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Facts
The assessee filed its return of income which was processed under section 143(1) and later selected for scrutiny. A notice under section 143(2) was issued, but the assessee did not respond to subsequent notices. The Assessing Officer (AO) made an addition of Rs. 865,441 under section 69A for cash deposits in credit cards and assessed the total income. The assessee appealed against the assessment order, but the appeal was filed beyond the statutory time limit.
Held
The Tribunal noted that the appeal was filed beyond the time limit, and the assessee's claim for condonation of delay due to the Covid-19 pandemic was not accepted by the CIT(A). However, considering the facts and the inability of the assessee to demonstrate non-service of the assessment order, the Tribunal restored the issue to the file of the AO for fresh adjudication.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned, and if the issue of cash deposits needs to be adjudicated afresh by the Assessing Officer.
Sections Cited
143(1), 143(2), 142(1), 69A, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “SMC” Bench, Mumbai.
Before: Shri Prashant Maharishi (AM)
O R D E R
This appeal is filed by the assessee for assessment year 2017 – 18 against the appellate order passed by the additional Commissioner/joint Commissioner (appeals) – 1, Jaipur (the learned CIT – A) dated 7/12/2023 wherein the appeal filed by the assessee against the assessment order passed under section 143 (3) of the income tax act, 1961 (the act) dated 22/12/2019 passed by the income tax officer Ward 27 (2) (4), Mumbai (the learned AO was dismissed. Therefore, the assessee is in appeal before us.
The brief fact of the case shows that the assessee filed its return of income declaring total income of Rs. 3 and 42,740/– and 19/7/2017. This return of income was processed under section 143 (1) of the act. Subsequently return of income was selected for scrutiny to verify the credit card payments. Therefore, the notice under section 143 (2) was issued on 16/8/2018. Further notices were issued under section 142 (1) of the act however there is no response. The learned AO noted that assessee has made a payment of Rs. 865,441 in cash to the three credit cards of the assessee. As the assessee did not make any submission, the addition was made under section 69A of the act of Rs. 865,441 and total income of the assessee was assessed at Rs. 1,208,180 by the assessment order passed under section 143 (3) of the act. 3. Aggrieved assessee preferred an appeal before the learned CIT – A. The learned CIT – A noted that the order under section 143 (3) was passed on 22/12/2019, which is why the appeal was filed on 25/10/2021 which is beyond the statutory time limit provided for filing of the appeal. The assessee has filed the appeal beyond the time limit of one year and nine months. The assessee explained the delay stating that delay of 641 days has occurred due to the Covid 19 pandemic. The assessee is a salaried employee, not complying with the notices could not have made any benefit to the assessee and therefore the delay should have been condoned. The learned CIT – A did not condone the delay and dismissed the appeal of the assessee without deciding the issue on the merits of the case. 4. Assessee, aggrieved with the appellate order is in appeal before us. It was stated that the assessment order was passed on 22/12/2019. Therefore, the appeal should have been filed within 30 days. Such 30 days expired on 21/1/2020. The assessee could not look into the matter. Soon thereafter in the month of March Covid 19 took place. Therefore, part of the delay is on account of nonreceipt of the order available with the assessee and part of the delay is on account of Covid. 5. The learned departmental representative vehemently supported the order of the learned CIT – A and submitted that the timeline for filing of the appeal in case of the assessee before the learned CIT – A expired prior to the onset of Covid 19 and therefore the claim of the assessee that because of Covid 19 assessee could not filed appeal before the learned CIT – A is false. No fault can be found with the learned CIT – A in not condoning the delay.
We have carefully considered the rival contention and perused the order of the learned lower authorities. Before the assessing officer the assessee did not respond to the amount of cash deposited with respect to the credit card before the learned CIT – A appeal was filed late and therefore delay was not condoned. Thus, in fact, assessee is not hard at all by any of the lower authorities. On looking at the order of the learned assessing officer nine hearings were fixed. None of them are available. Before the learned CIT – A the appeal was filed late. It is the claim of the assessee that assessment order was received late and therefore assessee could not file the appeal in time. It was stated that in form number 35, the assessee mentioned the date of order and the date of receipt of the order same, but it is not correct. Looking to the nature of the issue involved, and inability of the assessee to demonstrate before the learned CIT – A that the order of the assessment was not served earlier. No one should be condemned without hearing. Therefore, in the interest of justice we restore the whole issue back to the file of the learned assessing officer with a direction to submit the details of the cash deposited in the three credit card accounts of the assessee within 90 days of the receipt of this order. The learned AO may examine the same, provide an opportunity of hearing to the assessee if required and demanded, then decide the issue afresh.
Accordingly, the appeal of the assessee is allowed for statistical purposes.