JASMER SINGH,NARAINGARH, AMBALA V. ITO, WARD-2, AMBALA

ITA 967/CHANDI/2025

AI Insights

The case involves Jasmer Singh, an individual pensioner and agriculturist, who did not file a return of income for the assessment year 2017-18. He was assessed under section 144 of the Income Tax Act, 1961, based on unexplained cash deposits totaling Rs.11,98,000 during the demonetization period. The Assessing Officer (AO) rejected the explanation provided by the assessee regarding the source of these deposits, treating the amount as unexplained money under section 69A, along with additional incomes from commission and interest. The CIT(A) dismissed the appeal due to non-payment of advance tax, without considering the merits of the case. The Tribunal found that the CIT(A) had not exercised discretion under the proviso to section 249(4)(b) to exempt the appellant from pre-deposit, which led to the setting aside of the CIT(A)'s order and remanding the case for a fresh decision on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779739 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 31-07-2025
• Other Referred Cases: Sumati Dayal v. CIT (214 ITR 801, SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: ANKIT DHIMAN
• Keywords: Set aside; Principle of natural justice
• Section: 144; 142(1)

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “ए” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी क ृणवȶ सहाय, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA No. 967/Chd/2025 िनधाŊरण वषŊ / Assessment Year : 2017-18 Jasmer Singh S/o Janak Singh VPO Pathrehri, Teh: Naraingarh Dist: Ambala- 134203- Haryana बनाम The ITO Ward-2, Ambala Haryana ˕ायी लेखा सं./PAN NO: AJBPS6796F अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Shri Ankit Dhiman, Advocate राजˢ की ओर से/ Revenue by : Shri Vivek Vardhan, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 08/10/2025 उदघोषणा की तारीख/Date of Pronouncement : 15/10/2025 आदेश/Order PER LALIET KUMAR, J.M: This appeal by the assessee is directed against the order of the CIT(A), NFAC, Delhi dated 28.12.2023, confirming the ex-parte assessment framed u/s 144 of the Income Tax Act, 1961 for the A.Y. 2017–18. 2. Briefly, the facts of the case are that the assessee, an individual pensioner and agriculturist, did not file return of income for the relevant assessment year. Based on information of cash deposits aggregating to Rs.11,98,000/- during the demonetization period (09.11.2016 to 31.12.2016) in three bank accounts (SBI, Axis Bank, and HDFC Bank), proceedings u/s 142(1) were initiated. 2.1 The Assessing Officer noted that despite several statutory notices, the assessee failed to produce supporting documentary evidence. The assessee explained that cash deposits were out of earlier withdrawals of Rs.15,35,000/- made in January–February 2016 intended for purchase of agricultural land which did not materialize. 2.2 The AO rejected the explanation observing that the withdrawals were nearly 10 months prior to the deposits, holding that such long retention of cash was Printed from counselvise.com 2 improbable. Accordingly, the AO treated the entire sum of Rs.11,98,000/- as unexplained money u/s 69A, in addition to adding Rs.15,000/- as commission income from “Golden Trust Financial Services Ltd.” and interest income of Rs.6,577/-. The total income was assessed at Rs.14,10,968/- and taxed u/s 115BBE 3. Against the order of the AO the assessee preferred appeal before the CIT(A), NFAC, but did not file the return of income nor deposit any amount equal to advance tax payable. 4. The CIT(A), after issuing notice u/s 249(4)(b) requiring proof of payment of advance tax, recorded that the assessee neither responded to the notice nor deposited the required amount. Citing the mandatory condition prescribed under Section 249(4)(b), the CIT(A) held that where no return is filed, the appeal cannot be admitted unless an amount equal to the advance tax payable has been paid. As the assessee failed to comply, the CIT(A) dismissed the appeal as not maintainable/infructuous without going into the merits 5. Aggrieved by the order of the Ld. CIT(A), the ssessee has filed the present appeal before the Tribunal. 6. During the course of hearing Ld. AR contended that:  The assessee is a small agriculturist and pensioner, whose income is below the taxable limit.  Cash deposits were duly explained as arising from earlier withdrawals for proposed land purchase; hence, the source stands explained.  The CIT(A) dismissed the appeal mechanically without affording opportunity to cure procedural defects or without exercising discretion under the proviso to Section 249(4)(b) which empowers the authority to exempt the appellant from pre-deposit on sufficient cause being shown.  Reliance was placed on judicial precedents that liberal interpretation must be adopted in the case of small taxpayers and that dismissal for technical default defeats the principles of natural justice.  It was submitted that lenient view be taken in the present case considering the age and occupation of the assessee 7. Per contra the Ld. DR submitted that: Printed from counselvise.com 3  The CIT(A)’s action is in conformity with the statutory mandate. The assessee neither filed return nor paid tax equivalent to advance tax; hence, appeal was rightly dismissed as non-maintainable.  On merits, the AO’s finding that the explanation of 10-month-old withdrawal was implausible is justified and supported by the decision in Sumati Dayal v. CIT (214 ITR 801, SC) which emphasizes on human probabilities. 8. We have carefully considered the rival submissions and perused the material on record including the orders of the lower authorities. It is an undisputed fact that the assessee did not file return of income and that no amount equal to advance tax was deposited before filing the appeal. Section 249(4)(b) clearly stipulates that where no return has been filed, the assessee must pay an amount equal to advance tax payable, unless exempted by the appellate authority for good and sufficient reasons. 8.1 In the present case, the CIT(A) has mechanically dismissed the appeal without considering the applicability of the proviso to Section 249(4)(b). The appellate authority was empowered to condone such a technical lapse upon sufficient cause being shown, particularly when the assessee is a retired individual and agriculturist with limited income. The dismissal without affording such opportunity renders the order non-speaking and violative of natural justice. 8.2 In these circumstances, we consider it just and proper to restore the matter to the file of the CIT(A) for deciding the appeal afresh on merits, after affording the assessee an opportunity to make good the procedural defect or to seek exemption under the proviso to Section 249(4)(b). Ld. CIT(A) is directed to decide the appeal on merit, after following the procedure Under Income Tax Act and rules framed there under after affording the opportunity of hearing to the assessee . 8.3 The order of the CIT(A) is set aside and the matter is remanded to his file for de novo adjudication. The CIT(A) shall:  The CIT(A) shall first consider the assessee’s plea under the proviso to section 249(4)(b) sympathetically and waive the pre-deposit condition, keeping in view the financial hardship and bona fide circumstances of the assessee, and thereafter decide the admission of the appeal accordingly. Printed from counselvise.com 4  Upon such admission, the CIT(A) shall adjudicate the appeal on merits, after affording due opportunity of hearing and by passing a reasoned and speaking order.  The assessee is directed to cooperate and file all necessary evidences including bank statements and proof of withdrawals. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 15/10/2025 Sd/- Sd/- क ृणवȶ सहाय लिलत क ुमार (KRINWANT SAHAY) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ /JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "