BASANT KUMAR GUPTA, BALRAMPUR,SURGUJA V. INCOME TAX OFFICER-1, AMBIKAPUR, AMBIKAPUR

ITA 31/RPR/2025

AI Insights

The case involves Basant Kumar Gupta, an individual engaged in the seasonal business of agricultural products and also earning interest from banks, who was assessed for the Assessment Year 2017-18. Gupta did not initially file his return, but was later scrutinized due to substantial cash deposits in his bank account during the demonetization period. The AO passed an order under section 144 of the Income Tax Act, treating Rs.59,83,454 as unexplained money under section 69A. Gupta's appeal to the CIT(A) was dismissed due to a delay of 123 days, which was not condoned. The ITAT found that the CIT(A) had not adequately considered Gupta's explanations and the delay in filing the appeal should be condoned, leading to the restoration of the case to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 106789 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: Pradeep Kumar Gupta vs ITO-1, Ambikapur
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: G.S. AGRAWAL
• Keywords: Condonation of delay; Set aside; Opportunity of being heard; Additional evidence; Principle of natural justice
• Section: 147; 144; 142(1); 250; 131; 133(6); 69A

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / ITA No: 31/RPR/2025 (िनधाŊरण वषŊ Assessment Year: 2017-18) Basant Kumar Gupta, Village- Dumarkhola, PO- Dawra, Distt. – Balrampur, Sur-497118, Surguja, C.G. V s Income Tax Office, Kharsiya Marg, Near Ambika Petrol Pump, Ambikapur, C.G. PAN: APVPG1179A (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Shri G. S. Agrawal, CA राजˢ की ओर से /Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 13.02.2025 घोषणा की तारीख/Date of Pronouncement : 28.02.2025 आदेश / O R D E R Per Arun Khodpia, AM: The aforesaid appeal of the assessee is directed against the order of Commissioner of Income Tax (Appeals), NFAC, Delhi, [in short “Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 (in short “the Act”), dated 14.11.2024 for the AY 2017-18, which in turn arises from the order of Income Tax officer, Ward-1, Ambikapur (in short “Ld. AO”), u/s 144 of the Income Tax Act dated 03.11.2019. 2 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur 2. The grounds of appeal raised by the assessee are as under: 1. That under the facts and the law, the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi erred in dismissing the Appeal observing that there was delay in filing of the Appeal and that the Appellant has not applied for condonation of delay. Prayed that observation of Ld. CIT (Appeals) is not correct as the Appellant in response to deficiency letter dated 04.03.2021 of Ld. CIT (Appeals), uploaded an application on 08.03.2021 explaining that the Assessment Order was not received, therefore, an application was filed before the Ld. Assessing Officer on 05.02.2020 and only upon receipt of Assessment Order the Appellant filed the Appeal on 04.03.2020 and thus there is no delay. Prayed that Order of Ld. CIT (Appeals) is against the facts and the law, prayed to delete the addition made by the Ld. AO at Rs.59,83,450/-. 2. That under the facts and the law, the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi further erred in not considering the application filed on 08.03.2021 wherein, as per reasons explained in Ground No. 1, it was explained that the Appeal was filed upon receipt of Assessment Order, and therefore, if it is considered delay, the same was preyed to be condoned. Prayed that the Order of Ld. CIT (Appeals) is not as per the law and the facts. The addition of Rs.59,83,450/- kindly be deleted. 3. That under the facts and the law, the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi further erred in not considering Written Submission filed along with various supportings on 15.11.2022 & 14.10.2024 wherein deposit into Bank was explained, wherein bank statement, an Affidavit, Land Revenue Records of appellant, papers related to Idea Cellular recharge business of Son viz Prakash Gupta, motor vehicle details, cash books etc. were filed. Prayed that assessment of income at Rs.59,83,450/- is arbitrary & be deleted. 4. That the Ld. CIT(A) also erred in considering all the deposits as income, he also erred in not considering explanation filed for impugned deposits inter-alia in One bank ale there were trading transactions of Rs.50,49,780/- which do not pertain to assessee but to his son Shri Prakash Gupta of his Idea Cellular Phone recharge business who also filed his ITR. Prayed to delete the addition of Rs.59,83,450/-. 5. That under the facts and the law, the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi erred in passing the Order without allowing opportunity to the Appellant. Prayed to delete the addition of Rs.59,83,450/-. 6. That under the facts and the law, the Ld. Commissioner of Income Tax(Appeals), NFAC, Delhi erred in not considering the ground that provisions of Sec. 115BBE are not applicable in the present case. 3 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur 3. Concisely stated, the assessee is an individual engaged in the seasonal business of agricultural products and has earned interest from the bank. Assessee’s son Shri Prakash Gupta is a distributor of Idea Cellular Limited and engaged in the business of mobile recharge at Dumarkhola, Dawra, which is located in Tribal and remote area of Balrampur District, 80 KM away from Ambikapur. For AY 2017-18, assessee had not filed his Return of Income, however, when a list of assessee’s was prepared by the Income Tax Department for the FY 2016-17, who had deposited substantial cash in their bank accounts during the demonetization period, on the basis of verification and data analysis of such information, name of the assessee is surfaced having deposited huge cash in his bank account, therefore, selected for scrutiny assessment. Accordingly, notice u/s 142(1) was issued on 02.02.2018, with a request to file a true and correct return of income for AY 2017-18, on or before 31.03.2018. However, no compliance was made by the assessee. Consequently, following the provisions of section 144(1)(b), Ld. AO resorted to the recourse available u/s 144 to pass an order on the basis of best judgment assessment. Further in absence of any compliance by the assessee during the assessment proceedings, the amount of Rs.59,83,454/- cash deposited by the assessee during the entire AY 2017-18, was treated as unexplained money within the meaning of section 69A of the Act and added to the income of the assessee, thereby the assessed income of the assessee has been determined at Rs.59,83,454/- . 4 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur 4. Aggrieved with the aforesaid addition by the Ld. AO, assessee preferred an appeal before the Ld. CIT(A), however, the appeal of assessee, being delayed by 123 days, thus, barred by limitation, has been dismissed by the Ld. CIT(A), treating the same as not maintainable in terms of provisions of section 249(2) r.w.s. 249(3) of the Act r.w.s. 5 of The Limitation Act. On dismissal of appeal by Ld. CIT(A), being dissatisfied, the assessee opted to exercise the next remedy available, to file an appeal before the ITAT, the same is, therefore, under consideration in the present case. 5. At the outset, Shri G. S. Agrawal, CA, Authorized Representative of the assessee (in short “Ld. AR”), submitted that the order passed by Ld. CIT(A) was an exparte order, wherein the facts of the assessee are not dealt with, but the same was dismissed only on account of delay in filing of the appeal by the assessee. On this issue, Ld. AR submitted that the assessee is a person of little means having no knowledge of Income Tax procedures and there might by certain lacks on part of the assessee, however, in the interest of justice, the real income of the assessee should only have been taxed in his hands. Further submitted that all the deposits in bank account of the assessee pertains to distributorship of Idea Cellular Limited for mobile recharge business, which is in the name of assessee’s son Shri Prakash Gupta, but the transactions are carried out in the assessee’s bank account for the reason that his son was not having any bank account in the 5 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur place of business i.e., at Dumarkhola, Davra. Ld. AR further submitted that, if the bank account of assessee is being examined which is placed before us at page no. 32-65 of the paper book, it shows that the amount deposited in cash are thereafter immediately transferred to Idea Cellular Limited, therefore, the inference drawn by the Ld. AO, that the said amounts credited / deposited in assessee bank account are unexplained money within the meaning of section 69A was totally misconceived and misplaced observation, as the amounts collected are transferred to Idea Cellular and all such transfers / debits are reflected in the bank statement of the assessee which are not taken into consideration by the Ld. AO. Ld. AR further described that even if the assessee was unable to put up an appearance before the Ld. AO, the Ld. AO was authorized to make necessary enquiries u/s 131 or u/s 133(6) by issuing summon to the bank wherein the assessee’s account was maintained or to Idea Cellular Limited so as to find out the true and fair income of the assessee. However, it is evident that no such exercise was considered to be conducted by the revenue authority, therefore, the conclusion drawn only on the basis of self-notion without giving a thoughtful deliberation to find the correct facts qua income of the assessee, the addition made was totally arbitrary, illegal and against the mandate of law. 6 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur 6. Ld. AR further submitted that the assessee had submitted the reasons for delay while filing of the appeal before the Ld. CIT(A) vide letter dated 04.03.2021, which was uploaded on 08.03.2021 on the ITBA portal (copy submitted before us at page no. 1 & 2 of the APB), but the same was not taken into consideration by the Ld. CIT(A) and have passed an exparte order. It was the contention that the observation of Ld. CIT(A) was totally wrong that the appellant has not responded during the appellate proceedings before the First Appellate Authority. Ld. AR further submitted that the assessee had made an application seeking copy of assessment order passed u/s 144 r.w.s. 147 dated 03.11.2019 on 20.11.2020, thereafter, the order was received by the assessee, therefore, the appeal was filed before the First Appellate Authority, within the prescribed time limitation, there was no delay in filing of the appeal before the Ld. CIT(A). 7. Ld. AR further drew our attention to page no. 8-11 of the assessee’s paper book and page no. 5-7 consisting therein copies of e-Proceedings Response Acknowledgement No. 604746021141024 and 804791881151122 dated 14.10.2024 and 15.11.2022 showing submissions during the First Appellate proceedings, therefore, the observations of Ld. CIT(A) that there were no submissions by the assessee before him, was totally bereft of substances. 7 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur 8. Based on aforesaid facts, it was the submission by Ld. AR that the substantial documents including request for condonation of delay substantiating sufficient cause for delay in filing of the appeal are not considered by the Ld. CIT(A) and had dismissed the appeal on account of delay was against the principle of natural justice and violation of mandate of law. Under such facts and circumstances, it was the prayer that the case of assessee may kindly be adjudicated on merits after considering all the factual aspect, which are placed before us. Ld. AR further placed his reliance on the order of SMC Bench of Raipur in the case of Pradeep Kumar Gupta vs ITO-1, Ambikapur in ITA No. 425/RPR/2024 dated 20.12.2024, wherein under identical facts and circumstances, findings of Tribunal are as under: 6. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 7. Shri G.S. Agrawal, Ld. Authorized Representative (for short 'AR') for the assessee, at the threshold of hearing, submitted that the assessee resides in a Naxalite hit area, viz. Village: Chando, Tehsil: Samri Kusmi. The Ld. A.R submitted that the assessee during the year had as a matter of self- employment taken up a dealership of selling mobile recharge coupons/SIM's of M/s Idea Cellular Pvt. Ltd. and used to cater to small retailers, local laborers, pan vendors etc. The Ld. AR submitted that the cash deposits in the bank account No.7002155306 held by the assessee with Chhattisgarh Rajya Gramin Bank, Branch: Ambikapur were the sale proceeds 8 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur of the recharge coupons/SIM's that were collected by him in the course of his aforesaid retail business for and on behalf of his principal, viz. M/s Idea Cellullar Pvt. Ltd. which, thereafter, was remitted by him to the latter. The Ld. AR to fortify his aforesaid contention had taken me through the aforementioned bank account, Page 2 to 17 of APB, which revealed that the cash deposits in the aforementioned bank account of the assessee (after being accumulated) were thereafter immediately transferred to M/s. Idea Cellular Pvt. Ltd. Elaborating further, the Ld. AR submitted that though the assessee being a small time businessman had wayback closed his aforesaid business and had not retained any documents which would substantiate his aforesaid claim, but a cursory perusal of the said bank account in itself revealed that the entire cash collections/deposits in the said bank account had thereafter found its way to the coffers of M/s. Idea Cellular Pvt. Ltd. Carrying his contention further, the Ld. AR submitted that though the A.O had accepted the aforesaid factual position for the pre-demonetization period i.e. 01.04.2016 to 08.11.2016 but without any reason had adopted an inconsistent approach and held the similarly placed cash deposits of Rs. 7.98 lacs (supra) made in the bank account during the demonetization/post- demonetization period i.e. 09.11.2016 to 31.03.2017 as the assessee's unexplained money u/s. 69A of the Act. Once again, the Ld. AR had taken me through the bank statement of the assessee, which fortified his claim that no adverse inferences were drawn regarding the similarly placed cash deposits made in the aforementioned bank account during the pre- demonetization period i.e. 01.04.2016 to 08.11.2016. 8. Per contra, Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. 9. I have given thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both the parties in the backdrop of the orders of the lower authorities. On scrutinizing the aforementioned bank account 9 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur No.7002155306 held by the assessee with Chhattisgarh Rajya Gramin Bank, Branch: Ambikapur, I find that there were cash deposits aggregating to Rs. 9,60,250/- during the pre-demonetization period i.e. 01.04.2016 to 08.11.2016 which under identical set of circumstances were transferred to M/s. Idea Cellular Pvt. Ltd. I am unable to comprehend that now when the A.O had accepted the aforesaid version of the assessee i.e. the cash deposits in the aforesaid bank account were the cash sale proceeds/collections of recharge coupons/SIM's that were remitted /transferred by him to M/s. Idea Cellular Pvt. Ltd., then as to why a different view had been adopted by him with respect to similarly placed cash deposits of Rs.7.98 lacs (supra) made during in his bank account during the demonetization/post-demonetization period i.e. 09.11.2016 to 31.03.2017. 10. Admittedly, it is a matter of fact borne from record that the assessee had not been able to substantiate his claim that the cash deposits of Rs.7.98 lacs (supra) made in his bank account during the demonetization/ post- demonetization period were sourced from the sale proceeds of recharge coupons/SIM's of M/s Idea Cellular Pvt. Ltd. on the basis of supporting documentary evidence but at the same time, I cannot remain oblivion of the fact that the position remains the same even during the pre-demonetization period. Also, I am of a firm conviction that the aforesaid claim of the assessee i.e. cash deposits in his bank account were the sale proceeds of recharge coupons/SIM's of M/s Idea Cellular Pvt. Ltd. can inescapably be gathered from a perusal of the bank account. The assessee's claim that the cash deposits in the bank account of the assesssee is thereafter followed by immediate transfer of the said amounts (after accumulation) to M/s Idea Cellular Pvt. Ltd. supports his claim that the said amounts were the cash sale proceeds of recharge coupons/SIM's is supported by the principle of preponderance of human probabilities as had been emphasized by the Hon'ble Apex Court in the case of 10 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur Sumati Dayal vs. CIT, 214 ITR 801 (SC), wherein the Hon'ble Apex Court had held as under: \"13. This, in our opinion, is a superficial approach to the problem. The matter has to be considered in the light of human probabilities. The Chairman of the Settlement Commission has emphasised that the appellant did possess the winning ticket which was surrendered to the Race Club and in return a crossed cheque was obtained. It is, in our view, a neutral circumstance, because if the appellant had purchased the winning ticket after the event she would be having the winning ticket with her which she could surrender to the Race Club. The observation by the Chairman of the Settlement Commission that \"fraudulent sale of winning ticket is not an usual practice but is very much of an unusual practice\" ignores the prevalent malpractice that was noticed by the District Taxes Enquiry Committee and the recommendations made by the said Committee which led to the amendment of the Act by the Finance Act of 1972 whereby the exemption from tax that was available in respect of winnings from lotteries, crossword puzzles, races, etc. was withdrawn. Similarly the observation by the Chairman that if it is alleged that these tickets were obtained through fraudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning ticket takes place in secret and direct evidence about such purchase would be rarely available. An inference about such a purchase has to be drawn on the basis of the circumstances available on the record. Having regard to the conduct of the appellant as disclosed in her sworn statement as well as other material on the record an inference could reasonably be drawn that the winning tickets were purchased by the appellant after the event. We are, therefore, unable to agree with the view of the Chairman in his dissenting opinion. In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim about the amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably and that the finding that the said amounts are income of the appellant from other sources is not based on evidence.\" 11 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur 11. The facts involved in the present case before me, wherein the cash deposits of Rs.7.98 lacs (supra) made in the bank account of the assessee during the demonetization and post-demonetization period are followed by transferring of amounts aggregating to Rs.9,10,088/- to M/s. Idea Cellular Pvt. Ltd., speaks for itself about the \"nature\" and \"source\" of the said cash deposits. I, thus, in terms of the aforesaid observations am of a firm conviction that the cash deposits of Rs.7.98 lacs (supra) made in the bank account of the assessee during the demonetization and post-demonetization period i.e. 09.11.2016 to 31.03.2017 were the cash sale proceeds of recharge coupon/SIM's which, thereafter, had been remitted/transferred by him to M/s. Idea Cellular Pvt. Ltd. Accordingly, I herein based on my aforesaid firm conviction vacate both the treating of the amount of Rs.7,98,500/- as the unexplained money of the assessee and the consequential addition made by the A.O. Thus, the Grounds of appeal Nos. 1 to 4 raised by the assessee are allowed in terms of the aforesaid observations. 8. Per contra, Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. 9. We have considered the rival submissions, perused the material available on record, including additional evidence furnished by the Ld. AR in support of various contentions raised before us and the decision relied upon. In present case, admittedly, the facts and circumstances leading the addition in the hands of assessee, are identical to the facts in the case of Pradeep Kumar Gupta vs ITO(supra), therefore, we find substance in the contention raised by the Ld. AR, 12 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur however, certain evidences which are furnished before us, are not submitted before the lower authorities at the assessment as well as appellate stage, therefore, could not be considered by them. In such a scenario, though, the instant case is squarely covered by the decision relied upon by the assessee. We find it appropriately to restore this matter back to the files of Ld. AO for the limited purpose, to adjudicate the issues raised in the present appeal, after considering the submissions, facts, explanations by the assessee during the set aside assessment proceedings. 10. Needless to say, reasonable opportunity of being heard shall be provided to the assessee in the set aside assessment proceedings. 11. Before parting with, adverting to the issue of delay involved in filing of appeal before the Ld. CIT(A), we may herein note that the delay of 123 days involved therein was substantiated by the Ld. AR by filing of an application seeking condonation of delay dated 04.03.2021, submitted on e-portal before the First Appellate Authority on 08.03.2021, however, the request of assessee was not considered and the delay was not condoned by the Ld. CIT(A) on his perception that there was no sufficient cause for which the delay was occasioned, accordingly, the appeal of assessee was dismissed as not maintainable. Be that as it may, as the issue of delay in filing of appeal and condonation thereof has to 13 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur be dealt with after the judgment of Hon’ble Apex Court in the case of Vidya Shankar Jaiswal Vs ITO, Ward-2, Ambikapur, in Special leave Petition (Civil) Nos. 26310-26311/2024 vide order dated 31.01.2025, had accorded a categorical direction that the condonation of delay ought to have been allowed by adopting justice oriented and liberal approach. Respectfully following the aforesaid guiding principle laid down by Hon’ble Apex Court, we direct to condone the delay in filing of the appeal before the Ld. CIT(A) in the present case. However, as the matter has already been directed to restore back to the file of Ld. AO, therefore, the issue regarding condonation of delay remains only for academic purposes. 12. In result, appeal filed by the assessee in ITA No. 31/RPR/2025 is partly allowed for statistical purposes. Order pronounced in the open court on 28/02/2025. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 28/02/2025 Vaibhav Shrivastav 14 ITA No.31/RPR/2025 Basant Kumar Gupta Vs. ITO, Ambikapur आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- Basant Kumar Gupta 2. ŮȑथŎ / The Respondent- ITO, Ambikapur 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाडŊ फाईल / Guard file. // सȑािपत Ůित True copy // "