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Facts
The assessee, engaged in the business of textiles and paddy, filed a return for AY 2017-18 admitting an income of Rs. 9,71,550. The Assessing Officer (AO) made an addition of Rs. 1,33,48,250 for unexplained cash deposits, invoking Sections 69 and 115BBE of the Income Tax Act.
Held
The Tribunal noted a significant delay of 721 days in filing the appeal, which was condoned due to the assessee's ill-health. Although the assessee failed to comply with multiple notices from the CIT(A), the Tribunal set aside the CIT(A)'s order.
Key Issues
Whether the delay in filing the appeal should be condoned and whether the addition made by the AO and confirmed by the CIT(A) is justified.
Sections Cited
69, 115BBE, 143(3)
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI S.S. VISWANETHRA RAVI, HON’BLE & SHRI S. R. RAGHUNATHA, HON’BLE
PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 24.06.2022 and pertains to assessment year 2017-18.
At the outset, we find that there is a delay of 721 days in appeal filed by the assessee, for which petition for condonation of delay along with reason that due to ill-health the delay in :-2-: ITA. No: 2147/Chny/2024 filing the appeal has happened. After considering the petition filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeal and admit appeal filed by the assessee for adjudication.
The assessee is an individual carrying on the business of textiles and paddy in Tirupattur. The assessee filed his return of income on 18.11.2017 by admitting an income of Rs.9,71,550/-. The case was selected for scrutiny under CASS and statutory notices were issued. In response, the assessee has filed financials, bank statements, VAT returns, Audit reports etc before the Assessing Officer. After verification of bank statements, the Assessing Officer noticed that during the financial year 2016-17, the assessee had deposited cash of Rs.1,33,48,250/- into his Canara Bank account and explained that the same has been made out of cash sales and amount withdrawn from the bank. However, the Assessing Officer was not convinced with the explanation and made an addition u/s. 69 of the Act as unexplained money and brought to tax u/s. 115BBE of the Act to the returned income by passing order u/s. 143(3) of the Act
:-3-: ITA. No: 2147/Chny/2024 dated 28.12.2019. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld.CIT(A).
The ld.AR took us through the Para 4 of the ld.CIT(A) order, wherein seven opportunities were given by issuing notices to the assessee to participate in the appellate proceedings as detailed below: “4. Non-compliance : This appeal was filed on 04.02.2020 and after rolling out the Faceless Appeal Scheme, first notice of hearing in this case was issued on 30.12.2020 seeking compliance by 14.01.2021. However, there was neither any response on the prescribed date nor any submission was filed. In fact the appellant has not at all complied during the appellate proceedings. Following notice of hearing/opportunities were given to appellant to represent his case: Sl.No Date of Date of Remarks issue compliance 1 30.12.2020 14.01.2021 No response or submission received 2 12.11.2021 22.11.2021 No response or submission received 3 29.11.2021 06.12.2021 No response or submission received 4 12.01.2022 19.01.2022 No response or submission received 5 07.02.2022 14.02.2022 No response or submission received 6 02.03.2022 10.03.2022 No response or submission received 7 01.06.2022 08.06.2022 No response or submission received
:-4-: ITA. No: 2147/Chny/2024 But the assessee has failed to comply with any of the notices. Therefore, the ld.CIT(A) had passed order dated 24.06.2022 by confirming the Assessing Officer’s order with the available details and records in the file. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.
The ld.AR submitted that the assessee had filed all the details of financials, audit report, bank statement before the Assessing Officer. However, the Assessing Officer has not accepted the same and prayed for remanding the file back to the Assessing Officer for furnishing the details and source of cash deposits made during the financial year 2016-17.
Per contra, the ld.DR, argued that the assessee was negligent and had not even filed a return of income even after issuing notice. Therefore, the appeal of the assessee deserves to be dismissed.
We have heard the rival contentions and gone through the materials available on record and orders of the authorities below. We note that the Assessing Officer has passed an order by making an addition of Rs.1,33,48,250/- without considering any kind of expenditure. The ld.CIT(A) also has confirmed the :-5-: ITA. No: 2147/Chny/2024 Assessing Officer’s order without any participation of the assessee. As prayed by the ld.AR and considering the facts and circumstances of the case, we deem it fit to set aside the order of the ld.CIT(A) and remit the matter back to the file of the AO by relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Company vs CIT, [2001] 249 ITR 216 (SC) and direct AO to denovo frame the order in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.