RAJESH KUMAR,MIRZAPUR V. .NFAC, DELHI

ITA 143/ALLD/2024

AI Insights

The case involves an appeal by Rajesh Kumar against the order of the ld. CIT(A), NFAC, which was dismissed in limine due to a delay in filing the appeal. The delay was attributed to the assessee's serious illness. The primary issue in the appeal was the addition of Rs.1,53,13,406 as unexplained income under sections 69A and 115BBE of the Income Tax Act, 1961. The AO had initially issued notices under section 148 due to the use of two PAN numbers by the assessee and subsequently added the amounts after finding unexplained credits in the bank accounts. The CIT(A) dismissed the appeal due to the assessee's failure to adequately explain the delay in filing. The Tribunal, considering the assessee's health issues and the complexities of the case, restored the matter to the AO for a detailed examination of the evidence and proper assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 30333 (ITAT-ALLAHABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: A.K. SINGH
• Assessee Lawyers: PRAVEEN GODBOLE
• Section: 147; 250; 69A; 234B

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH, ALLAHABAD BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.143/ALLD/2024 A.Y. 2017-18 Rajesh Kumar, Tarkapur, Mirzapur-231001 vs. NFAC, Delhi PAN:AOOPK0542B (Appellant) (Respondent) Assessee by: Sh. Praveen Godbole, C.A. Revenue by: Sh. A.K. Singh, Sr. DR Date of hearing: 25.10.2024 Date of pronouncement: 27.12.2024 O R D E R PER NIKHIL CHOUDHARY, A.M.: This is an appeal against the order of the ld. CIT(A), NFAC under section 250 of the Act, 1961 passed on 7.03.2024. The grounds of appeal preferred are as under:- “1. That in any view of the matter assessment made on income of Rs.1,53,13,406/ u/s 147 r.w.s. 144B is highly unjustified. 2. That in any view of the matter proceeding u/s 147 was initiated is not correct as there was no proper satisfaction nor information with the assessing officer that assessee has escaped assessment hence the entire proceeding is bad in law. 3. That in any view of the matter addition of Rs. 1,53, 13,406/- (1,36,16,605/- + 16,96,801/-) as added us/ 69A r.w.s. 115BBE of the Act by alleging unexplained money by the assessing as per Para 8 of the assessment order is highly unjustified. 4. That in any view of the matter the assessing officer was wrong in adding only credit entries in bank account without considering the debit entries when the law is settled that document should be considered as whole and not a piece- meal hence the addition made is highly unjustified. ITA No.143/Alld/2024 A.Y. 2017-18 Rajesh Kumar 2 5. That in any view of the matter the finding and observation of the assessing officer with regard to addition of Rs. 1,53,13,406/- as per Para 8 of the Assessment order are incorrect and contrary to the actual facts of the case. 6. That in any view of the matter during assessment proceeding assessee submitted copy of balance sheet along with details of payment and other documentary evidence but no cognizance was given to the details filed and assessing officer simply made addition without going through the facts of the case which action is highly unjustified. 7. That in any view of the matter interest as charge u/s 234A, 234B and 234C is highly unjustified. 8. That in any view of the matter the assessee reserves his right to take any fresh ground of appeal before hearing of the appeal.” 2. It is observed that the appeal is late by around four months and twelve days. The assessee has filed a condonation petition that the reason for the delay was on account of the fact that the assessee was seriously ill for a long time with acute breathlessness and other problems and was undergoing treatment at Medanta Hospital, Delhi due to which he could not contact his counsel. It was only after he recovered, that he got the appeal prepared and he filed the same. The delay in the filing of the appeal was on account of such unavoidable circumstances, and it was therefore prayed that the appeal may kindly be admitted. An affidavit was also filed which stated that the assessee was on Oxygen support due to acute breathlessness and under treatment at Medanta, Delhi and the affidavit was accompanied by a medical certificate issued by a Medical Officer of Medanta Hospital, Delhi dated 28.07.2024. After considering the contents of the petition, affidavit and medical certificate, the appeal is admitted for consideration. 3. The facts of the case are that the ld. AO observed that the assessee was having two PAN numbers. He further observed, that while the assessee was using one PAN number to file returns, there was another PAN number being used in the bank. He, therefore, came to a conclusion that the bank account linked to the other ITA No.143/Alld/2024 A.Y. 2017-18 Rajesh Kumar 3 PAN number that was undisclosed and the credits in the same were unexplained income and he, accordingly issued notices to the assessee to furnish a return under section 148. The ld. AO records that the assessee made compliance to his various notices on 7.03.2022 but also states that the he did not furnish the necessary information as required in the notices under section 142(1). The ld. AO points out, that he subsequently issued notices to the assessee pointing out that the assessee had not furnished the complete details but the assessee did not make compliance. The ld. AO, therefore, observed that the assessee had only disclosed one bank account in his income tax returns maintained with M/s Canara Bank but had not disclosed another account,which had been mapped to another PAN in the name of the assessee and in which, the cash deposits to the extent of Rs.21,40,000/-, had been made in the demonetization period. The ld. AO, thereafter, made enquiries with the bank and found that the assessee was maintaining three accounts with the said bank which were transferring amounts to one another. Upon going through the three bank accounts numbering 0599, 0166 and 0471, he found that there were total credits of Rs.2,23,12,806/- in these accounts and total debits of Rs.2,36,19,458/- from these accounts. The total amount of cash deposits in these accounts were Rs.26,41,500/- during the demonetization period and Rs.1,36,16,605/- in the complete financial year. The ld. AO inferred that the credits in these three bank accounts were over and above the receipts declared by the assessee in his ITR. He, therefore, added back the cash deposit of Rs.1,36,16,605/- made in these three accounts over the course of the financial year and credits of Rs.16,96,801/-, computed by him and brought the same to tax under section 69A of the Income Tax Act, 1961. 4. Aggrieved with the said additions, the assessee went in appeal before the ld. CIT(A). However, this appeal was filed late and the ld. CIT(A) observed that the ITA No.143/Alld/2024 A.Y. 2017-18 Rajesh Kumar 4 assessee had stated in Form No.35 that the demand notice had been served nearly three and a half months after the appeal order, but had failed to prove the same. He, therefore, held that the assessee was bound to explain the delay of 105 days in the filing of the appeal and he observed that in Form No. 35, the assessee had denied that there was any delay in the filing of the appeal. The ld. CIT(A), thereafter, relying upon various case laws, pointed out that the assessee had failed to give sufficient reasons for the delay in the filing of the appeal. He, therefore, refused to condone the delay of 105 days and dismissed the appeal in limine. The assessee is aggrieved with the summary dismissal of his appeal by the ld. CIT(A) and has accordingly come in appeal before us. 5. Shri. Praveen Godbole, C.A. (hereinafter referred to as the ld. AR) appearing on behalf of the assessee, submitted that before both the lower authorities compliance could not be made owing to the illness of the assessee and it was for this reason that ex parte assessment was framed. It was submitted that the assessee had pointed out before the ld. CIT(A) in the appeal memo itself, that the bank account was linked with a PAN number that was lost and therefore, the assessee applied for a duplicate PAN and was allotted a duplicate PAN number. Therefore, he declared his income under his new PAN, but the deposits in the bank account had been duly disclosed in the returns. It was submitted that earlier, the notice had been issued against the PAN number linked to the bank account and it was only when the assessee had submitted that this bank account had been disclosed and reconciled and considered in the return filed with PAN number AOOPK0542B, that the Department accepted his version of the facts and dropped the earlier proceedings initiated against PAN number AMJPK3096K. Only thereafter, action under section 147 had been initiated against the assessee on the present PAN. It was submitted that in compliance to the notice under section 142(1), the assessee had submitted ITA No.143/Alld/2024 A.Y. 2017-18 Rajesh Kumar 5 the details and also enclosed copy of balance-sheet as well as the audit report showing that the cash deposit was made from definite sources and accounted for in the books of accounts. However, without providing opportunity for explanation, the ld. AO had straightway added the amount back. While doing so, the ld. AO had only added back the credit entries without considering the debit entries. The bank account should have been considered as a whole, but a one side addition had been made. It was, therefore, submitted that the assessee may kindly be given an opportunity to explain his case properly in view of the fact that his ill health had prevented him from making compliance earlier. 6. On the other hand, Shri. A.K. Singh, Sr. DR (hereinafter referred to as the ‘ld. Sr. DR’) appearing on behalf of the Revenue, submitted that the maintenance of two PAN numbers caused suspicion with regard to the notice of the assessee and the failure to comply had resulted in the addition. Therefore, if the Tribunal in its wisdom decided to restore the matter back to the file of the ld. AO or the ld. CIT(A), a direction may be given to the assessee, to make compliance failing which, it should be presumed that the assessee had nothing to submit in this regard. 7. We have duly considered the facts and circumstances of the case. We observe that the assessee has been handicapped in representing his case before the lower authorities on account of his illness. We also observe that the earlier proceedings under section 147, initiated in respect of PAN number AMJPK3096K had been dropped once the assessee had been able to satisfy the Department that his real PAN number was AOOPK0542B and that the bank transactions in question, had been disclosed against the said PAN number. We, however, observe that this re- conciliation has not been furnished before the ld. AO, which led the ld. AO to conclude that the said transactions were unexplained. We, therefore, restore the matter back to the file of the ld. AO, with a direction to the assessee to produce the ITA No.143/Alld/2024 A.Y. 2017-18 Rajesh Kumar 6 necessary details before the ld. AO, to satisfy him that the transactions in the bank accounts linked to PAN number AMJPK3096K were duly disclosed in the returns filed by the assessee linked to PAN number AOOPK0542B, which the assessee has himself pointed out is his active PAN number. We also direct the ld. AO to duly consider the said submissions and evidences presented and thereafter, do a fresh assessment after consideration of such evidences. As the matter has been restored back to the file of the ld. AO for a fresh assessment, the appeal of the assessee is held to be allowed for statistical purposes. 8. In the result, the appeal is allowed for statistical purposes. Orders pronounced in open court on 27.12.2024 at Allahabad U.P. Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHIL CHOUDHARY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27/12/2024 Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CIT DR , ITAT, 4. CIT, 5. The CIT(A) By order Sr. P.S. "