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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
PER DUVVURU RL REDDY, Judicial Member :
This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)-NFAC] in DIN & Order No. ITBA/NFAC/S/250/2023-24/1063565941(1), dated 28/03/2024 arising out of the order passed U/s. 147 r.w.s 144 of the Income Tax Act, 1961 [“the Act”] for the AY 2016-17.
Briefly stated the facts of the case are that the assessee is a Cooperative Society has not filed its return of income for the AY 2016-17. As per the information available with the Department, it is observed by the Ld. AO that the assessee society has deposited cash amounting to Rs. 1,11,69,421/- in the State Bank of India, Jami Branch, Vizianagaram but did not file any return of income for the AY 2016-17. Since, no return has been filed, the cash deposits remained unexplained. Therefore, after recording the reasons and obtained the approval from the competent authorities, the case of the assessee was reopened by issued notice U/s. 148 of the Act on 31/03/2021. Since there is no compliance from the assessee, notice U/s. 142(1), dated 01/09/2021 was issued to the assessee and thereafter another notices U/s. 142(1) were also issued on 10/12/2021 and 24/12/2021 requiring the assessee to explain the nature and source of cash deposits. Though the assessee was given multiple opportunities, there was no response on behalf of the assessee and therefore the Ld.AO converted the assessee’s case U/s. 144 of the Act and a show cause notice U/s. 144, dated 01/02/2022 was issued to the assessee to explain as to why the assessment proceedings should not be completed as per the material available on record and furnish his explanation on or before 07/02/2022. Even then, there was no response from the assessee and therefore, the Ld. AO proceeded to invoke the provisions of section 144 of the Act. Meanwhile, the Ld. AO also tried to obtain the details of cash transactions in the assessee’s bank account from State Bank of India, Jami Branch U/s. 133(6) of the Act but till the date of passing of the assessment order, the Ld. AO could not get the reply from the bank. In such situation, considering the facts and circumstances of the case as well as based on the material before the Ld. AO and also considering the assessee’s failure to respond to any of the statutory notices issued, the Ld. AO was of the opinion that the assessee has nothing to explain regarding the cash deposits of Rs. 1,11,69,421/- in bank accounts and the same was treated as unexplained money U/s. 69A of the Act. Thus, the Ld. AO completed the assessment and determined the assessed income at Rs. 1,11,69,421/- and passed the assessment order U/s. 147 r.w.s 144 r.w.s 144B of the Act dated 25/03/2022. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal belatedly before the Ld. CIT(A)- NFAC with a delay of 309 days.
2. On appeal, the Ld. CIT(A)-NFAC, did not condone the delay of 309 days in filing the appeal and dismissed the assessee’s appeal. While dismissing the assessees’ appeal, the Ld. CIT(A)- NFAC observed that the assessee has given unsustainable reason for undue delay in filing the appeal. The reason ie., not awareness about assessment proceedings is not acceptable without evidences on record. The assessee had no valid or cogent reason for the delay. Hence, the assessee has not discharged the onus of showing that he had sufficient cause for not filing the appeal within time. The Ld. CIT(A)-NFAC also observed that the delay in filing the appeal does not merit condonation and the appeal is treated to be filed late with reference to the provisions of section 249(3) of the Act. Thus, the Ld. CIT(A)-NFAC dismissed the assessee’s appeal without going into the merits of the case. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before the Tribunal by raising the following grounds of appeal:
“1. The Ld. CIT(A) is not justified in refusing to condone the delay in filing the appeal before him even though the appeal is filed within the time allowed from the date the assessee came to know about the order passed by the Assessment Unit, National Faceless Assessment Centre.
2. The reopening of assessment U/s. 147 is invalid and bad in law as the notice U/s. 148, dated 31/3/2021 under the old law is issued on 1/4/2021 without following the procedure prescribed under the new law effective from 01/04/2021.
The Assessment Unit, National Faceless Assessment centre, Delhi is not justified in treating the deposits of Rs. 1,11,69,421/- cash deposited in bank account of the assessee as unexplained money U/s. 69A and levying tax thereon U/s. 115BBE.
The Assessment Unit, National Faceless Assessment Centre, Delhi is not justified in charging interest of Rs. 26,28,540/- U/s. 234A and Rs. 27,83,160/- U/s. 234B of the Act.
All the above grounds of appeal
are mutually exclusive and without prejudice to one another.
6. The appellant craves leave to add to, alter, modify, amend or delete all or any of the above grounds of appeal.”
3. At the outset, the Ld. Authorized Representative [AR] submitted that the Ld. CIT(A)-NFAC ought to have considered the explanation of the assessee with respect to the condonation of delay in filing the appeal before the Ld. CIT(A)-NFAC as the assessee was prevented by a reasonable and sufficient cause ie., the assessee was unaware of the assessment proceedings. The Ld. AR further submitted that in support of the reasons advanced by the assessee for filing of the appeal beyond the prescribed time limit before the Ld. CIT(A)-NFAC, the assessee has also produced the evidence in the paper book filed before the Tribunal. The Ld. AR further submitted that the delay in filing the appeal is not on account of negligence or any deliberate act of the assessee. The Ld. AR also pleaded that the assessee became aware of the assessment proceedings only after the serving of the proceedings U/s. 226 of the Act on 27/01/2023. The assessee thereafter filed an appeal on 27/02/2023 before the Ld. CIT(A)- NFAC which is within the specified time limit. The Ld. AR also submitted a copy of the garnishee order which is placed at page No. 26 of the paper book filed before the Tribunal. The Ld. AR therefore pleaded that there is no delay in filing the appeal before the Ld. CIT(A)-NFAC. Ld. AR also submitted that without considering the explanation and the submissions of the assessee, the Ld. CIT(A)-NAFC dismissed the appeal of the assessee by denying the condonation petition filed before him. The Ld. AR also submitted that the case laws relied on by the Ld. CIT(A)- NFAC are not applicable to the case of the assessee as the assessee is not negligent / deliberate but prevented by a reasonable and sufficient cause while filing the belated appeal before the Ld. CIT(A)-NFAC. The Ld. AR therefore pleaded that the matter may be remitted back to the file of the Ld. CIT(A)-NFAC to decide the appeal on merits.
4. On the other hand, the Ld. Departmental Representative [DR] heavily relied on the orders of the Ld. Revenue Authorities. The Ld. DR further submitted that while passing the ex-parte order the Ld. AO has given sufficient opportunities to the assessee and sought to find out the sources of cash deposits made by the assessee. Therefore, the Ld. AO is right in his action in making the addition of Rs. 1,11,69,421/- as unexplained money U/s. 69A of the Act. The Ld. DR further submitted that before the Ld. CIT(A)-NFAC even though there is a delay, the onus is on the assessee to explain each day’s delay with proper evidence. The Ld. DR also submitted that since the assessee has not discharged his onus, the Ld. CIT(A)-NFAC has rightly dismissed the appeal of the assessee as inadmissible. In toto, the Ld. DR supported the decision of the Ld. Revenue Authorities and pleaded to upheld the decision of the Ld. AO.
5. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. It is a fact that on being aggrieved by the addition made by the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A)-NFAC with a delay of 309 days. It is also a fact that with respect to the belated filing of the appeal, the assessee has explained its reasons by stating that the assessee was not aware about the assessment proceedings and therefore the appeal could not be filed within the stipulated time before the Ld. CIT(A)- NFAC. Further, in support of the reasons advanced by the assessee, the assessee has also produced evidences before us in the form of paper book. In our considered opinion, the Ld. CIT(A)- NFAC ought to have considered the explanation given by the assessee for belated filing of the appeal and ought to have disposed of the appeal on merits. Instead, the Ld. CIT(A)-NFAC dismissed the appeal. This Bench cannot appreciate the decision of the Ld. CIT(A)-NFAC while dismissing the appeal of the assessee. Therefore, considering the facts and circumstances of the case and the reasons advanced by the Ld. AR as to why the assessee could not file the appeal within the stipulated time before the Ld. CIT(A)-NFAC and also on careful perusal of the documentary evidence and arguments submitted by the assessee, we are of the considered view that it is a fit case to condone the delay of 309 days in filing the appeal before the Ld. CIT(A)-NFAC since there is no willful negligence or latches on the part of the assessee. Therefore, we hereby set-aside the order passed by the Ld. CIT(A)-NFAC and thereby remit the matter to the file of the Ld. CIT(A)-NFAC with a direction to dispose of the appeal on merits after affording a reasonable opportunity of being heard to the assessee in accordance with the principles of natural justice. Further, we also hereby caution the assessee to cooperate before the Ld. CIT(A)-NFAC in their proceedings, otherwise Ld. Revenue Authorities are at liberty to pass orders in accordance with law based on the material available on record. It is ordered accordingly.
In the result, appeal of the assessee is allowed for statistical purposes as indicated herein above.
Pronounced in the open Court on 31st July, 2024.