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Facts
The assessee, an agriculturist, did not file an income tax return for AY 2019-20. A cash deposit of Rs. 11,36,000/- was found in her bank account, leading to reassessment proceedings. The assessee claimed the deposit was from accumulated agricultural income and loan repayment. However, she failed to provide sufficient evidence. The Assessing Officer treated Rs. 15,38,248/- as unexplained money. The CIT(A) dismissed the appeal ex-parte due to delay and non-compliance.
Held
The Tribunal condoned the 54-day delay in filing the appeal before the CIT(A) due to technical glitches with the income tax portal and the CIT(A)'s short notice. The Tribunal remitted the case back to the CIT(A) for fresh adjudication on merits after providing the assessee a proper opportunity of being heard.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal ex-parte without considering the delay and the explanation for the delay, and whether the addition made under Section 69A was correct?
Sections Cited
69A, 115BBE, 250, 148A, 147, 144B, 139, 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, BENGALURU “C” BENCH, BENGALURU
Smt. Kashavva S Rangaraddiyavar, The Asstt. Commissioner of Gurlakatti, Kanakikopa, Naragund, Income Tax, Circle-1(1), & vs. Gadag-582207 TPS, Navanagar, Hudli PAN –EIXPR1582R (Appellant) (Respondent) Assessee by: Ms. Sunaina Bhatia, CA Revenue by: Shri V. Parithivel, JCIT Date of hearing: 01.08.2024 Date of pronouncement: 03.09.2024 O R D E R PER: KESHAV DUBEY, J.M.
This appeal at the instance of the assessee is directed against the order of the CIT(A)/National Faceless Appeal Centre, Delhi (‘the learned CIT(A)’) dated 17.05.2024 vide DIN & order No. ITBA/NFAC/S/250/2024- 25/1064974771(1) passed under Section 250 of the Income Tax Act, 1961 (the Act) for Assessment Year (AY) 2019-20.
The assessee has raised the following grounds of appeal: -
1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
2. The learned CIT[A] is not justified in disposing off the appeal ex- parte without allowing sufficient and real opportunity to the appellant to represent the case and explain the delay in filing the appeal and hence, the impugned order passed requires to be cancelled.
The learned CIT[A] is not justified in sustaining the addition of Rs. 15,38,248/- made as unexplained money U/s 69A r.w.s. 115BBE of the Act under the facts and in the circumstances of the appellant's case.
The learned CIT[A] ought not to have upheld the rejection of the bonafide explanation tendered by the appellant for the source of the cash deposits made from out of the agricultural income of the appellant and out of the accumulated savings of agricultural income earned during the earlier financial years under the facts and in the circumstances of the appellant's case. 5. The learned CIT[A] is not justified in upholding the tax imposed under the provisions of section 115BBE under the facts and in the circumstances of the appellant's case. 6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”
The brief facts of the case are that the assessee claimed to be an agriculturist owing and cultivating on agricultural lands to the extent of 14 Acre in Naraud Taluka of Gadag District. The assessee had not filed any return of income under section 139 of the Income Tax Act for the year under consideration. As per the information received in the Insight Portal, the cash deposited in the Canara Bank amounting to Rs.11,36,000/- which suggested that income chargeable to tax had escaped assessment and accordingly, show cause notice under section 148A(b) of the Act was issued. In response to the said show cause notice, the assessee claimed to be an Agriculturist. It was also claimed that the said cash deposit of Rs. 11,36,000/- in assessee’s Canara Bank account was made out of the accumulated agricultural income from the agricultural lands owned and cultivated by the assessee and that the said deposit was made towards repayment of agricultural loan from the accumulated savings from agricultural income of the assessee. Thereafter, the order under section 148A(d) of the Act was passed by JAO concluding that Smt. Kashavva S Rangaraddiyavar while assessee had stated that the cash deposit of Rs.11,36,000/- in Canara Bank account was towards agricultural loan repayment out of the accumulated savings from agricultural income but the assessee had not submitted any evidence for the agriculture income in the form of sale bills, bills for sale of agricultural product etc., and accordingly, held that the source of the said transaction remained unexplained as the assessee had not filed any return of income for the year under consideration. Thereafter, notice under section 148 of the Act was issued to the assessee. In response to notice under section 148, the assessee filed his return of income on 28.03.2023 declaring Nil total of income & also declared net agricultural income of Rs. 7,33,959/- (gross agricultural receipts shown in the return of income Rs. 9,82,710/- expenditure shown to have incurred on agriculture Rs. 2,48,751/-). In response to notice issued under section 143(2) of the Act, the assessee also filed copy of 26AS, ITR Acknowledgment and Computation of Income as well as earlier written submission copy filed to the JAO. The assessee has also submitted details such as bank account statement both savings account as well as Kisan Credit Card Scheme account, RTC extract in Vernacular language. Further in response to notice under section 142(1) of the Act, the details were called for i.e. details of loan taken, details of cash deposit/withdrawals, detail description about the nature of various agricultural activities carried out, details of bills voucher for expenditure incurred, details of bills for sale of all agricultural produce grown, accounting of receipt of sales made during the financial year 2018-19 with documentary evidence etc,. Further, a show cause notice was also issued to the assessee on 26.10.2023 proposing to make an addition to total income of Rs. 22,38,248/-. The assessee furnished a reply to this show cause notice on 6.11.2023 and also furnished details of agricultural sale bill copy, sale deed copies of sale of immovable property, copies of agricultural expenses register, sales register etc,. Further, the assessee although sought for video conference but did not attend the V.C. The ld. AO concluded the assessment by holding Smt. Kashavva S Rangaraddiyavar that the transaction made by the assessee in the A/c No. 4636840000283 (Kisan Credit Card Scheme Account with Canara Bank was found to include cash deposit of Rs. 11,36,000/- on 1.08.2018 which matches with the information based on the assessment was reopened in the case of assessee. Also, another large value cash deposit amounting to Rs. 11,02,248/- was seen made in the said account on 13.02.2019 totalling Rs. 22,38,248/-. The AO hold that in spite of granting several opportunities, the assessee had not produced any of the details called for related to the claim of agricultural income and accordingly hold that since the assessee had not furnished any details regarding his agricultural activity, such as crops being produced, expenses incurred, details regarding harvesting / loading and unloading, transportation etc., and agricultural land under cultivation in support of his claim for agricultural income, the claim of Net agriculture income amounting to Rs.7,33,959/- was found not to be acceptable towards source of cash deposits. Further the assessee’s claimed that agriculture loan availed to the extent of Rs.10,00,000/- & remain unused & thereafter the same money was used to repay the loan & re-depositing in canara bank on 13/02/2019 was also not found to be acceptable by the AO. As the assessee also claims that her husband Shri Siddharaddi had sold two of his agricultural land for which sale proceeds amounting to Rs. 7,00,000/- was also used as source for repayment of loan of the assessee existed in Canara Bank & therefore, the AO was of the view that assessee has been able to explain the source of cash deposit being repayment of her loans with Canara Bank to the extent of Rs. 7,00,000/-. However, since the assessee has not been able to explain the balance amount of Rs. 15,38,248/- (i.e. Rs. 22,38,248/- minus Rs. 7,00,000/-) and explanation furnished by the assessee with regard to the source of cash deposits were not found to be satisfactory and accordingly treated the same as unexplained money in the hands of the assessee under section 69A of the Income Tax Act, 1961.
Smt. Kashavva S Rangaraddiyavar 4. Aggrieved by the assessment completed under section 147 r.w.s. 144B of the Income Tax Act, 1961 dated 30.01.2024, the assessee preferred an appeal before the ld. CIT(A) / NFAC. The ld. CIT(A) dismissed the appeal by observing that notice under section 250 of the Income Tax Act, 1961 dated 9.05.2024 was issued to the assessee and the last date to comply with the above notice was 13.05.2024 but as the assessee appellant choose not to comply with the above mentioned notice or make any submissions, the ld. CIT(A) was of the view that this behaviour of the appellant of not providing the relevant details was also seen during the course of assessment proceedings before the AO and appellant is not serious about its appeal and simply wasting time. Further, the ld. CIT(A) noted that the assessment order was passed on dated 30.01.2024 and the assessee has filed the appeal belatedly by 40 days approx but the appellant has not filed any application for the condonation of delay and in fact in Form No. 35 filed by the assessee , he had stated “No” in the sl. No. 14 of Form 35 in response to delay in filing appeal. Thus due to the non-compliant behaviour of the appellant during the assessment proceedings as well as during the appellate proceedings and in the absence of condonation of delay application, the appeal of the assessee was rejected outrightly and the addition made by the AO amounting to Rs. 15,38,248/- on account of unexplained money under section 69A of the I.T. Act, 1961 was found to be correct and accordingly upheld.
Aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present appeal before the Tribunal.
Before us, the ld. AR of the assessee submitted that the Appeal fee of Rs. 1,000/- was deposited on 29.02.2024 vide challan Serial No. 14652 but due to the technical glitches in the income tax web portal, the assessee could not upload the Form No.35 along with the relevant attachments. The assessee had also filed two number of grievances vide Acknowledgment No. 16334071 and 16457548 stating that “unable to upload duly filled Form No. 35 in spite Smt. Kashavva S Rangaraddiyavar of repeated efforts. The error shown in form data has some errors. Please fix and then try again.” On account of aforesaid circumstances, it has been stated in Form No. 35 that there was no delay in filing the appeal before the ld. CIT(A). The ld. AR of the assessee also drew our attention towards affidavit dated 29.07.2024 filed before us stating that there was a delay of 54 days’ in filing the appeal before the ld. CIT(A) considering the date of service of assessment order. The delay of 54 days in filing the appeal before the ld. CIT(A) occurred due to the fact that the assessee was unable to file the prescribed Form No. 35 along with the relevant attachments on the e-filing Portal on account of certain errors reflected in the e-filing Portal. Further, the ld. AR of the assessee drew our attention that the ld. CIT(A) had also not provided a fair opportunity of being heard in as much as a single notice posting the case for hearing under section 250 of the Act was issued electronically allowing just four days time which went unnoticed due to the fact that assessee is only an agriculturist and he is not well conversant with the technologies and accordingly prayed before us that the delay in filing the appeal before the ld. CIT(A) may be condoned and the matter may be set aside to the file of ld. CIT(A) / ld. AO to be disposed of on merits for the advancement of the substantial cause of justice.
The ld. DR, on the other hand, vehemently supported the orders of the authorities below and submitted that although there is a delay of 54 days in filing the appeal before the first appellate authority but the assessee has not filed any condonation petition for such delay. Further, as the assessee had not submitted any evidence regarding source of cash deposits the ld. authorities below had rightly treated the same as unexplained money under section 69A of the Act.
We have heard the rival submissions and perused the material on record. It is an undisputed fact that there is a delay of 54 days in filing the appeal before the first appellate authority. The assessee has duly explained that the Smt. Kashavva S Rangaraddiyavar delay was due to the fact of technical glitches in the Income Tax Portal which can also be verified from the Acknowledgement of grievances submitted before us.
We have noted that ld. CIT(A) had issued notice under section 250 of the Income Tax Act on dated 09.05.2024 fixing the compliances to be made on or before 13.05.2024 by giving just four days’ time the submissions. We also note that ld. CIT(A) has not adjudicated the case on merits and dismissed the appeal of the assessee holding that appellant is not serious about its appeal and simply wasting time. Therefore, considering the totality of the facts of the case and the prayer of the assessee, we deem it fit & proper to condone the delay in filing the appeal before the ld. CIT(A) due to the above mentioned bona fide reasons and further remit the file to the ld. CIT(A)/NFAC for de novo adjudication, in accordance with the law, after affording due opportunity of hearing to the assessee. The assessee is also directed to co-operate with the proceedings before the ld. CIT(A) /NFAC and to file the relevant submissions / documents which would be essential and required by the first appellate authority for proper adjudication of the case. We clarify that in case of further default by the assessee, she shall not be entitled for any leniency.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open Court on 3rd September, 2024. 11.
Sd/- Sd/- (LAXMI PRASAD SAHU) (KESHAV DUBEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Bengaluru, Dated: 3rd Sept, 2024 Sh/vg (on tour)
Copy to:
The Appellant 2. The Respondent 3. The CIT, concerned 4. The DR, ITAT, Bengaluru 5. Guard File By Order //True Copy// Assistant Registrar ITAT, Bengaluru S.No. Details Date Initials Designation 1 Draft dictated on 02.09.2024 Sr. PS/PS 2 Draft placed before author 02.09.2024 Sr. PS/PS Draft proposed & placed before the 3 JM/AM Second Member Draft discussed/approved by Second 4 AM/AM Member 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement Sr. PS/PS 7 File sent to Bench Clerk Sr. PS/PS 8 Date on which the file goes to Head Clerk 9 Date on which file goes to A.R. 10 Date of Dispatch of order