AMIT KUMAR YADAV,SEONI vs. INCOME TAX OFFICER, SEONI

3. That the learned CIT Appeal as well as Assessing Officer has erred in law and on facts of the case in making / confirming Penalty of Rs.2712181/-.. The cash deposits sought to be taxed is not income of the assessee. The penalty should be deleted.

those may arise at the time of hearing of this appeal.” , 167 & 168 /JAB/2024 A.Y. 2018-19 Amit Kumar Yadav “1. That 1. That the learned CIT Appeal has erred in law and on facts of the case in refusing to Condone the delay in filing the appeal. The appellant has explained the delay to be beyond his controlled should be condoned. The appeal should have been admitted for consideration on merits.

2. That the learned CIT (A) has erred in law and on facts of the case in not appreciating the merits of the case before deciding condonation application. The assessee has a very strong case on merits the justice should not be denied to the assessee based on delay as held by Supreme Court in the case of Collector (LA) VS Katiji (1987) SCC 107. The guide lines are laid down by the apex court should have been followed. The delay should be condoned and appeal may please be considered on merits.

3. That the learned CIT Appeal as well as Assessing Officer has erred in law and on facts of the case in making / confirming Penalty of Rs.50000/-. The appellant was prevented by reasonable cause in not making compliance of notice u/s 143(2) and u/s 142(1). The penalty of Rs. 50000/- should be quashed in toto.

4. That The applicant reserves his right to raise additional ground or grounds of appeal

those may arise at the time of hearing of this appeal.”

2. The facts of the case are, that the return of income of the assessee for the assessment year 2018-19 was filed on a total income of Rs.2,28,500/-. Subsequently, the Department received information, that the assessee had deposited a sum of Rs. 3,51,09,143/- in his bank account with the Central Bank of India and the case was selected for scrutiny on account of these high value cash deposited reported in SFT (‘business cases’). Accordingly, notices under section 143(2) and 142(1) were issued to the assessee, but the assessee did not submit any reply to these notices. The ld. AO, thereafter, issued a show cause notice dated 24.01.2021, but the assessee did not respond to the same. Therefore, the ld. AO concluded that the assessee had nothing to say in this regard and he added back the amount to the income of the assessee as unexplained cash credit under section 68 of the Income Tax Act and brought the same to the tax, as per the provisions of section 115BBE. He also initiated penalty proceedings under section 271AAC(1) and 272A(1)(d) of the Act. Thereafter, the ld. AO issued penalty notices under section 274 r.w.s 271 AAC(1) asking the assessee why an order imposing a penalty should not be made under the said section in view of the , 167 & 168 /JAB/2024 A.Y. 2018-19 Amit Kumar Yadav fact that a sum of Rs.2,71,21,811/- had been determined as the tax under section 115BBE along with surcharge and cess on the same. In the absence of any reply from the assessee, a penalty of Rs.27,12,181/-, being 10% of this amount was levied upon the assessee under section 271 AAC(1).

4. Aggrieved with the said assessment and penalty orders, the assessee filed an appeal before the ld. CIT(A), NFAC. The ld. CIT(A), NFAC observed that there was a huge delay in filing of the appeals by the assessee and the appeal against the order under section 144 had been filed after a delay of 670 days. Similarly, he noticed that the appeal against the order under section 272A(1)(d) had been filed after a delay of 780 days and the appeal against the order under section 271AAC(1) had been filed after a delay of 765 days. Therefore, the ld. CIT(A) held that before the appeals could be admitted, it had to first be adjudicated as to whether such delay could be condoned and the assessee had to submit sufficient causes for the delay. With regard to the delay in filing the appeal against the order under section 144, the assessee submitted that the assessee neither had intimation of the notice of hearing, nor of the passing of the ex parte order. The email and mobile number entered on the portal was of a third person i.e. the consultant Sh. Irfan Khan S/o Sh. Jameen Khan bearing Aadhar No.455419147034. It was submitted that the consultant whose email and mobile number was entered on the portal, did not inform the assessee regarding the hearing notices or about the passing of the ex parte order. Therefore, the assessee was 167 & 168 /JAB/2024 A.Y. 2018-19 Amit Kumar Yadav completely unaware of the notices or of the order as the order had been passed behind the back of the assessee and moreover, the order had been passed during the Covid lockdown period. It was submitted that the consultant informed the assessee only in the month of February, 2023. Furthermore, the said consultant Sh. Irfan Khan had sworn an affidavit to this effect which was attached with the condonation petition. The assessee placed reliance on the judgment of the jurisdictional Madhya Pradesh High Court in the case of CIT, M.P. vs. Khemraj (1978) 114 ITR 75 M.P, the ITAT Amritsar Bench in the case of Bhagwati Colonizer Pvt. Ltd., vs. ITO in dated 22.10.2019 and the judgment of the Hon’ble Bombay High Court in the case of Vijay Vishin Meghani vs. DCIT (2017) 398 ITR 250 (Bom). It was submitted that in view of the given facts and circumstances of the case, the delay was worthy of being condoned. The ld. CIT(A) considered the submissions made by the assessee and observed that it was the duty of the assessee to mention his own details on the ITBA. He held that if the assessee chose to mention the details of any other person, any notice or order served on that other person, in the eyes of law, was a notice or order served upon the assessee. The ld. CIT(A) held that ignorance of law for legal procedures cannot be an excuse. He noted that the appeal against the assessment order had been filed by the assessee more than a year after the end of the covid pandemic and the appeal against the penalty orders more than two years after the end of the covid pandemic. The ld. (A) noted that while the appeal against the order under section 144 had been filed by the assessee on 28.03.2023, it was filed against the penalty orders on 29.03.2024 i.e. one year after he became aware of the order under section 144 having being passed in his case because of non-compliance. Therefore, the ld. CIT(A) held that the assessee had been extremely casual in his approach towards income tax proceedings and for this reason no leeway could be extended to the assessee. The ld. CIT(A) also considered the affidavit filed by Sh. Irfan Khan and held that affidavit filed Suo Moto was not evidence under the Indian Evidence Act and for this proposition, he placed reliance on the judgments of the Hon’ble Supreme Court in the case of Sudha 5 , 167 & 168 /JAB/2024 A.Y. 2018-19 Amit Kumar Yadav Devi vs. M.P. Narayanan (1988) 3 SCC 366 and the judgment of the Hon’ble Madras High Court in the case of Sree Ramavilas Spinning And vs M/S.Virudhunagar Textiles (2011) (1) MWN (Civil) 781. Therefore, the ld. CIT(A) refused to consider the affidavit of Sh. Irfan Khan and condone the delay in the filing of appeals. The ld. CIT(A) also considered various judgments of the Courts on the issue of, ‘sufficient cause’ and held that the power of condonation of delay had been granted to an appellate authority in order to effect substantial justice, by giving a liberal construction to the expression, ‘sufficient cause’ in section 5 of the Limitation Act. However, he held that such a liberal construction must fall within the concept of reasonable time and proper conduct of the assessee concerned and should be made keeping in view that section 5 does not bestow unlimited and unbridled discretionary powers and does not cover cases of dilatory tactics, want of bonafide, deliberate inaction or negligence on the part of the assessee. The onus is, therefore, on the assessee who seeks condonation of delay to provide a reasonable explanation for the delay and in the absence of such reasonable cause, the condonation of delay could not be granted to the assessee. Therefore, the ld. CIT(A) dismissed the appeals against the assessment orders and the two penalty orders.

5. The assessee is aggrieved at this summary dismissal of his appeal by the ld. CIT(A). Sh. G.N. Purohit, Senior Advocate (hereinafter referred to as the ld. AR) arguing on behalf of the assessee. submitted that the circumstances behind the delay in the filing of the appeal before the ld. CIT(A) had been duly explained by the assessee before him and the fact that the assessee was not making up a story had been established by the fact that Sh. Irfan Khan had filed an affidavit supporting the version of the assessee. However, the ld. CIT(A) had chosen to disregard the affidavit of Sh. Irfan Khan on the basis of certain court judgments, without bothering to cross examine him to bring his evidence on record. It was further submitted that it had been quite clearly brought out before the ld. CIT(A) that both the assessment order and the penalty orders had been , 167 & 168 /JAB/2024 A.Y. 2018-19 Amit Kumar Yadav passed behind the back of the assessee and when the assessee came to know about them, he took measures to file the appeal. Ld. Sr. Counsel also pointed out that much had been made about the fact that there was a delay in the filing of the penalty orders, but pointed out that this was because the assessee was under the impression that the assessment order was the foundation of the matter and once the assessment order was not sustained, the penalty under section 271 AAC(1) would automatically stand vacated and if the explanation for the assessee regarding the delay in filing the appeal was condoned, then the penalty order under section 272A(1)(d) would not remain sustainable. He admitted that the assessee should have simultaneously filed these appeals, but held that in the circumstances, the penalties were not sustainable and therefore, pleaded that the same should have been held in abeyance pending the decision on the assessment order.