PYARELAL SHAW,KOLKATA V. I.T.O.,WARD-25(1), KOLKATA

ITA 2687/KOL/2024

AI Insights

The case involves Pyarelal Shaw, who appealed against the order of the Commissioner of Income Tax (Appeals) which upheld the addition of Rs. 58,23,000 to his income as unexplained cash credit for the assessment year 2017-18. The addition was initially made by the Assessing Officer following scrutiny of large cash deposits during the demonetisation period. Despite multiple opportunities, the assessee failed to provide satisfactory explanations or evidence regarding the source of these deposits. The Tribunal dismissed the appeal due to the absence of the assessee and any supporting documents, relying on the precedents that place the burden of proof on the assessee in such cases.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397178 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Other Referred Cases: Chuharmal v CIT (1988) 172 ITR 250 (SC), Smt Srilekha Banerjee and others v CIT, Bihar & Orissa, reported in 1964 AIR 697
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Condonation of delay; Business income; Unexplained cash credit; Principle of natural justice
• Section: 143(3); 234B

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'डी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA श्री दुव्वुरु आरएल रेड्डी, उपाध्यक्ष (कोलकाता क्षेत्र) एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI DUVVURU RL REDDY, VICE PRESIDENT (KZ) & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 2687/KOL/2024 Assessment Year: 2017-18 Pyarelal Shaw Vs. I.T.O., Ward-25(1), Kolkata (Appellant) (Respondent) PAN: BRAPS8926D Appearances: Assessee represented by : None. Department represented by : Sailen Samadder, Sr. D.R. Date of concluding the hearing : 08-April-2025 Date of pronouncing the order : 29-May-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2017-18 dated 08.02.2024, which has been passed against the assessment order u/s 143(3) r.w.s. 143(3) of the Act, dated 23.12.2019. Page | 2 I.T.A. No.: 2687/KOL/2024 Assessment Year: 2017-18 Pyarelal Shaw. Page 2 of 7 1.1. The Registry has informed that the appeal filed by the assessee is barred by limitation by 245 days. An affidavit seeking condonation of delay has been filed by the assessee stating as under: “I, Pyarelal Shaw, son of Suraj Shaw, aged about 57 years, by religion Hindu, residing at Santoshpur Bidhangarh, Kolkata - 700066, do hereby solemnly affirm and state as follows: 1. That I am the appellant in the above-mentioned case and am well- acquainted with the facts and circumstances related to the matter. 2. That the C.I.T. (A), NFAC has passed the appellate order for the assessment year 2017-18 on 08.02.2024, so the due date for filing the appeal before the Hon'ble ITAT was 08.04.2024. The appeal is filed on 30.12.2024, thereby 326 days of delay. I humbly submit that this delay was neither deliberate nor a consequence of any intentional lapse or negligence on my part. 3. That there was no communication received either by email, SMS, or any other mode from the Income Tax Department regarding the appellate order or proceedings that led to the second appeal. Despite the procedural requirements of the Department to notify me, no such intimation was received by me or my accountant. 4. That I had engaged a qualified accountant to monitor and handle all taxation-related compliances, including checking the income tax portal for updates or notices. However, the accountant inadvertently failed to periodically review the portal to check for updates concerning my tax matters. This unintentional omission resulted in me remaining unaware of the passing of the first appellate order and the subsequent deadline for filing the second appeal. 5. That the delay was discovered only after the appellant received advice from another tax consultant while reviewing the compliance status for a different financial year. Upon learning of the lapse, immediate steps were taken to file the appeal without further delay. 6. That upon realizing the oversight, I immediately took steps to initiate the appeal process and address the necessary documentation. However, by this time, the delay of 326 days had already inadvertently occurred. 7. That I make this affidavit in support of my application for condonation of STAR delay and state that the contents herein are true to the best of my knowledge and belief.” Page | 3 I.T.A. No.: 2687/KOL/2024 Assessment Year: 2017-18 Pyarelal Shaw. Page 3 of 7 1.2. Considering the affidavit for condonation of delay and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within the statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. For that on the facts and in the circumstances of the case, the order passed by the Hon'ble C.I.T.(A) dated 08.02.2024 is completely arbitrary, unjustified and illegal. 2. For that on the facts and in the circumstances of the case, the Hon'ble C.I.T.(A) erred in law and on facts in upholding the addition of Rs. 58,23,000/- as made by the Learned Assessing Officer in the assessment order framed u/s 143(3) of the Income Tax Act, 1961, purportedly on account of discrepancies in accounts and treating the same as unexplained cash credit under Section 69A of the said Act. Such an addition is wholly arbitrary, devoid of any factual or legal basis, unjustified, and contrary to the principles of natural justice, thereby rendering the order legally unsustainable. 3. For that on the facts and in the circumstances of the case the imposition of interest amounting to Rs. 14,91,897/- u/s 234B of the Income Tax Act, 1961, is wholly arbitrary, devoid of merit, and contrary to the principles of natural justice. It is submitted that such interest has been levied without proper appreciation of the factual matrix and legal provisions, rendering the action unsustainable in law and liable to be quashed. 4. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.” 3. None appeared on behalf of the assessee and therefore the appeal was heard with the assistance of the Ld. DR. 4. Brief facts of the case are that the assessee is an individual and had filed the return of income showing total income of Rs. 4,83,260/-. The case was selected for scrutiny on the ground of ‘large cash deposit made during the demonetisation period’. Statutory notices were issued but Page | 4 I.T.A. No.: 2687/KOL/2024 Assessment Year: 2017-18 Pyarelal Shaw. Page 4 of 7 the assessee did not give any reply in response to the show cause notice dated 9 December 2019. Accordingly, a final show cause notice was issued to the assessee regarding explanation with documentary evidence for the nature and source of cash deposited during the demonetisation period and it was conveyed to the assessee that this was the final opportunity. The assessee did not furnish any reply and therefore, the Ld. THE LD. AO, relying upon the case of Chuharmal v CIT (1988) 172 ITR 250 (SC) and also the decision of the Hon'ble Supreme Court in the case of Smt Srilekha Banerjee and others v CIT, Bihar & Orissa, reported in 1964 AIR 697 dated 27/03/1963, wherein it is held that where the assessee was unable to prove that in his normal business or otherwise, he was possessed of so much cash, it was held that the assessee started under a cloud and must dispel that cloud to the reasonable satisfaction of the assessing authorities, and that if we did not do so, then, the department was free to reject his exploration and to hold that the amount represented income from some undisclosed sources. It has been further held that it was not correct that the assessee was not required to prove anything, and that the burden was entirely upon the Department to prove that the amount received from the encashment of high denomination notes was income. The fact that there was money or conversion of notes is itself prima facie evidence against the assessee on which the Department can proceed in absence of good explanation. Accordingly, a sum of Rs. 58,23,000/- was added under section 69A of the Act as no proper explanation was filed regarding the source of deposit. 5. Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who vide the impugned order dated 08.02.2024, dismissed the appeal as despite notices having been Page | 5 I.T.A. No.: 2687/KOL/2024 Assessment Year: 2017-18 Pyarelal Shaw. Page 5 of 7 issued, the source of the deposits remained unclear and from unknown sources and the appellant failed to discharge the onus cast upon him. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 6. None appeared on behalf of the assessee and, therefore, the appeal was heard with the assistance of the Ld. DR. The Ld. DR submitted that there was no representation either before the Ld. AO or even before the Ld. CIT(A) and the source of deposits in the bank remained unexplained. It was submitted that the onus was upon the assessee to explain that the deposits were out of the business income and the required evidence were to be filed as the assessee claimed before the Ld. CIT(A) that he was trading in rice and the money deposited was out of the business income of the assesee. The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld. 7. We have considered the submissions made by the Ld. DR, gone through the facts of the case and perused the records. Despite having been given ample opportunities, the assessee failed to explain the source of cash deposited in the bank account and as there was no valid explanation, the addition was made, which has been confirmed by the Ld. CIT(A). Before us as well, neither any written submission has been filed nor anybody has appeared. Therefore, we find no reason to interfere with the order of the Ld. CIT(A) which is confirmed and the appeal of the assessee is dismissed. 8. In the result, the appeal filed by the assessee is dismissed. Page | 6 I.T.A. No.: 2687/KOL/2024 Assessment Year: 2017-18 Pyarelal Shaw. Page 6 of 7 Order pronounced in the open Court on 29th May, 2025. Sd/- Sd/- [Duvvuru RL Reddy] [Rakesh Mishra] Vice President (KZ) Accountant Member Dated: 29.05.2025 Bidhan (P.S.) Page | 7 I.T.A. No.: 2687/KOL/2024 Assessment Year: 2017-18 Pyarelal Shaw. Page 7 of 7 Copy of the order forwarded to: 1. Pyarelal Shaw, Santoshpur Bajarpara, Kolkata, West Bengal, 700066. 2. I.T.O., Ward-25(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "