SH. ABHAY KUMAR GODHA,JAIPUR V. ACIT, CIRCLE-1, JAIPUR, JAIPUR

ITA 546/JPR/2025

AI Insights

This case involves an appeal by Shri Abhay Kumar Godha against the order of the ld. CIT(A), Jaipur, which confirmed the addition of Rs.87,21,500 as unexplained cash deposit during the demonetization period under section 69A of the Income Tax Act, 1961. The CIT(A) also upheld the tax rate of 60% under section 115BBE, instead of the 30% claimed by the assessee, arguing that the section applied to transactions from 01.04.2017 onwards. The assessee contended that notices were not properly served, leading to non-compliance and the subsequent dismissal of his appeal. The ITAT, acknowledging the procedural error, restored the matter to the CIT(A) for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711599 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: SMILE Microfinance Ltd. Vs ACIT, Checkmate Services Pvt. Ltd. and others vs. CIT and others, Shivangi Steel (P.) Ltd. v. Assistant Commissioner of Income tax, Central Circle
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAURAV AWASTHI
• Assessee Lawyers: P.C. PARWAL
• Keywords: Condonation of delay; Additional evidence; Reasonable cause
• Section: 144; 142(1); 132

Judgement Text

"vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,’’B” JAIPUR Mk0 ,l- lhrky{eh]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihyla-@ITA No. 546/JPR/2025 fu/kZkj.ko\"kZ@AssessmentYear : 2017-18 Shri Abhay Kumar Godha 750, Achariyon Ka Rasta, Kishan Pole Bazar Jaipur – 303 003 (Raj) cuke Vs. The ACIT Circle-1 Jaipur LFkk;hys[kk la-@thvkbZvkjla-@PAN/GIR No.: AAPPG 4721K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby :Shri P.C. Parwal, CA jktLo dh vksjls@Revenue by: Shri Gaurav Awasthi, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 15/07/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: : 21/07/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal filed by the assessee is directed against the order of the ld. CIT(A), Jaipur -5 dated 05.02.2024 for the assessment year 2017-18 raising therein following grounds of appeal. ‘’1.The Ld. CIT(A) has erred on facts and in law in confirming the addition of Rs.87,21,500/- 69A of the Act by treating the cash deposit during demonetization period as unexplained. 2. The Ld. CIT(A)has erred on facts and in law in taxing the alleged unexplained cash deposit in the bank account u/s115BBE@ 60%, instead of Printed from counselvise.com 2 ITA NO. 546/JPR/2025 SHRI ABHAY KUMAR GODHA VS ACIT, CIRCLE-1, JAIPUR taking the same 30% by ignoring that section 115BBE substituted by Taxation Laws (Second Amendment Ac1, 2016 which received the assent of President on 15.12.2016 and made applicable from 01.04.2017 is applicable to any transaction from 01.04.2017 onwards and not to any transaction prior to 01.04.2017 as held by Hon'ble Madras High Coat in case of SMILE Microfinance Ltd. Vs ACIT vide order dt. 19.11.2024’’ 2.1 During the course of hearing, the Bench noticed that there is a delay of 340 days in filing the appeal for which the assessee has filed an application dated 03-04-2025 for condonation of delay giving therein following reasoning. ‘’Sub: Application for condonation of delay in filing the appeal With reference to above it is to submit that the Ld. CIT(A) vide order dt. 05.02.2024 has upheld the order passed by AO assessing the total income at Rs.1,23,35,229/- The appeal was to be filed on or before 05.04.2024. However, for the reasons stated hereunder, the appeal could not be filed in time 1. My income tax assessment for AY 2017-18 was framed by ACIT, Circle-1, Jaipur vide order dt. 12.12.2019 where addition of Rs.87,21,500/- was made u/s 69A of the Act by treating the cash deposit during demonetization period as unexplained and disallowance of Rs.2,05,049/- was made u/s 36(1)(va) on account of delayed payment of employees contribution towards PF &ESI 2. Against this order, I had filed an appeal before Ld. CIT(A) on 23.12.2019. In Form No.35, at Column No.17- Address to which notices may be sent to the appellant was given of my Chartered Accountant Sh. Anil Nuhal of M/s Kalani & Co, Jaipur with e-mail id [e-mail]. However, no notice was issued at this address and e-mail id. The notices were issued at e-mail id. erosjewelry [e-mail] which did not come to my notice and therefore these notices remained uncomplied with. Due to non-compliance, the Ld. CIT(A) passed the order on 05.02.2024 dismissing the appeal of assessee 3. The fact of passing the appellate order came to the notice of CA Jagdish Somani of M/s Kalani & Co. when the AO communicated to him on 19.03.2025 about the pendency of penalty proceedings. Thereafter the appellate order was Printed from counselvise.com 3 ITA NO. 546/JPR/2025 SHRI ABHAY KUMAR GODHA VS ACIT, CIRCLE-1, JAIPUR downloaded from my e-filing portal and it was suggested to me to file appeal before ITAT with application for condonation of delay. 4. Thus from the date of the order u/s 250, the time for filing the appeal before ITAT has expired but from the date of the knowledge of passing the order, the appeal filed is in time but as advised to me, I am now filing the appeal before Hon'ble ITAT with a request to condone the delay in filing the appeal. 5. Thus the delay in filing the appeal before Hon'ble ITAT is due to a reasonable cause and therefore, the same be condoned and appeal be admitted for hearing for imparting substantial justice. To this effect, the assessee Shri Abhay Kumar Godha has filed an affidavit deposing therein the above facts of the case. 2.2 On the other hand, the ld.DR did not controvert the facts stated in the application for condonation of delay. 2.3 We have heard both the parties and perused the materials available on record including the affidavit of assessee. The bench noted that the assessee vide Form No.35, at Column No.17- Address to which notices may be sent to the appellant was given of my Chartered Accountant Sh. Anil Nuhal of M/s Kalani & Co, Jaipur with e-mail id [e-mail]. However, no notice was issued at this address and e-mail id. The notices were issued at e-mail id. erosjewelry [e-mail] which did not come to the notice and therefore these notices remained uncomplied with and the same is the reason for delay in filling the present appeal. In this case, the Bench in nutshell noted that there is sufficient cause in not Printed from counselvise.com 4 ITA NO. 546/JPR/2025 SHRI ABHAY KUMAR GODHA VS ACIT, CIRCLE-1, JAIPUR timely filing the appeal of the assessee and there is merit in the application of the assessee. Thus the delay is condoned. 3.1 Apropos grounds of appeal, it is noticed that the ld. CIT(A) has dismissed the appeal of the assessee by upholding the action of the AO. The narration as made by the ld CIT(A) in his order is reproduced as under:- ‘’5. DECISION: (For grounds 1,1.1,1.2,1.3 & 2) 5.1 Despite of the various opportunities, the appellant has neither filed any reply nor any documentary evidences in support of his pending appeal. Hence the appeal is decided on the basis of material available on record. 5.2 The assessee was an exporter of precious & semi-precious stones. He was also having a manufacturing unit in the name of M/s Eros Jewellery International at SEZ unit Sitapura, Jaipur and earned income from business or profession. The assessee had filed his return of income for the AY 2017-18 on 30.09.2017 declaring total Income of Rs. 34,08,680/- Further, the case was selected for scrutiny assessment through CASS under \"Complete Scrutiny and accordingly, notice u/s 143(2) of the I.T Act, 1961 was issued on 09.08.2018 through ITBA- portal which was duly served upon the assessee. In response, the assessee acknowledged the receipt on 21.08.2018. 5.3 Thereafter notices u/s 142(1) of the I.T.Act, 1961 had been issued by the AO and in response there to the assessee had furnished his reply. The AO had mentioned in the assessment order that on considering the submission made by the assessee and details available with him, it had been noticed that the assessee had deposited Cash being SBNs amounting to Rs. 87,21,500/- in the bank account No. 12860100001199 maintained in the Bank of Baroda. Since, the Bank Notes of the denominational value of \"Five Hundred Rupees\" and \"One Thousand Rupees\" of the series existing on or before the 8th day of November, 2016 were banned by the Government of India by The Specified Bank Notes (Cessation of Liabilities) Act, 2017 w.e.f. 09.11.2016 and the assessee had deposited huge cash as SBNs of Rs. 87,21,500/- in his bank account, therefore, the source of such bank deposit was verified by the AO. Printed from counselvise.com 5 ITA NO. 546/JPR/2025 SHRI ABHAY KUMAR GODHA VS ACIT, CIRCLE-1, JAIPUR 5.4 Since, the assessee did not explain the source of cash deposit after giving various notices as well as specific notice regarding cash deposit, therefore, notice u/s 142(1) of the Act annexing show cause notice had been issued to the assessee by the AO on 04.12.2019 fixing the date for furnishing submission by 06.12.2019. 5.5 The AO had considered the reply of assessee and not found tenable as the assessee was only trying to distract from the facts of the case. 5.6 On perusal of the assessment order, it has been noticed that earlier in the case of the assessee search u/s 132 of the IT Act, 1961 was conducted on 23.05.2013. In search certain documents/diary was found in which the amount taken from various persons were found noted. The assessee offered all such amounts and filed application u/s 245C declaring income of Rs 6.91 crore before ITSC, New Delhi. Thereafter, the Settlement Commission passed final order u/s 245D(4) dated 29.09.2016 by making addition of Rs. 62,55,140/- and thereby assessed the total Income at Rs. 7.5 crore. Thereafter, in pursuance to rectification application the Settlement Commission passed order u/s 245D(6B) dated 17.02.2017 assessing the total income at Rs. 7.5 crore. Along with the order the Settlement Commission had prepared an inflow-outflow statement, as per which the excess of inflow (surplus) was available to the tune of Rs. 7,84,69,614/- as on 31st March 2014. As per the assessee cash of Rs.87,21,500/- on 27.12.2016 was deposited in the bank account out of the cash inflow available with him as per the order passed by the ITSC 5.7 Further, it is noticed that the AO had clearly mentioned in the assessment order that the assessee had furnished revised inflow-outflow of undisclosed transactions whereas the assessee did not state that the income was under which head of income, whether it was held as cash or not. Further, the assessee did not furnish any cash flow statement as well as cash book so that position of cash balance as on 08.11.2016 could be justified. Under these circumstance, the cash deposit being SBNs were treated by the AO as unexplained, as the assessee had failed to establish the source of such cash deposits, the AO was justified to make an addition of Rs.87,21,500/- considering the unexplained income of the assessee u/s 69A of the 1.T.Act, 1961. The assessee has also not made any submission in this regard during the course of appellate proceedings. 5.8 Further AO had also disallowed the Employee's contribution towards Provident Fund and ESI payment of Rs.2,05,049/- u/s 36(1)(va) of the I.T.Act, 1961 as the same were deposited in the Central Government Account after the prescribed due dates. This issue in the ground of appeal is with respect to the disallowance of delayed deposit of employee's contribution of PF & ESI. The Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. and others vs. CIT and others has held that the contribution by the employees to the Printed from counselvise.com 6 ITA NO. 546/JPR/2025 SHRI ABHAY KUMAR GODHA VS ACIT, CIRCLE-1, JAIPUR relevant funds is the employer's income under Section 2(24)(x) of the IT Act and the deduction for the same can be allowed only if such amount is deposited in the employee's account in the relevant fund before the date stipulated under the respective Acts. Thus, the deduction under Section 36(1) (va) of the IT Act can be allowed only if the employees' share in the relevant funds is deposited by the employer before the due date stipulated in respective Acts. As the appellant has failed to make compliance of the provisions of section 36(1)(va) of the I.T.Act, 1961 r.w.s. 2(24)(x) of the I.T.Act, 1961, the AO was justified to disallow the deduction of Rs.2,05,049/- u/s 36(1) (va) of the I.T.Act, 1961. 5.9 The appellant has remained noncompliant at the appellate stage also, without taking the chance to represent his case. Such non-compliance at every stage indicates that the appellant has no explanation to offer in the matter and there is no factual basis of the claims made in the grounds of appeal and I am constrained to agree with the decision of the AO to the additions of Rs. 89,26,549/- 5.10 In this connection I take support from a judgement of the Hon'ble ITAT Agra Bench in the case of Shivangi Steel (P.) Ltd. v. Assistant Commissioner of Income tax, Central Circle, reported in [2014] 42 taxmann.com 393 (Agra Trib.), where it has been held that Section 251, read with section 144, of the Income-tax Act, 1961-Commissioner (Appeals) Powers of [Exparteorder] Assessment year 2005-06 Despite several notices issued under sections 143(2) and 142(1), assessee did not attend assessment proceedings, nor filed any explanation - Assessing Officer, therefore, passed an exparte assessment order under section 144 on assessee Further assessee in spite of large number of adjournments granted by Commissioner (Appeals) did not produce any document in respect of grounds of appeal, nor made written or oral submissions before him Commissioner (Appeals), therefore, proceeded ex parte against assessee and confirmed assessment order -Whether both Commissioner (Appeals) and Assessing Officer rightly proceeded ex parte against assessee Held, yes [Para 6] [In favour of revenue] Section 254 of the Income-tax Act, 1961 read with rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 Appellate Tribunal Powers of [Powers to admit additional evidence) Assessment year 2005-06-Assessing Officer passed an exparte assessment order under section 144 on assessee - Commissioner (Appeals) in absence of any co-operation from side of assessee proceeded exparte against assessee and confirmed assessment order - Against order of Commissioner (Appeals), assessee filed appeal before Tribunal - It also moved application under rule 29 of Appellate Tribunal Rules, 1963 for admission of additional evidences - Whether since assessee had not made out any case that authorities below had decided case without giving sufficient opportunity to adduce evidence, requirement of rule 29 had not been satisfied - Held, yes Whether, therefore, above application was liable to be rejected Held, yes [Para 7] {In favour of revenue} Printed from counselvise.com 7 ITA NO. 546/JPR/2025 SHRI ABHAY KUMAR GODHA VS ACIT, CIRCLE-1, JAIPUR Following the above discussion, I uphold the additions made by the AO. Thus, grounds of appeal 1, 1.1, 1.2, 1.3 & 2 are hereby dismissed. 6. In the result, the appeal is treated as dismissed.’’ 3.2 During the course of hearing, the ld. AR of the assessee submitted that he could not comply with the notices of the ld.CIT(A) nor adduced the arguments/ written submission to counter the addition as made by the AO in the assessment order for the reason that the notices issued by the ldCIT(A) were not received as per E-mail address given in Form 35. It is pertinent to mention that the correct E-mail address as per Form 35 is [e-mail]. but the notices sent by the ld. CIT(A) were at E-Mail address [e-mail] . Hence the assessee could not respond to the notices issued by the ld. CIT(A). The ld. AR of the assessee prayed before the Bench to restore the matter to the file of the ld. CIT(A) for afresh adjudication so that the assessee may be in a position to argue the case before the ld CIT(A). 3.3 On the other hand, the ld. DR did not object to the submission of the ld. AR of the assessee. 3.4 We have heard both the parties and perused the materials available on record. In this case, it is noticed that the AO made an addition of Printed from counselvise.com 8 ITA NO. 546/JPR/2025 SHRI ABHAY KUMAR GODHA VS ACIT, CIRCLE-1, JAIPUR Rs.87,21,500/- u/s 69A of the Act as the assessee failed to establish the source of cash deposits made in the Bank of Baroda during demonetization period. Further the AO had also disallowed the Employee’s Contribution towards Provident Fund and ESI payment of Rs.2,05,049/- u/s 36(1)(va) of the Act as the same were deposited in the Central Govt. Account after the prescribed due dates. Thus the AO made total addition of Rs.89,26,549/- in the hands of the assessee. In first appeal, the ld. CIT(A)has confirmed the action of the AO as the assessee was non-compliance at the appellate stage in spite of notices sent to the assessee. However, during the course of hearing, the ld. AR of the assessee submitted that the ld. CIT(A) had sent the notices at wrong E-mail address and thus he could not comply with the notices. Hence, in this view of the matter, the Bench feels to restore the matter to the file of the ld. CIT(A) for afresh adjudication of the appeal of the asssssee but by providing adequate opportunity of hearing to the assessee and the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes. 3.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(A) shall in no way be construed as Printed from counselvise.com 9 ITA NO. 546/JPR/2025 SHRI ABHAY KUMAR GODHA VS ACIT, CIRCLE-1, JAIPUR having any reflection or expression on the merits of the dispute, which shall be adjudicated by ld. CIT(A) independently in accordance with law. 4.0 In the result, the appeal of the assessee is allowed for statistical purposes Order pronounced in the open court on 21/07/2025. Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 21/07/2025 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shri Abhay Kumar Godha, Jaipur 2. izR;FkhZ@ The Respondent- The ACIT, Circle -1, Jaipur 3. vk;djvk;qDr@Theld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (ITA No.546/JP/2025) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar Printed from counselvise.com "