NIKULBHAI PATEL,BHARUCH NARMADA V. THE ASSESSING OFFICER, ITO, WARD 2(5), BHARUCH

ITA 212/SRT/2024

AI Insights

This case involves an appeal by Nikulbhai Patel against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which confirmed the addition of Rs. 10,79,400 as unexplained income for the assessment year 2011-12. The addition was initially made by the Assessing Officer following the discovery of a substantial cash deposit in the assessee's bank account, which the assessee failed to satisfactorily explain despite multiple opportunities. The CIT(A) dismissed the appeal due to the assessee's non-compliance and failure to provide documentary evidence to substantiate his claims of agricultural income. The ITAT found that the CIT(A) had not adequately considered the evidences provided by the assessee and thus restored the matter for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708759 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY UKE
• Assessee Lawyers: KRUTARTH DESAI
• Keywords: Condonation of delay; Set aside; Source of fund; Reason to believe
• Section: 148; 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT (HYBRID HEARING) BEFORE SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER I.T.A. No. 212/SRT/2024 (Assessment Year: 2011-12) Nikulbhai Patel, 145, Patel Faliyua, Rajuwadiya Nandod, Narmada-393140 Vs. The Assessing Officer, Income Tax Officer, Ward-2(5), Bharuch [PAN No.AXRPP7346J] (Appellant) .. (Respondent) Appellant by : Shri Krutarth Desai, AR Respondent by: Shri Ajay Uke, Sr. DR Date of Hearing 08.07.2025 Date of Pronouncement 18.07.2025 O R D E R PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 25.11.2022 passed for A.Y. 2011-12. 2. At the outset, we observe that the appeal is time barred by 396 days. The assessee filed an application for condonation of delay alongwith Affidavit dated 22.02.2024, wherein the assessee stated that the assessee is not well educated and is not well-versed about the income tax matters. Therefore, the assessee did not receive any email or SMS from the Department and the assessee was not aware about the passing of CIT’s order and the tax consultant of the assessee also did not inform the assessee about ITA No.212/Srt/2024 Nikulbhai Patel vs. ITO Asst. Year – 2011-12 - 2– the order passed by Ld. CIT(A) as well. It was as a result of aforesaid reasons that there was a delay of 396 days in filing of the present appeal. The Counsel for the assessee submitted that there was no mala fide intention in the delay in filing of the appeal before Hon’ble ITAT and hence the same may kindly be condoned. Looking into the instant facts and the reasons cited by the assessee for the delay of 396 days in the filing of the present appeal, in the interest of justice, the delay in filing of the present appeal is hereby condoned. 3. The assessee has raised the following grounds of appeal: “1. In the facts and circumstances of the case, the learned assessing officer has erred in make an addition of Rs. 10,79,400/- without having any foundational facts which leads to reason to believe that income has escaped assessment. It is the settled position of law that only cash deposit is not the ground of initiating assessment as the same is nothing but the inquiry by the learned assessing officer and therefore, notice issued under section 148 deserves to be quashed and set aside. 2. In the facts and circumstances of the case, the learned assessing officer has erred in invoking provisions of section 69A of the act without having regard to the fact that no income could have been earned without incurring expenses. The learned assessing officer has completely disregarded the debit side of the bank statement and made addition which reflects the complete non application of mind by the learned assessing officer and therefore, the addition deserves to be quashed and set aside. 3. In the facts and circumstances of the case, the appellant has made detailed submission along with documentary evidences to show that the appellant is having only agricultural income and not having any other sources of income. The learned assessing officer has passed the order under section 143(3) r w s 147 of the act which reflects pre-determined state of mind of the learned assessing officer and therefore, the addition deserves to be quashed and set aside. 4. The appellant craves for leave to add or amend or alter any of the grounds of appeal.” 4. The brief facts of the case are that the assessee is an individual engaged in agricultural activities. During the year under consideration, Assessing Officer found that cash of Rs. 10,79,400/- was deposited in the bank account of the assessee. The Assessing Officer initiated re-assessment proceedings ITA No.212/Srt/2024 Nikulbhai Patel vs. ITO Asst. Year – 2011-12 - 3– under Section 148 of the Act. The assessee had not filed return of income for the assessment year under consideration. However, despite issuance of several notices of hearing, the assessee did not submit details as called for and no proof with regards to sources of funds deposited / credited in the savings bank account of the assessee was submitted. The Assessing Officer observed that the assessee has simply submitted that the assessee was engaged in sugarcane agriculture farming and had primarily supplied sugarcane to Narmadakhand Sugarcane Manufacturing Unit. The assessee had furnished ledger account of Narmadakhand Sugarcane Manufacturing Unit to demonstrate that it is engaged in sale of sugarcane to the said entity. The Assessing Officer noted that the assessee had only submitted copy of land holding documents i.e. 7/12 extracts and has furnished a letter of Narmadakhand stating that it had made payment of Rs. 2,97,181/- to the assessee’s father towards sale of sugarcane. However, the mode of receipt of the said amount was not mentioned in the said letter. Accordingly, the Assessing Officer was of the view that the assessee was unable to furnish the source of deposit of funds in his bank account amounting to Rs. 10,79,400/- and same was added as unexplained income of the assessee. 5. In appeal, Ld. CIT(A) dismissed the appeal of the assessee on account of non-appearance with the following observations: “5.1 During the appellate proceedings, the appellant was provided many opportunities as enumerated above. The appellant, for the reasons best known to him has remained non-compliant. No material facts have been brought on record to rebut the finding of the AO. There remains no doubt that statute has cast upon the appellant duty to explain the source of cash deposits for the assessment year under consideration but in the instant case appellant has failed to discharge the above onus, Assessee had made the submission during the assessment proceedings but as per order no satisfactory, documentary evidences were submitted to corroborate its claim that the source of cash was its agriculture income. Even during the appellate proceedings, ITA No.212/Srt/2024 Nikulbhai Patel vs. ITO Asst. Year – 2011-12 - 4– appellant failed to brought on record any documentary evidence to substantiate its claim. Hence I have no reason to interfere in the findings of the AO. 5.2 Considering the above factual matrix of the case, I am of the considered view despite being given ample opportunities during appellate proceedings, appellant failed to offer any satisfactory explanation about the nature and source of the cash deposit amounting to Rs.10,79,400/- in bank account. Accordingly, the addition of Rs.10,79,400/- is confirmed. Therefore these grounds of appeal are dismissed.” 6. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A). Before us, the Counsel for the assessee submitted that the assessee had furnished substantial information to demonstrate sale of sugarcane to M/s. Narmadakhand Sugarcane Manufacturing Unit. The assessee was primarily engaged in sale of sugarcane to M/s. Narmadakhand Sugarcane Manufacturing Unit and in support of this, a letter had also been submitted from the said concern to the Assessing Officer to demonstrate that M/s. Narmadakhand Sugarcane Manufacturing Unit had in fact made payment to the assessee’s father towards sale of sugarcane. Further, the assessee had also furnished ledger account of M/s. Narmadakhand Sugarcane Manufacturing Unit for the records of the Tax Authorities. In addition, the assesee had also furnished 7/12 extracts to demonstrate that assessee is in possession of substantial land holdings on which sugarcane produce was being grown. However, in appellate proceedings, Ld. CIT(A) dismissed the appeal of the assessee, without considering the evidences placed on record and without discussing the various grounds of appeal raised by the assessee. The appeal of the assessee was dismissed only on account of non-appearance, without discussing the merits of the evidences placed on record by the assessee. ITA No.212/Srt/2024 Nikulbhai Patel vs. ITO Asst. Year – 2011-12 - 5– 7. On going through the facts of the case, and looking into the nature of additions sustained in the hands of the assessee, in the interest of justice, the matter is hereby directed to be restored to the file of Ld. CIT(A) for de-novo consideration, after giving due opportunity of hearing to the assessee. However, we make it clear that in case there is any further non-compliance on the part of the assessee, in response to notices issued by Ld. CIT(A), then Ld. CIT(A) would be at liberty to pass appropriate orders, on the basis of material available on record, in accordance with law. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced under proviso to Rule 34 of ITAT Rules, 1963 on 18/07/2025 Sd/- Sd/- (BIJAYANANDA PRUSETH) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 18/07/2025 TANMAY, Sr. PS TRUE COPY आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ(अपील) / The CIT(A)- 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, सूरत / DR, ITAT, Surat 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, सूरत/ ITAT, Surat 1. Date of dictation 15.07.2025 2. Date on which the typed draft is placed before the Dictating Member 16.07.2025 3. Other Member………………… 4. Date on which the approved draft comes to the Sr.P.S./P.S 17.07.2025 5. Date on which the fair order is placed before the Dictating Member for pronouncement 18.07.2025 6. Date on which the fair order comes back to the Sr.P.S./P.S 18.07.2025 7. Date on which the file goes to the Bench Clerk 18.07.2025 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Dispatch of the Order…………………………………… "