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Facts
The assessee, an egg trader, deposited Rs. 29,88,210/- in his bank account during the demonetization period. Due to non-compliance with notices, the AO completed an ex-parte assessment under Section 144, adding Rs. 29,98,710/- as unexplained money under Section 69A. The CIT(A) upheld an addition of Rs. 23,34,200/-.
Held
The Tribunal condoned the 290-day delay in filing the appeal, attributing it to notices being sent to an ex-employee's email. It imposed a cost of Rs. 11,000/- on the assessee and remanded the case back to the AO for a fresh assessment after giving due opportunity, subject to the deposit of the cost.
Key Issues
Condonation of 290-day delay in filing appeal; sustainability of addition under Section 69A for cash deposits during demonetization; applicability of appropriate tax rates on such additions.
Sections Cited
Income-tax Act, 1961, Section 250, Section 144, Section 69A, Taxation Laws (Second Amendment) Act, 2016
AI-generated summary — verify with the full judgment below
Before: SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL & SMT. RENU JAUHRI
Appellant by : Shri Devendra Jain Respondent by : Shri Nagnath Pasale Date of Hearing 30.05.2024 Date of Pronouncement 24.06.2024 आदेश / O R D E R PER RENU JAUHRI [A.M.] :-
This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai-33/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 5.12.2022 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2017-18.
The assessee raised following grounds of appeal: a. In the facts and circumstances of the case and in law, the learned National Faceless Appeal Centre (NFAC), CIT (Appeals), Mumbai has erred in passing an ex-parte order thereby grossly violating the principles of Natural Justice. b. In the facts and circumstances of the case and in law, the learned National Faceless Appeal Centre (NFAC), CIT (Appeals) has erred in sustaining addition made by the Ld. Assessing Officer Rs. 23,34,200/- as unexplained money u/s 69A of the Act. c. In the facts and circumstances of the case and in law, the learned National Faceless Appeal Centre (NFAC), CIT (Appeals) erred in upholding levy of tax at 60% on cash deposited in bank Rs. 23,34,200/- prior to 16th December 2016 i.e. prior to the date on which the Taxation Laws (Second Amendment) Act, 2016 received the assent of the President, instead of the then applicable rate of 30%.
Brief facts of the case the assessee is a proprietor having business of trading of eggs. He filed his return of income for AY 2017-18 on 06.10.2017 declaring total income of Rs. 6,64,510/-. The case was selected for scrutiny, as the assessee had deposited Rs. 29,88,210/- in his bank account during the demonetization period. Since no response was received from the assessee to the notices issued by the AO, the assessment was made u/s 144 vide order dated 19.12.2019 at a total income of Rs. 36,63,220/-, after adding Rs. 29,98,710/- u/s 69A of the Act as unexplained income.
Aggrieved with the assessment order, an appeal was filed before CIT(A)/NFAC on 16.03.2020. The Ld. CIT(A) issued 3 notices to the assessee on different dates, however, no compliance was made by the assessee. The CIT(A), therefore, upheld the addition of Rs. 29,98,710/- but gave benefit of returned income of Rs. 6,64,510/-. Thus, the addition to the extent of 23,34,200/- was sustained.
The appeal before ITAT has been filed on 05.12.2023 i.e. after delay of 290 days. It has been submitted through an affidavit that the order u/s 250 passed by the CIT(A) was not in the knowledge of the assessee as all the notices/orders were sent on email id of an ex-employee of his earlier tax consultant. Since, the said employee had left the job with the consultant, no one informed the assessee about these notices/orders. It was only in the month of November, 2023 when the new consultant appointed by the assessee checked the status on e-filing portal, that the appellate order came to his knowledge. In view of these circumstances, request for condonation of delay of 290 days has been made. 6. We have considered the rival submissions. In view of the facts submitted by the assessee, the delay in filing of appeal is condoned. At the same time, it is noticed that at no stage during the assessment or appellate proceedings, any compliance has been made by the assessee. As such we deem it proper to impose cost of Rs. 11,000/- on the assessee. Subject to the deposit of cost, the case is remanded back to the file of AO for making a fresh assessment after giving due opportunity to the assessee. The assessee is also directed to make necessary compliance before AO. 7. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 24.06.2024.