CHANDRA SHEKHAR CARPRNTER,AGAR MALWA vs. THE ITO,WARD, 1-1 , UJJAIN

Ld. AR has submitted the delay in filing the appeal is neither intentional nor willful but due to the reasons that the assessee was not served upon with the impugned order and come to know about the impugned order only when the department attached the bank account of the assessee on 15.05.2023. He has pleaded that the delay in filing the present appeal be condoned and appeal of the assessee be decided on merits.

On the other hand, Ld. DR has submitted that the order of the Ld. CIT(A) was duly sent to the e-mail-ID given by the assessee and SMC – of 2023 3 Chandra Shekhar Carpenter therefore, the assessee cannot take a plea of none-service of the impugned order. He has objected to the condonation of delay.

I have considered the rival submissions and perused the contents of the affidavit filed by the assessee to explain the cause of delay in para no.2 to 4 of the affidavit as under: “2. I am the appellant in my own case; against the order of ld. CIT(A) for AY 2009-10. I am from rural area. Due to my own ill health, I had closed business after this year and joined as school teacher in rural area. Since Mar 17 and particularly after Covid infection, my health became worse and I do my duty of teacher ship with much difficulty. 3. That I had not received the appeal order any time and I came to know of the same only when Narmada Jhabua Gramin Bank intimated me on 15/5/23 that my bank account had been attached by income tax department due to arrear demand. 4. Then I approached CA Mr. Atul Chauhan of Ujjain who obtained copy of appeal order from income tax website and advised me to file appeal before Hon'ble ITAT by engaging senior practitioner. Accordingly work of preparation of appeal started.”

It transpires from the record that e-mail ID given in form no.35 appears to be of authorized representative and not of the assessee and therefore, the possibility of non-communication of the impugned order to the assesse is not rules out.

Having considered the facts and circumstances of the case when the assessee belongs to the rural area and the impugned order was not received by the assessee in time I am satisfied that the assessee was having a reasonable cause for not filing the appeal within the period of limitation. Accordingly in the facts and circumstances of the case and in the interest of justice the delay in SMC – of 2023 4 Chandra Shekhar Carpenter filing the appeal is condoned. The assessee has raised following grounds of appeal as under: “1.Entire proceedings by way of sec. 148 is null and void ab initio. 2.ld. CIT(A) erred in confirming addition of bank deposit of Rs. 11,,00,650/-.”

The assessee did not filed any return of income for the year under consideration and thereafter the AO issued notice u/s 148 of the Act on 23.03.3016 to assess the income of the assessee on account of deposit of Rs.11,00,650/- in the Saving Bank Account of the assessee. In response to the notice the assessee filed return of income declaring total income of Rs.1,27,370/- and also explained that the said deposit in bank account represents the sale proceeds of the business of trading in Cattle Feed (Cotten Seed Cake). The assesse has also explained that the entire purchase and sale has been done through the said bank account and pointed out that all the payment for purchase of goods were made through demand drafts as reflected in the bank account of the assessee. The AO passed the assessment order u/s 143(3) r.w.s. 147 on 25.11.2016 whereby the return income of the assessee was accepted which is below the minimum slab of taxable income. Thereafter, the order of the AO passed u/s 143(3) r.w. section 147 was revised by the Pr. CIT, Ujjain u/s 263 vide order dated 05.03.2019 and thereby the AO was directed to examine the issue of source of cash deposit in the bank account after giving proper opportunity of hearing to the assessee. In the assessment order passed in pursuant u/s 263

On the hand, ld. DR has submitted that the assessee has failed to explain the source of deposit in the bank account and consequently the AO has passed best judgment in pursuance to under section 263 order passed by the Pr. CIT. He has further submitted that the assesse did not challenge the order of the Pr. CIT passed u/s 263 of the Act and therefore, the AO as well as the Ld. CIT(A) is justified in assessing income of the assessee on account of deposit made in the bank account.

I have considered the rival submissions as well as relevant material on record. The assessment was reopened by the AO for assessing the income on account of deposit made in the bank

Thus, the deposit as well as withdrawal mostly by issuing cheques in banks favour showing the narration y/s (yourself) clearly manifest the transactions of issuing drafts as explained by the assessee for purchase of the goods. The AO has added the entire deposit in the bank account to the income of the assessee without even considering facts available on record in the shape of the bank account statement of the assessee having both entries of deposit as well as the payments through bank drafts. Therefore, the addition made by the AO ignoring the relevant facts available on record is not justified when the assessee have already explained the source of deposit as sale proceeds and corresponding withdrawals represent the payments made for the purchases through bank drafts corroborating explanation of the assessee. Accordingly having considered the undisputed facts as reflected from the bank account statement of the assesse the addition made by the AO of the entire

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