CHILAKALA GOVINDA SEKHAR,MYLAVARAM vs. INCOME TAX OFFICER, WARD-1, PRODDUTUR

At the outset, we find that there is a delay of 331 days in the appeal filed by the assessee before the Tribunal, for which a petition for condonation of delay along with an affidavit, explaining the reasons for the delay in filing the appeal has been 2 filed. The learned Counsel for the assessee, referring to the petition filed by the assessee, submitted that the appellant is an agriculturist and not well educated and therefore, has no knowledge of income tax matters and any appeal proceedings. The appellant has given the case to a consultant to handle the matters before the appellate authorities and the appellant requested his friend, Kommaddi Venkata Narasimhulu to provide his credentials for operating his online proceedings through income tax portal. The consultant used appellant’s friend, Shri Kommaddi Venkata Narsimhulu’s credentials and filed the appeal. The Ld.CIT(A) passed the order and sent the appellate order to the email id given in Form 35, which has not been noticed by his friend. Further, the appellant noticed that the appellate order was passed by the Ld.CIT(A), in the second week of November 2024 and he had taken steps to file the appeal before the Tribunal, which caused delay of 331 days, however, the said delay is neither intentional nor wanton of any undue benefit, but beyond the control of the appellant. Therefore, in the interest of justice, the delay in filing the appeal should be condoned.

The Ld.DR on the other hand, opposing the petition filed by the assessee submitted that the reasons given by the assessee are vague in nature and does not come under reasonable cause for condoning huge delay of 331 days in filing the appeal. Therefore, the delay in filing the appeal should not be condoned.

The brief facts of the case are that the appellant is an individual and non-filer for the A.Y.2017-18. As per the information available in AIMS Module of ITBA, the Assessing Officer noticed that the assessee has deposited cash of Rs.17,70,355/- into the bank account. Accordingly, notice u/s 142(1) of the Income tax Act, 1961 (“the Act”) was issued, calling for income tax return for the A.Y. 2017-18. In response to the notice, the assessee has filed his return of income on 04.08.2018, admitting total income of Rs.2,48,000/- and agriculture income of Rs.1,15,000/-. The case was selected for 4 scrutiny and during the course of assessment proceedings, the Assessing Officer noticed that the assessee has made cash deposit of Rs.17,70,355/- in the bank account held with State Bank of India, Jammalamadugu. The Assessing Officer obtained relevant bank account statements from the bank u/s 133(6) of the Act. The Assessing Officer called upon the assessee to explain the sources of income, in response, the assessee submitted that he is an agriculturist owns 7.44 acres of agricultural land and derives agricultural income. The assessee further submitted that he has borrowed gold loan from the bank for the purpose of agricultural operations and the available cash has been redeposited into the bank account during the demonetization period. The Assessing Officer, after considering the relevant submissions of the assessee and also taking note of agricultural land holding, accepted the explanation of the assessee, in respect of source from agricultural operations and allowed credit to the extent of Rs.8,00,000/- cash deposited into the bank account, out of agricultural income and the balance cash deposit of Rs.9,70,355/- has been treated as unexplained income u/s 69A of the Act, on the ground that the appellant could not explain the nature and source of cash deposited into the bank account during the demonetization period.

Being aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the Ld.CIT(A), the assessee neither appeared nor filed any details, which is evident from para 5 of the order of the Ld.CIT(A), where, three dates of hearing were provided to the assessee, but no compliance. Therefore, the Ld.CIT(A) by following certain judicial precedents

Aggrieved by the Ld.CIT(A) order, the assessee is now in appeal before the Tribunal.

The learned Counsel for the assessee submitted that the Ld.CIT(A) erred in sustaining the addition of Rs.9,70,355/- towards cash deposited in the bank account, even though the assessee has explained the source for cash deposited out of gold loan availed from the bank in the month of April 2016 and the same has been redeposited into bank account for closure of gold loan in the month of November, 2016. In this regard, he has furnished relevant ledger extracts availed from State Bank of India and corresponding bank statements. Therefore, submitted that the additions made by the Assessing Officer and sustained by the Ld.CIT(A) should be deleted.

The Ld.DR on the other hand, supporting the order of the Ld.CIT(A) submitted that the appellant could not explain the source for balance cash deposit of Rs.9,70,355/-. Although the appellant claimed to have availed gold loan and the same is available to explain the source for the cash deposited, but the purpose of availing gold loan and keeping the cash in hand is not explained. The Ld.CIT(A), after considering relevant facts has rightly sustained the additions made by the Assessing Officer and their order should be upheld.

In the result, appeal filed by the assessee is partly allowed.