Rs. 8,39,628/- u/s 69A and Rs. 8,12,160/- treating Returned Income as business income is hereby deleted.
In the result, appeal of the assessee is allowed. Order pronounced on.. 27.05.2025 in the open Court. (RAJPAL YADAV) VICE PRESIDENT (DR. MITHA LAL MEENA) ACCOUNTANT MEMBER Dated: 27/05/2025 Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By Oder