Loading judgment…
Facts
The assessee filed an appeal against an ex-parte assessment order passed under section 144, which confirmed additions of over Rs. 11 crore on account of unexplained bank credits. The appeal was filed with a significant delay.
Held
The Tribunal condoned the delay, acknowledging the 'sufficient cause' for the delay and the principle of substantial justice over technical considerations. The Tribunal agreed with both parties to provide an opportunity to the assessee to present their case before the Assessing Officer.
Key Issues
Whether to condone the delay in filing the appeal and to grant an opportunity to the assessee to present their case before the Assessing Officer for a fresh adjudication.
Sections Cited
144, 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Dr. DINESH MOHAN SINHA&SHRI BIJAYANANDA PRUSETH
आदेश/ O R D E R PER Dr. DINESH MOHAN SINHA, JM:
Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2017-18, is directed against the order passed by the National Faceless Appeal Centre (NFAC) vide order dated 21.08.2023, which in turn arises out of an assessment order passed by Income Tax Department / Assessing Officer under section (u/s.) 144 of the Income Tax Act, 1961 vide order dated 08.10.2019.
ITA- 101/SRT/2025 DineshKumar Nanubhai Virval
Grounds of appeal
raised by the assessee, are as followed:
1. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in passing ex-parte order U/s.144 of the Act, 1961.
2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in making addition of Rs. 11,05,86,804/- on account of total credits in all bank accounts during the year treated as alleged unexplained money u/s.69A rws. 115BBE of the Income Tax Act, 1961.
3. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in confirming the action of the Assessing Officer in applying tax rate @60% u/s. 115BBE of the Income Tax Act, 1961 on addition u/s.69A of the Income Tax Act, 1961.
4. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has not offered adequate opportunities to hear the case and passed ex-parte order and hence the case may please be set aside and restored back to the CIT(A) or AO.
5. It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper.
6. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of the hearing of the appeal.
3. At the outset the registry of this court bring into the notice that this Appeal filed by the Assessee is delayed by 465 days. The assesse filed an affidavit of condonation of delay. Ld. AR of the assesse submitted the appellant is an individual. He has not filed his return of income for the AY 2017-18. In this case, information was available that the appellant had deposited cash and other ~ 2 ~ ITA- 101/SRT/2025 DineshKumar Nanubhai Virval credits amounting to Rs. 11,05,86,604/- during demonetization period in the bank. Thereafter, Despite repeated notices during the course of assessment proceedings, no submission has been made by the appellant. The case was selected for scrutiny on the basis of data available in AIMS Module of ITBA, as per data/Information the appellant had deposited huge cash during and after demonetization. The total cash deposit and the other credits in the two accounts of the appellant viz. Kotak Mahindra Bank (08810140001231) and State Bank of India (31746913285) were to the tune of Rs. 11,05,86,604/-. The AO has, in the Assessment Order, at para 8 given the details of various notices issued to the assessee. These notices were sent through Speed Post. Even the Addl. CIT, Range-2(3), Surat had issued notice on 18.09.2019. However, all the notices remained non-complied with. That AO made ex-parte assessment u/s 144 of the Act. During the appellate proceedings, three notices were issued to the appellant, which remained non-complied. Under these circumstances, the order of AO for making addition of Rs. 11,05,86,604/- of cash deposits and the credit entries in the bank accounts has been confirmed by ld. CIT(A).
4. The assesse challenged the legality and validity of order of ld. CIT(A) by moving of an appeal before this Tribunal along with an application for condonation of delay.
5. Ld. AR very humbly submitted that there is no deliberate lethargy, negligence, malafide intention or ulterior motive of assessee in making delay and the assessee does not stand to derive any benefit because of delay. He further submitted that the sole reason of delay is as explained in the condonation-application/affidavit. Ld. AR further submitted unfortunately, the assessee could not file proper particulars to the AO and for this reason, the AO made Ex-Partie order treated entire deposits as unexplained and made addition. But the assessee's case is meritorious and the assessee should be given an opportunity to submit a detailed ~ 3 ~ ITA- 101/SRT/2025 DineshKumar Nanubhai Virval explanation to AO. Ld. AR, therefore, made twin prayers i.e. the delay in filing of appeal be condoned and this case ought to be remanded to AO for adjudication afresh after hearing assesse.
6. Ld. DR for Revenue did not have any objection to the prayer of Ld. AR. However Ld. DR. requested that the assessee must be directed to represent his case before AO.
7. We have considered the submissions made by Ld. AR on behalf of assessees and in the absence of any contrary fact or material on record, the assessee is found to have a "sufficient cause" for delay in filing present appeal as narrated above in foregoing para. We find that section 253(5) of the Act empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a "sufficient cause" for not presenting appeal within prescribed time. It is also a settled position by Hon'ble Supreme Court in Collector, Land Acquisition Vs Mst. Katiji and others 1987 AIR 1353, 1987 2 SCC 387 that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the provision of section 253(5) and the decision of Hon'ble Supreme Court, we take a judicious view and condone delay in this appeal. At the same time, as agreed by both sides and also having regard to the principle of natural justice and fair play, we deem it fit to give one more opportunity to assessee so that the assessee can represent his case before AO for a proper adjudication. Accordingly, we set-aside the order of ld. CIT and the matter remand back to the file of AO for a fresh adjudication after giving opportunity of hearing to the assessee, uninfluenced by his earlier order in any manner. The assessee is also directed to ensure participation in the hearings as may be fixed by AO and do not seek unnecessary adjournments failing which the AO shall be at liberty to pass appropriate order in accordance with law.
~ 4 ~ ITA- 101/SRT/2025 DineshKumar Nanubhai Virval 8. Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in the open court on 28/01/2025.