SUDHEER CHAMARTHI,GUNTUR vs. INCOME TAX OFFICER, WARD-1(1), GUNTUR

This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeal) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi in DIN & Order No.ITBA/NFAC/S/250/2021- 22/1041354665(1) dated 23.03.2022 for the Assessment Year (A.Y.)2017-18 with the delay of 163 days. The assessee filed an affidavit, submitting that the order of the Ld.CIT(A) was uploaded in e-filing portal and it was not served physically. The assessee submitted that all his income tax matters were entrusted to a Chartered Accountant, who did Sudheer Chamarthi, Guntur not seem to have viewed the order of the Ld.CIT(A). The assessee further submitted that the appellate order came to his knowledge when a show cause notice for penalty under section 271AAC(1) of the Income Tax Act, 1961 (in short “Act”) dated 14.10.2022 was issued with a note appended to the said notice that the appeal filed before the CIT(A) was disposed of on 23.03.2022 granting partial relief and requiring the assessee to show cause as to why penalty under the said section should not be levied for the addition sustained by the Ld.CIT(A). The time for filing appeal before the Tribunal expired as on 22.05.2022. Not satisfied with the services of the Chartered Accountant, the assessee approached another Advocate who advised that an appeal lies against the order of the Ld.CIT(A) and accordingly, the assessee filed appeal which was delivered to the Registry of the Tribunal on 01.11.2022, causing delay of 163 days. The assessee filed a petition for condonation of delay and submitted that the reasons for the delay are beyond the control of the assessee and not intentional. The assessee did not stand benefitted by filing the appeal with the delay. He therefore prayed to condone the delay and admit the appeal for hearing.

Brief facts of the case are that the assessee is an individual, deriving income from other sources, had filed his return of income for the A.Y.2017-18 through e-filing on 07.08.2017, declaring total income at Rs.3,01,990/-. The return of income was processed u/s 143(1) of the Act on 27.09.2017 by CPC, Bangalore. Subsequently, the case was selected for limited scrutiny under CASS with a reason to examine the issue of “Cash deposits made during demonetisation period”. Notices u/s 143(2) was issued on 21.09.2018 and further notices 142(1) dated 09.01.2019 and 10.07.2019 were issued calling for certain information. In response, the assessee furnished part of e-submissions / information, without furnishing the evidences in support of the sources for the cash deposits made during demonetization period for the F.Y.2016-17. Therefore, the AO completed the assessment and passed an order dated 03.12.2019 u/s 143(3) of the Act, treating the cash deposits as cash deposits made from the unexplained sources during the A.Y.2017-18 and made an addition of Rs.11,08,000/- u/s 69A of the Act.

Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) held that considering the assessee as a regular income tax filer, a reasonable amount of Rs.2,50,000/- can be considered to be available in cash at home, accumulated in the hands of all the family members in few years. Hence, the Ld.CIT(A), out of cash deposit of 11,08,000/- made, partly allowed a sum of Rs.2,50,000/- as explained and treated the remaining amount of Rs.8,58,000/- as unexplained cash u/s 69 A of the Act..

Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal :

The learned CIT(Appeals) ought to have observed that the parents of the appellant have sufficient sources for providing cash gifts to the appellant and they are income-tax assessees filing the returns of income.

Per contra, the Ld.DR relied on the order passed by the Ld.CIT(A) and submitted that the Ld.CIT(A) is justified in giving part relief to the assessee. He, therefore, pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee.

I have heard both the parties and perused the material available on record. The assessee is an individual, doing private computer works and his main source of income is income from other sources. It is undisputed fact that the assessee is assessed to income since the A.Y.2015-16. The assessee’s mother and father are also assessed to income tax, who filed returns of income regularly. The assessee filed paper book with copy of acknowledgement, having filed the return of income, statement of income, bank statements, confirmation letters from his parents, having received the gifts in cash. On perusal of the same, I find that the assessee has ample chances for savings and make deposits, therefore, I am inclined to give relief of Rs.1,00,000/- more in addition to the relief of Rs.2,50,000/- given by the Ld.CIT(A). I direct the AO to give relief of Rs.1,00,000/- out of Rs.8,58,000/- and confirm the addition to the extent of Rs.7,58,000/-. Accordingly, the grounds raised