SOM PRAKASH,SAHARANPUR V. INCOME TAX OFFICER WARD 3(3)(5), SAHARANPUR

ITA 5335/DEL/2024

AI Insights

The case revolves around an appeal by Som Prakash against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), which sustained an addition of Rs.6,45,600 to his income for the Assessment Year 2012-13. This addition was initially made by the AO based on information that the assessee had deposited substantial cash in his bank account, which was not adequately explained. The assessee argued that these deposits were from cash withdrawals made earlier in the year, a claim supported by medical evidence of his inability to manage his affairs due to health issues. The Tribunal, after considering the submissions and evidence, including the assessee's medical conditions and the pattern of cash withdrawals and deposits, decided in favor of the assessee, allowing the appeal and removing the addition to his income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314660 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.S. ANAND
• Assessee Lawyers: ANIL JAIN
• Keywords: Condonation of delay; Business income; Reasonable cause
• Section: 148; 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’: NEW DELHI BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.5335/DEL/2024 (Assessment Year: 2012-13) Som Prakash, vs. ITO, Ward 3 (3)(5), Shahpur Daud, Bartha Kayasth, Sahranpur (UP). Teh Behat, Saharanpur – 247 232 (Uttar Pradesh). (PAN : CIHPP0005R) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Anil Jain, Advocate REVENUE BY : Shri B.S. Anand, Sr. DR Date of Hearing : 03.03.2025 Date of Order : 09.05.2025 O R D E R 1. The assessee has filed appeal against the order of the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT(A)”, for short] dated 08.08.2023 for the Assessment Year 2012-13. 2. At the time of filing of appeal, the Registry has pointed out a defect that appeal is time barred by 439 days. In response thereof, the Assessee has filed an application seeking condonation of delay in filing of the appeal on the ground that the assessee was suffering from Neuro problem of Schizo and in the habit of forgetting the things besides hyper tension and other disorders since more than 10 years. He submitted that due to the above diseases and disorders, it slipped from his mind to file the appeal against the said order. In support of 2 ITA No.5335/DEL/2024 this, the assessee filed an affidavit as well as prescriptions of medical treatment, which are placed on record. Accordingly, he prayed that the delay in filing the appeal be condoned. On the other hand, ld. DR of the Revenue objected to the condonation of delay and pleaded to dismiss the application. 3. We have heard both the counsels on the issue of condonation of delay. In our considered opinion, there was a reasonable cause for the delay in filing the appeal. Therefore, we condone the delay in filing the appeal before the Tribunal. 4. Brief facts of the case are, the case of the assessee was reopened on the basis of AIR information that assessee has deposited cash aggregating to Rs.33,14,600/- in UBI, Saharanpur Branch during FY 2011-12. Accordingly, notices were issued to the assessee under section 148 of the Income-tax Act, 1961 (for short ‘the Act’). In response, assessee filed its return of income on 23.11.2019 declaring the income of Rs.1,75,150/- against the gross receipt of Rs.21,14,000/-. Subsequently, notices u/s 143(2) and 142(1) were issued and served on the assessee. In response, assessee has submitted the details of cash deposited as under :- (i) Business receipts/sales Rs.4,14,000/- (ii) Old Balance Rs. 85,000/- (iii) Agricultural Income Rs.2,80,000/- (iv) Cash deposits out of withdrawals From the same bank account Rs.6,45,600/- 3 ITA No.5335/DEL/2024 5. The AO observed that no evidence was given for the above business activities. The assessee has not disclosed the purpose of withdrawal and redeposit of such entries. After considering the other submissions of the assessee, the AO accepted the cash deposits out of business and agricultural income, however proceeded to make the addition of Rs.6,45,600/- which was deposited out of cash withdrawal. 6. Aggrieved with the above order, assessee preferred an appeal before the NFAC, Delhi. After considering the submissions of the assessee, ld. CIT(A) rejected the same by observing that there was no new fact or evidence brought on record. Accordingly, he sustained the addition made by the AO. 7. Aggrieved assessee filed an appeal before us raising following grounds of appeal :- “1. The ld. CIT (A) has erred in confirming the order of the AO for the addition ofRs.6,45,000/- under section 69A for cash deposited in the bank, without considering the submissions of the appellant. 2. The Ld. AO has erred in reopening the assessment u/s 148. 3. The order of ld. CIT (A) is against law and facts of case.” 8. At the time of hearing, ld. AR of the assessee brought to our notice above facts on record and submitted that assessee has deposited the cash out of cash withdrawals made by the assessee and he brought to our notice page 22 of the paper book wherein assessee has withdrawn cash to the extent of Rs.23,97,300/-. He also submitted that there is several high value of withdrawals and the same were re-deposited during the year. He prayed that 4 ITA No.5335/DEL/2024 the sources were already declared by the assessee. Therefore, the same addition cannot be made. 9. On the other hand, ld. DR of the Revenue relied on the findings of the lower authorities. 10. Considered the rival submissions and material placed on record. We observed that the case of the assessee was reopened on the basis of cash deposits in its bank account and assessee has explained the sources of cash deposits which enclosed business receipts and agricultural income. The AO has accepted the same, however rejected the cash deposits out of cash withdrawals. Before us, ld. AR of the assessee brought to our notice that during the year, assessee has withdrawn cash of Rs.23,97,300/- and re-deposited out of withdrawals are only Rs.6,45,600/-/. In our considered view, there are enough cash withdrawals made by the assessee during the year and there are chances of re-depositing the same. Therefore, there are sufficient cash withdrawals to support the submissions of the assessee. Accordingly, we are inclined to allow the grounds raised by the assessee. 11. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on this 9th day of May, 2025. Sd/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER Dated: 09.05.2025 TS 5 ITA No.5335/DEL/2024 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals). 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "