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Facts
The assessee's appeal for AY 2012-13 arose against an order of the NFAC, which dismissed the appeal in limine due to a 55-day delay. The assessee had made cash deposits of Rs. 34.90 lakhs during demonetization, which were assessed as unexplained by lower authorities.
Held
The tribunal condoned the delay in filing the appeal before the first appellate authority, considering it was explained by circumstances beyond the assessee's control. The tribunal held that a lump sum addition of Rs. 3.49 lakhs, representing an estimated profit of 10% on the unexplained deposits, was appropriate.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned and if the unexplained cash deposits could be treated as business turnover with a profit addition.
Sections Cited
147, 143(3), 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
Faceless Appeal Centre (NFAC) Delhi’s’ order dated 22.05.2025 [DIN & Order No. ITBA/NFAC/S/250/2025-26/1076367673(1)] in proceedings u/s 147 r.w.s.
143(3) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties. Case file perused.
It emerges during the course of hearing that the learned first appellate authority has dismissed the assessee’s appeal in limine since barred by limitation learned counsel at bar explaining the corresponding circumstances beyond control for delay in filing the appeal before the CIT(A) and to do substantial justice to parties by disposing of matters on 'merits' as envisaged in Collector Land Acquisition v. Mst. Katiji & another (1987) 167 ITR 471 (SC), I hereby condone the above delay in filing the appeal before the first appellate authority and proceed to adjudicate the instant appeal on merits after hearing both the parties.
Next comes the sole substantive issue between the parties. The assessee appears to have made cash deposits of Rs. 34.90 lakhs during demonetization which stand assessed as “unexplained” in both the learned lower authorities’ respective findings. There is hardly any dispute between the parties that the assessee is admittedly engaged in mattress trading retail activity etc.; and, therefore, necessary inference which would prima facie arise herein is that the impugned deposits is part of business turnover only although not reconciled or verified before the learned lower authorities. That being the case and in the larger interest of justice ,it is deemed appropriate that a lump sum addition of Rs. 3.49 lakhs @ 10% representing estimated profit element therein would be just and proper with the rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law. could hardly dispute that hon’ble Madras high court in SMILE Microfinance Ltd. v. ACIT in WP(MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue that Section 115BBE applies on transactions on or after 01.04.2017 only. The ld. AO is directed to ensure that the assessee shall be assessed under normal provisions qua the above addition of Rs. 3.49 lakhs (supra).
This assessee’s appeal ITA 4584/Del/2025 is partly allowed in very terms.
Order pronounced in open court on 28.08.2025.