FAEZA NISARAHMED SONIWALA,AHMEDABAD V. THE INCOME TAX OFFICER, WARD-5(3)(1) (PREVIOUSLY WARD-5(3)(5), AHMEDABAD

ITA 1518/AHD/2024

AI Insights

The case involves Faeza Nisarahmed Soniwala, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which confirmed the addition of Rs.16,28,500 as unexplained money under section 69A of the Income Tax Act, 1961, for the assessment year 2017-18. The addition was based on cash deposits made during the demonetization period, which the assessee failed to substantiate with adequate documentary evidence. The Tribunal noted that the lower authorities did not adequately consider the explanations and supporting details provided by the assessee and remanded the matter for fresh adjudication.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 33521 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-11-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 21-08-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARNIDAS V.S.
• Assessee Lawyers: VIPUL KHANDHAR
• Keywords: Salary income
• Section: 142(1); 143(2); 250; 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, ACCOUNTANT MEMBER AND MS. SUCHITRA R. KAMBLE, JUDICIAL MEMBER ITA No.1518/Ahd/2024 Assessment Year : 2017-18 Faeza Nisarahmed Soniwala A-605, M.B. Tower Opp: Cama Hotel Nr. Asopalav Flats Khanpur Ahmedabad 380 001. PAN : BXOPS 6918 K Vs. The ITO, Ward-5(3)(1) Ahmedabad. (Applicant) (Responent) Assessee by : Shri Vipul Khandhar, AR Revenue by : Shri Dharnidas V.S., Sr.DR सुनवाई क\t तारीख/Date of Hearing : 21/11/2024 घोषणा क\t तारीख /Date of Pronouncement: 22/11/2024 आदेश आदेश आदेश आदेश/O R D E R PER DR. BRR KUMAR, ACCOUNTANT MEMBER Present appeal has been filed by the assessee against order passed by the ld.Commissioner of Income (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “Ld.CIT(A)”] dated 20.10.2022 passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as \"the Act\" for short] for the Asst.Year 2017-18. 2. At the outset, it is noticed that the Registry notified that the appeal of the assessee is barred by limitation by 611 days. To explain the delay, the assessee has filed a delay condonation application in the form of an affidavit duly sworn by the assessee. In ITA No.1518/Ahd/2024 2 the application, the assessee has pleaded interalia that the impugned order passed by the ld.CIT(A), NFAC which was not within the knowledge of the assessee, and that being a layman, the assessee was not aware about the issuance of order Online, and it was only when the assessee received recovery letter, the assessee came to know about the passing of the impugned order, and in the meanwhile, the impugned delay of 611 days was caused. Based on the pleadings of the assessee, the ld.counsel for the assessee submitted that there is no deliberate negligence or mala fide on the part of the assessee to get the appeal filed before the Tribunal late by 611 days, because nothing would be gained by the assessee for late filing of the appeal before Tribunal. He accordingly prayed for condonation of the impugned delay of 611 days in filing the appeal before the Tribunal, and to adjudicate the appeal on merit. 3. On the other hand, the ld.DR objected to the condonation of delay, as the impugned being substantial. 4. We have carefully considered the submissions of both parties on the issue of condonation of delay. Though there is no convincing justification for the delay of 611 days in filing the appeal before the Tribunal, we are mindful of the principle of rendering substantial justice. In this context, we take a lenient view, particularly given that the assessee is a layperson with limited familiarity with the intricacies of the e-portal system. Delays of this nature may occur in such circumstances, especially in the absence of any mala fide intent or gross negligence on the part of the assessee. Therefore, in the interest of justice and to ensure that substantial justice prevails, we condone the delay of 611 days in filing ITA No.1518/Ahd/2024 3 the appeal before the Tribunal. The appeal shall now be disposed of on its merits. 5. Firstly, we note from the ground of appeal given in Form no.36 that the only grievance of the assessee is against the addition of Rs.16,28,500/- under section 69A as unexplained money and calculating the tax by provoking the provisions of section 115AABE of the Act. These deposits were made by the assessee in the bank during the demonetization period. 6. In the assessment framed under section 143(3), the ld.AO made an addition of Rs.16,28,500/- on the ground that the assessee did not file any submission and failed to substantiate the source of cash deposits with supporting documentary evidences. The ld.AO accordingly made the impugned addition under section 69A of the Act, which was confirmed by the ld.CIT(A), as the assessee did not comply with various notices issued during the appellate proceedings. Aggrieved, the assessee has come up in appeal before the Tribunal. 7. Before us, the assessee has filed a detailed submissions in the form of statement of facts, which reads as under: 1. The appellant Faeza Nisarahmed Soniwala is an individual assesse. The appellant is filing Income Tax returns regularly since last so many years. IT return for A.Y. 2017-18 was filed on 08/08/2017 vide e-ack. No. 162365240080817, showing net taxable income of Rs.1068180/-. The appellant has filed ITR-1. During the year under consideration, the appellant was having income from salary. 2. The appellant has deposited cash of Rs.1628500/- during the period of demonetisation in her bank account with standard chartered bank. Response on Income Tax portal during the period of demonetisation was filed by the appellant showing source of cash deposited by her during the demonetisation period in cash transaction 2016, Transaction No. 4418043902. 3. The appellant is having income from salary since last so many years and filing IT returns showing net taxable income of more than Rs.5 Lacs in last 7 years' return of income. Copy of ROI filed by the appellant of last 7 years were also submitted before the Assessing Officer. ITA No.1518/Ahd/2024 4 4. The appellant has made substantial cash withdrawal in last 5 years from her bank account from her income from salary. The details of cash withdrawal made by the appellant from 2013 to 2016 was also submitted during the course of assessment proceedings. Appellant has made cash withdrawal of more than Rs.12 Lacs during the period 2013 to 2016. 5. The appellant has explained the source of cash deposited in the bank and also substantiate the same by documentary evidences. 6. The case of the appellant was selected for limited scrutiny on the cash deposited during the demonetisation period and notice u/s. 143(2) was issued on 08/08/2018. Notice u/s. 142(1) of the IT Act was issued on 06/08/2019, 07/09/2019 and 15/11/20019. In response to the notices issued, the appellant has submitted copy of bank statement, Form No. 16 and details of cash withdrawal up to November. 2016, copy of bank passbook, statement etc. 7. Show cause notice dated 19/11/2019 was issued directing the appellant to submit reply on or before 23/11/2019. The appellant has approached to the consultant on 23/11/2019 to submit the reply in response to the show cause notice. Due to Saturday and Sunday on 23\" and 24th November, 2019, the consultant was not available in the office. When they tried to submit reply on 25/11/2019, the consultant found that assessment order dated 25/11/2019 is already passed by the Lrd. Assessing Officer therefore, no reply in response to the show cause notice was submitted. 8. The Lrd. Assessing Officer has made addition of Rs.1628500/- i.e. entire amount of cash deposited in the bank account u/s. 69A of the IT Act as unexplained money and calculated tax as per provision of section 115AABE of the IT Act. In fact the cash deposited by the appellant in the bank account are from legal source and same were very well explained by the appellant during the course of e-assessment proceedings. 9. The appellant is on the post of executive in corporate sector. Moreover, the appellant was in receipt of loan from parents. The said facts can also be reveals from the response filed by the appellant during the period of demonetisation. In spite of this fact and the documents and evidences submitted by the appellant showing bank passbook from F.Y. 2011 to 2017 the Lrd. AO has made addition without verifying the facts and merits of the case. 10. Being aggrieved with the said order, the appellant filed an appeal before the Commissioner (Appeal) of Income Tax, NFAC, Delhi. Afterwards, the Commissioner (Appeal) of Income Tax, NFAC, Delhi passed the order u/s 250 of IT Act, 1961 by way of rejecting the appeal of the appellant. 8. The main pleadings of the assessee were that the assessee is a salaried person and filing the IT returns for so many years; that the assessee had withdrawn substantial cash from his bank account ITA No.1518/Ahd/2024 5 during 2013 to 2016 amounting approx.. to Rs.12 lakhs; that the assessee did file copy of bank statement, Form No.16 and the details of cash withdrawal during the period before the lower authorities; that despite documentary evidences were filed before the authorities, and without verifying the same, the lower authorities made the impugned addition, which action is unjust and untenable and liable to be deleted. The assessee has also filed before us a paper book containing 110 pages, which also contained cash withdrawal details, Form no.16, bank statement taken from Union Bank and Standard Chartered Bank etc. to substantiate that the impugned deposits have been made out of the income from salary and savings. On the other hand, the ld.DR supported orders of the Revenue authorities. 9. We have considered the submissions of both parties and perused the orders passed by the Revenue authorities. We have also gone through the materials submitted by the assessee in the paper book. The Revenue's case rests on the plank that the impugned addition was made due to the assessee's failure to substantiate the sources of deposits with adequate documentary evidence. Conversely, the assessee contends that explanations, cash withdrawal details, Form No. 16, and bank statements were duly submitted to demonstrate that the deposits originated from known and legitimate sources. Undoubtedly, this contention has not been disputed by the Department before us. 10. On perusal of both the order of the Revenue authorities, we observe that the authorities below did not adequately consider the explanations and supporting details provided by the assessee to establish the genuineness of the bank deposits. In the interest of ITA No.1518/Ahd/2024 6 justice and to ensure a fair adjudication, we are of the view that the assessee should be afforded another opportunity to present its case. Accordingly, the matter is remanded to the file of the learned CIT(A) for fresh adjudication on merits. 11. The learned CIT(A) is directed to issue a fresh notice to the assessee and adjudicate the matter afresh, taking into account the materials and explanations submitted. The assessee is directed to comply with the notice issued by the learned CIT(A) and avoid seeking unwarranted adjournments to ensure expeditious disposal of the matter. 12. In the result, the appeal of the assessee is allowed for statistical purpose. Dictated on the Open Court, typed and pronounced on 22nd November, 2024. Copy of this order be given to the assessee. The Registry is directed to dispatch as per procedure. Sd/- Sd/- (SUCHITRA R. KAMBLE) JUDICIAL MEMBER (DR. BRR KUMAR) ACCOUNTANT MEMBER "