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Income Tax Appellate Tribunal, “ D ” BENCH, AHMEDABAD
Before: MS. SUCHITRA KAMBLE & SHRI MAKARAND V. MAHADEOKAR
आयकर अपीलीय अिधकरण, अहमदाबाद "ायपीठ “डी“, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL “ D ” BENCH, AHMEDABAD सु"ी सुिच"ा का"ले, "ाियक सद" एवं "ी मकरंद वसंत महादेवकर, लेखा सद" के सम#। ] ] BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं / Year : 2017-18 Valjibhai Arjanbhai Vegad The Income Tax Officer बनाम/ Rajput Street Ward-1(9) v/s. Nawangam Ga Bhavnagar- 364 002 Tal : Vallabhipur Bhavnagar – 364 313 (Gujarat) "थायी लेखा सं./PAN: AYKPV 0860 F अपीलाथ&/ (Appellant) '( यथ&/ (Respondent) Assessee by : Shri Mohit Balani, AR Revenue by : Shri Surendra Kumar, Sr.DR सुनवाई की तारीख/Date of Hearing : 12/11/2024 घोषणा की तारीख /Date of Pronouncement: 21/11/2024 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM:
This appeal has been filed by the assessee, Shri Valjibhai Arjanbhai Vegad, against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”], Ahmedabad, dated 21/07/2023 for the Assessment Year (AY)2017-18. The appeal challenges the ex-parte order passed by the CIT(A), which upheld the addition made by the Assessing Officer [hereinafter referred to as “AO”] Valjibhai Arjanbhai Vegad vs. ITO Asst. Year : 2017-18 under Section 69A of the Income Tax Act, 1961 [hereinafter referred to as “the Act”] and other related aspects of the assessment.
Facts of the Case:
The assessee is a 71-year-old milk distributor, as claimed by himself, with limited educational background and a lack of familiarity with legal and tax matters. The assessee had initially assigned the handling of his income tax matters to a consultant, who registered the assessee's account on the income tax e-filing portal with the consultant’s email address for receiving official communications.
2.1. During the demonetization period (November 2016 to December 2016), cash deposits totalling to Rs.12,55,100/- were made in the assessee's bank account, along with other deposits throughout the financial year, aggregating to Rs.66,23,500/-. The AO issued several notices under Sections 142(1) and 144 of the Act, requiring the assessee to file a return of income and explain the sources of these deposits. The assessee’s consultant, despite receiving physical copies of the notices forwarded by the assessee, failed to respond or appear before the AO. Consequently, the AO completed the assessment ex- parte under Section 144 of the Act on 16.11.2019, treating the deposits as unexplained income under Section 69A of the Act and invoking the provisions of Section 115BBE of the Act to tax the income at the rate of 60%. The AO assessed the total income at Rs.66,23,500/- and also initiated penalty proceedings under Sections 271AAC, 272A(1)(d), and 271F of the Act for non- compliance and non-filing of return. Valjibhai Arjanbhai Vegad vs. ITO Asst. Year : 2017-18 3 3. Aggrieved by the AO’s order, the assessee filed an appeal before the CIT(A). However, the appeal proceedings also proceeded ex-parte, as the assessee did not respond to multiple notices issued by the CIT(A). On 21.07.2023, the CIT(A) upheld the AO’s additions and dismissed the appeal due to non-appearance and non-submission of any documents by the assessee.
Therefore, the assessee is in appeal before us with following grounds of appeal:
1. The learned CIT(A) as well as Assessing officer has erred in law and on facts of the case in passing the impugned orders ex-parte.
2. Learned CIT(A) has erred in law and on facts of the case in confirming the action of learned AO in making an addition of Rs.66,23,500/- u/s 69A of the Act.
3. Learned CIT(A) has erred in law and on facts of the case in confirming the action of learned AO in invoking the provisions of S.115BBE of the Act.
4. Learned CIT(A) and AO has erred in law and on facts in not properly appreciating and considering various evidence and supporting documents available on record during the course of the assessment proceedings and not properly appreciating various facts and law in its proper perspective.
5. Learned CIT(A) has erred in law and on facts of the case in confirming the action of learned AO in charging interest u/s.234A/B/C/D.
6. Learned CIT(A) has erred in law and on facts of the case in confirming the action of learned AO in initiating penalty u/s 271AAC, 272(1)(d) and 271F of the Act.
7. Your appellant craves liberty to add, to alter, to modify, to amend or to withdraw / delete any of the grounds of appeal at any time, on or before the hearing of appeal.
The assessee filed an appeal before us along with an application for condonation of delay of 244 days. The Authorized Representative (AR) explained the reasons for the delay, supported by an affidavit from the assessee. The AR submitted that the assessee was unaware of the tax Valjibhai Arjanbhai Vegad vs. ITO Asst. Year : 2017-18 proceedings and did not have access to the electronic notices due to his dependence on the consultant and his limited technological literacy.
5.1. In his affidavit, the assessee provided the following reasons for non- compliance with the AO’s and CIT(A)’s proceedings: • The assessee initially engaged a consultant, who registered the assessee’s tax credentials under his own email address (caksgohil@gmail.com) on the income tax portal. The assessee, relying on his consultant’s expertise, forwarded all physical copies of notices promptly but did not know that the consultant failed to act. • After learning about the ex-parte assessment order, the assessee engaged a new consultant and filed Form 35 for an appeal before the CIT(A), specifically requesting that all future notices be served in physical form due to the assessee’s limited access to electronic communications. However, subsequent notices were sent to a temporary email (ravirajsinhvegad8631@gmail.com), to which the assessee had limited access, leading to further non-compliance. • The assessee highlighted his lack of education and age-related limitations as additional factors contributing to his inability to respond to the notices. Furthermore, the assessee emphasized language barriers, as the proceedings were conducted in English, which he could not fully comprehend.
5.2. The affidavit states that the assessee’s non-appearance and delay in filing the appeal were unintentional and due to genuine hardships, including reliance on an ineffective consultant and limited access to digital communication. The assessee requested that the delay be condoned in the interest of justice, as he was unable to participate in the proceedings despite his best efforts. Valjibhai Arjanbhai Vegad vs. ITO Asst. Year : 2017-18
The Departmental Representative (DR) did not object to the condonation of delay, considering the genuine difficulties faced by the assessee as explained in the affidavit. The DR expressed no objection to allowing the assessee a fresh opportunity to present his case, given the unusual circumstances.
After hearing the submissions of both parties and reviewing the affidavit and other documents on record, we find that the delay in filing the appeal was caused by genuine hardships faced by the assessee. The assessee, being of advanced age and lacking formal education and technological knowledge, was heavily reliant on his consultant, who failed to act responsibly. Additionally, the language barrier and lack of access to electronic notices further compounded the assessee’s difficulties in complying with the proceedings.
7.1. In light of these facts, we are of the view that the delay in filing the appeal is neither intentional nor due to negligence on the part of the assessee. The assessee has demonstrated a bona fide reason for the delay, and in the interest of substantial justice, we hereby condone the delay of 244 days.
7.2. Regarding the merits of the case, we observe that the orders passed by both the AO and the CIT(A) were ex-parte. Given the assessee’s limited opportunity to present evidence and explanations due to genuine hardships, we believe that the assessee should be provided a fair chance to present his case. Valjibhai Arjanbhai Vegad vs. ITO Asst. Year : 2017-18 7.3. In the interest of justice, we set aside the ex-parte order of the CIT(A) dated 21.07.2023 and restore the matter to the file of the AO for fresh adjudication. The AO is directed to issue fresh notices and grant the assessee an adequate opportunity to present relevant documents and explanations regarding the cash deposits and other issues raised during the assessment. The assessee is directed to cooperate fully with the AO and respond to notices within the stipulated time to enable a timely resolution of the case.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.