AFREEN,NAKUR SAHARANPUR V. NFAC, DELHI ITO WARD3(3)(3), SAHARANPUR

ITA 4240/DEL/2024

AI Insights

The case involves two appeals by the assessee, Afreen, against orders from the National Faceless Appeal Centre (NFAC), Delhi, concerning the assessment year 2017-18. The appeals challenge the additions made to her income as unexplained cash deposits during demonetization and a penalty under section 272A(1)(d) for failure to comply with notice requirements. The Tribunal considered the assessee's registration under the Mumbai Shops and Establishment Act, 1948, which indicated her engagement in mobile and money transfer business, to argue that the cash deposits were business receipts. The Tribunal's decision was influenced by the need to balance the legal provisions with the principles of justice and fairness, leading to a partial relief for the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471958 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Collector Land Acquisition v. Mst. Katiji & another (1987) 167 ITR 471 (SC), Smile Micro Finance Co. Ltd. v. ACIT [WP(MD) no. 2078/2020 & 1742/2020 dated 19.11.2024]
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Corroborative evidences
• Section: 69A

Judgement Text

"1 ITA nos. 4240 & 4245/Del/2024 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No.4240 & 4245/Del/2024 Assessment Year: 2017-18 Afreen, House no. 2166 Madni Chowk, Mohalla Banjaran, Nakud Saharnpur-247342. PAN: GBBPS 6487 M Vs Income-tax Officer, Ward-3(1), Saharanpur. APPELLANT RESPONDENT Assessee represented by Shri Abdul Rehman, Adv. Department represented by Shri Sanjay Kumar, Sr. DR Date of hearing 22.01.2025 Date of pronouncement 22.01.2025 O R D E R PER SATBEER SINGH GODARA, JM: These assessee’s twin appeals for assessment year 2017-18, arise against the National Faceless Appeal Centre (NFAC), Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1067446767(1), in case no. NFAC/2016- 17/10300461; and DIN and order no. ITBA/NFAC/S/250/2024-25/1067461723(1), in case no. NFAC/2016-17/10321745, both dated 08.08.2024, in proceedings u/s 144 & 272A(1)(d) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’, respectively. 2 ITA nos. 4240 & 4245/Del/2024 Both these appeals are taken up together for hearing for the sake of convenience and brevity. 2. It emerges during the course of hearing that the learned lower appellate authority has refused to condone 681 days’ delay in filing of the assessee’s lower appeal instituted on 01.03.2024 against the assessment order herein passed on 19.12.2019. The same admittedly includes Covid-19 pandemic period as well from 21.3.2020 to 28.02.2022 which has already been directed to be excluded. Faced with this situation, learned counsel also invited tribunal’s attention to the assessee’s condonation averments filed in the lower appellate proceedings explaining the delay beyond her control. I accordingly quote Collector Land Acquisition v. Mst. Katiji & another (1987) 167 ITR 471 (SC), to condone the impugned delay in filing the lower appeal. 3. Learned counsel invites the tribunal’s attention to the assessee’s quantum ITA 4245/Del/2024 wherein both the lower authorities have added her cash deposit of Rs. 13,04,300/- during demonetization as unexplained u/s 69A read with section 115BBE of the Act. He next refers to both the learned lower authorities in respect of ex parte findings that it was on account of the assessee’s change in address that she could not plead and prove all the relevant facts. Coming to the source of the assessee’s cash deposit, he has filed her registration under the Mumbai Shops and Establishment Act, 1948 to buttress the point that she is engaged in mobile and money transfer business; and, therefore, these cash deposits are her regular business receipts only. 3 ITA nos. 4240 & 4245/Del/2024 4. The Revenue, on the other hand, has strongly supported the impugned addition that it was assessee’s responsibility only to prove the source of cash deposits before the lower authorities. 5. I have given my thoughtful consideration to the foregoing rival stands and see no reason to accept the assessee’s stand in entirety. This is for the precise reason that all that she has filed a copy of her registration as engaged in mobile and money transfer business. She has failed to plead and prove the same by filing supporting evidence indicating the cash deposits as her business receipts in light of her cash flow statement. The fact also remains that once she is already registered under the “Shops Act” carrying out regular business activities, the prima facie inference which can be drawn in the given facts is that cash deposits are her business sales. Be that as it may, the tribunal deems it appropriate in the larger interest of justice to restrict the impugned addition to a lump sum addition of Rs. 6,00,000/- only with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs. 7,04,300/- in other words. Necessary computation shall follow as per law. Her instant quantum appeal ITA 4245/Del/2024 is partly allowed. 6. So far as the assessee’s assessment u/s 115BBE is concerned, as per hon’ble Madras high court in Smile Micro Finance Co. Ltd. v. ACIT [WP(MD) no. 2078/2020 & 1742/2020 dated 19.11.2024], section 115BBE of the Act is applicable only from 01.04.2017, whereas the impugned assessment year in the instant appeal is 2017-18. The assessee shall accordingly be assessed under the normal provisions. 7. Coming to the assessee’s penalty appeal ITA 4240/Del/2024, learned counsel has explained the assessee’s non-appearance to various communication 4 ITA nos. 4240 & 4245/Del/2024 gaps and change in address which has not been rebutted from the department’s side. The impugned section 272A(1)(d) penalty of Rs. 10,000/- in question is deleted and her latter appeal ITA 4240/Del/2024 is allowed in very terms. 8. These assessee’s appeals - ITA 4245/Del/2024 is partly allowed and ITA 4240/Del/2024 is allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in open court on 22.01.2025. Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "