ASHOKBHAI DURLABHBHAI DOMADIYA,SURAT V. INCOME TAX OFFICER,WARD 3(3)1, SURAT

ITA 781/SRT/2024

AI Insights

The case involves Ashokbhai Durlabhbhai Domadiya, who appealed against the order of the Commissioner of Income Tax (Appeals) confirming an addition of Rs. 39,04,084 to his income under section 69A of the Income Tax Act, 1961, for unexplained cash deposits. The assessee faced procedural challenges due to health issues and lack of proper guidance from his Chartered Accountant, leading to a delay in filing the appeal and non-compliance with earlier notices. The Tribunal acknowledged these circumstances and decided to remit the case back to the Assessing Officer for a fresh assessment, emphasizing the need to uphold the principles of natural justice.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26797 (ITAT-SURAT)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 20-07-2024
• Other Referred Cases: Smt. Srilekha Banerjee vs. CIT, 1964 AIR 697
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: VASANT P. KOTHARI
• Keywords: Condonation of delay; Set aside; Principle of natural justice
• Section: 69A

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.781/SRT/2024 Assessment Year: (2017-18) (Hybrid Hearing) Ashokbhai Durlabhbhai Domadiya, 119, Mamta Park Society, Part – 1, Nr. Kapodra Police Station, Varachha Road, Surat – 395006, Gujarat Vs. The ITO, Ward – 3(3)(1), Surat èथायीलेखासं./जीआइआरसं./PAN/GIR No: ACKPP5349M (Appellant) (Respondent) Appellant by Shri Vasant P. Kothari, CA Respondent by Shri Mukesh Jain, Sr. DR Date of Hearing 25/11/2024 Date of Pronouncement 25/11/2024 आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 02.08.2023 by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’] for the assessment year (AY) 2017-18. 2. The grounds of appeal raised by the assessee are as under: “1. The appellant respectfully submits that the delay of 172 days in filing of this appeal may be condoned as per the condonation petition along with Affidavit submitted in this appeal. 2. The learned CIT(A) has erred in law and on facts in confirming the addition of Rs.39,04,084/- u/s 69A of the Income Tax Act, 1961 being cash deposit in bank without considering the facts that the appellant has withdrawn substantial cash from the bank and having sufficient cash balance on the date of deposits. 2 ITA No.781/SRT/2024/AY.2017-18 Ashokbhai Duralabhbhai Domadiya 3. Your appellant craves leave to add, alter and / or amend the above grounds of appeal.” 3. The appeal filed by the assessee is barred by limitation by 174 days in terms of provisions of section 253(3) of the Act. The assessee has filed an affidavit giving reasons for delay in filing the appeal of appeal before the Tribunal. In the affidavit, the assessee stated that he is carrying on business of finance and cheque discounting. The assessment was taken up for scrutiny and various notices were issued on e-portal. He was unaware of such notices and could not comply with the notices. The learned CIT(A), NFAC has issued various notices on ITBA portal as stated in Para 5 of the CIT(A)'s order of which he was not aware of. He was under tremendous stress due to critical illness in the family. He was under bona fide impression that his Chartered Accountant is looking after his tax matters and he was not aware of the progress of appellate proceedings. His Chartered Accountant has not properly guided him to file the appeal and therefore, the delay of 174 days in filing of this appeal. The assessee also stated that there was no negligence or wilful attempt to avoid his case which was because of circumstances beyond his control. Hence, delay in filing the appeal by 174 had occurred. He has prayed to condone the delay and admit the appeal for hearing. 4. On the other hand, Learned Commissioner of Income-tax - Departmental Representative (Ld. CIT-DR) for the Revenue submitted that assessee has failed to explain sufficient cause for the delay; hence, delay should not be condoned. 5. We have heard both the parties on this preliminary issue of delay in filing appeal. In the affidavit, it is submitted that Chartered Accountant has not informed 3 ITA No.781/SRT/2024/AY.2017-18 Ashokbhai Duralabhbhai Domadiya the assessee about fate of appeal due to which, the delay of 174 days has occurred in filing appeal before the Tribunal. The assessee has filed medical papers of self and family members at pages 1 to 33 of the paper book. There was coronary angiography surgery of the assessee and his life was also undergoing treatment at Kiran Hospital. We note that assessee was not negligent but due to absence of legal advice of Chartered Accountant and medical related issue, there was delay in filing the present appeal. During the illness of self and his family, he was unable to pursue his case and there was lack of guidance and assistance to the assessee with respect to the procedure and formalities of filing appeal before the Tribunal. Hence, the reasons given in the affidavit for condonation of delay are reasonable and the same would constitute sufficient cause for the delay in filing this appeal. We, therefore, condone the delay and admit the appeal for hearing. 6. Brief facts of the case are that the assessee had filed his return of income for AY.2017-18 on 10.10.2017, declaring total income of Rs.9,61,040/-. The case was selected for scrutiny assessment. Various statutory and show cause notices were issued and served upon the assessee. The assessee had not filed any reply. The Assessing Officer (in short, ‘AO’) observed that assessee had deposited cash of Rs.39,48,500/- in his bank account No.6833590000000254 maintained with Laxmi Vilas Bank, Surat. Further, the AO observed that the same account was credited with Rs.4,02,15,137/- by cheque / RTGS / Transfer / Cash for which the assessee had not submitted any explanation. Thereafter, the assessee had filed a reply which is at para 5 of the assessment order. The AO rejected the reply of the assessee which are at para 6 of the assessment order. The Assessee has failed to 4 ITA No.781/SRT/2024/AY.2017-18 Ashokbhai Duralabhbhai Domadiya establish with evidence, the source of cash deposit during demonetization. In absence of explanation of sources of cash deposit of Rs.39,04,084 (i.e., 39,48,500 – 44,416) remains unexplained and constitutes income of the assessee for the year under consideration and the same was treated as unexplained money u/s 69A of the Act. The AO added Rs.39,04,084/- to the total income of the assessee u/s 69A of the Act. Total income was assessed at Rs.49,05,340/- as against returned income of Rs.9,61,040/-. 7. Aggrieved by the order of AO, the assessee filed this appeal before CIT(A). The CIT(A) issued seven notices fixing the hearing on 11.01.2021, 27.04.2022, 09.01.2023, 27.02.2023, 01.06.2023, 14.07.2023 and 25.10.2023. The assessee has not filed any reply in response to the other notices, therefore, the CIT(A) has decided the appeal on the basis of the materials available on record including the assessment order. He observed that assessee is not interested in prosecution of the appeal. The CIT(A) discussed all the grounds which are at page 4 to 6 of the appellate order. The CIT(A) observed that the appellant has not produced any material to explain the source of money during the appellate proceedings. Relying upon the decision in case of Smt. Srilekha Banerjee vs. CIT, 1964 AIR 697, where it was held that source of money not having been satisfactorily proved. Department was justified in holding it as assessee’s income from undisclosed source. The CIT(A) accordingly confirmed the addition and dismissed the appeal. 8. Aggrieved by the order of Ld. CIT(A), the assessee filed appeal before the Tribunal. The Learned Authorized Representative (Ld. AR) of the assessee submitted that the appellant was not given adequate opportunity of hearing by 5 ITA No.781/SRT/2024/AY.2017-18 Ashokbhai Duralabhbhai Domadiya the lower authorities. He further submitted that though the CIT(A) has issued 7 notices, the assessee remained non-compliant before the CIT(A) due to medical reasons and non-cooperation of his Chartered Accountant. The Ld. AR contended that assessee could not represent his case before CIT(A) and the order being an ex parte, stood vitiated on account of violation of principles of natural justice. The assessee could not appear before the CIT(A) due to circumstances beyond his control. Therefore, Ld. AR contended that one more opportunity should be given to the assessee in the interests of justice to plead his case before the AO. 9. On the other hand, Learned Senior Departmental Representative (Ld. Sr. DR) for the Revenue submitted that assessee was not serious and negligent during the appellate proceedings; hence, appeal of the assessee should be dismissed. 10. We have heard both the parties and perused the material available on record. The CIT(A) has also issued seven notices which is clear from para 5 of the appellate order. It is an undisputed fact that the assessee did not respond to the notices issued to him by the AO as well as CIT(A). Therefore, the CIT(A) has relied upon the order of the AO and dismissed the appeal of assessee without merit. The Ld. AR requested non-compliance before AO/CIT(A) was due to ill-health of family members and non-cooperation of the Chartered Accountant. He prayed that another opportunity may be granted to the assessee to submit all the required explanations and details and plead his case on merit. We are of the view that the principles of natural justice would call for giving another opportunity of hearing to the assessee. Accordingly, we hold that the interests of justice would be met in case the AO re-examines the entire issue afresh subject to payment of cost of 6 ITA No.781/SRT/2024/AY.2017-18 Ashokbhai Duralabhbhai Domadiya Rs.20,000/- (Rupees twenty thousand only) by the assessee to the credit of the “Gujarat High Court Legal Aid Authority” within 2 weeks from receipt of this order. Subject to payment of above cost, we set aside the order of CIT(A) and remit the matter back to the file of AO with a direction to pass de novo assessment order in accordance with law after granting adequate opportunity of hearing to the assessee. The assessee is directed to be more vigilant and diligent and to furnish all the details and explanations as needed by the AO by not seeking adjournment without valid reasons. With these directions, the grounds of appeal raised by the assessee are allowed for statistical purposes. 11. In the result, appeal of the assessee allowed for statistical purposes. Order is pronounced in the open court on 25/11/2024. Sd/- Sd/- (PAWAN SINGH) (BIJAYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER Surat Ǒदनांक/ Date: 25/11/2024 SAMANTA Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat "