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Judgment
ORDER
PER BRAJESH KUMAR SINGH, AM,
This appeal filed by the assessee is directed against the order dated 25.06.2025 of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the assessment order dated 22.12.2019 passed under section 144 of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) by the Assessing Officer (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2012-13.
This appeal has been filed with a delay of 192 days. In this connection, the assessee has filed a condonation application which is reproduced as under:
“1.That the Appellant has filed the accompanying Memorandum of Appeal before this Hon'ble Tribunal against the order dated 25.06.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), New Delhi.
2.That as per the provisions of the Income-tax Act, 1961, the present appeal was required to be filed within the prescribed period from the date of the appellate order; however, the appeal could not be filed within the said period and is consequently being filed with a delay of 192 days, as the Appellant never received any notice of hearing or a copy of the impugned appellate order, either physically or electronically, and all communications during the appellate proceedings were routed only to the email ID of the Chartered Accountant, who failed to inform the Appellant about the pendency or disposal of the appeal.
3.It is respectfully submitted that the Appellant first became aware of the existence of the impugned order only on 03.01.2026, when HDFC Bank, Haryana, without any prior intimation or opportunity, debited an amount of ~19,94, 750/-, followed by a further debit of Rs. 1,04,309/- on 08.01.2026, aggregating to ~20,99,059/-, towards recovery proceedings initiated by the Department.
4.That immediately upon acquiring knowledge of the impugned order and the coercive recovery action, the Appellant took prompt steps to obtain the relevant records and file the present appeal without any further delay.
5.That the delay in filing the appeal has occurred due to bona fide and unavoidable reasons, without any negligence, wilful default or deliberate inaction on the part of the Appellant. The delay is entirely attributable to lack of actual knowledge of the appellate proceedings and order.
6.That the Appellant has a strong and arguable case on merits, and grave and irreparable prejudice would be caused if the delay is not condoned and the appeal is not heard on merits, whereas no prejudice would be caused to the Revenue by condonation of the delay.
7.That the facts stated above constitute "sufficient cause" within the meaning of Section 5 of the Limitation Act, 1963.
8.That the Application has been made bona fide and in the interests of justice.”
The Ld. CIT(DR) did not raise any objection against the said delay. Considering the explanation filed by the assessee, the same is condoned and the appeal is taken up for adjudication.
Brief facts of the case: The assessee is an individual and an AIR information was received from O/o the Addl. Commissioner of income Tax, Range-1, Noida that the assessee had deposited cash amounting to Rs. 27,00,000/- in her savings bank account maintained with HDFC Dank Limited and sold an immovable property for a consideration of Rs. 72,35,000/- during the F.Y. 2011-12 i.e. relevant to A.Y. 2012-13. Subsequently, verification notices were issued by the AO on 07.01.2019 and 22.02.2019 to examine the source of cash deposited and the undisclosed Long Term Capital Gain (LTCG) that arose on transfer of immovable property. Further, the AO noted that as no reply was furnished by the assessee, provisions of Section 147 of the IT Act, 1961 were invoked after recording of reasons placed on record and notice u/s 148 of the act was issued on 28.03.2019 with prior approval of Ld. Pr. Commissioner of Income Tax, Noida. The AO noted that, compliance of the notice u/s 148 of the Act was not made by the assessee within the given prescribed time. Thereafter, the AO issued several notices to the assessee but according to the AO, there was no compliance to the said notice. The AO completed the assessment u/s 147/144 of the Act on 22.12.2019.
In the assessment order, the source of cash deposited amounting to Rs. 27,00,000/- in the saving bank account of the assessee was treated unexplained and was held to be unexplained investment within the meaning of section 69 of the I. T. Act, and added to the total income of the assessee.
Further, as per AIR information the assessee had sold an immovable property jointly with 1 other co-owner for sale consideration of Rs. 56,00,000/- (Value as per 50C: Rs. 72,35,000/-) during the FY 2011-12, and in absence of any compliance on the part of the assessee the AO calculated Rs. 50,64,500/- as LTCG and the share of LTCG in hands of assessee was taken for Rs. 25.32,250/-. Accordingly, the assessment was made at a total income of Rs. 52,32,250/- for AY 2012-13.
Aggrieved by the said order u/s 144 /147 of the Act dated 22.12.2019 for A.Y. 2012-13, the assessee filed an appeal before the CIT(A), who dismissed the appeal ex parte on the ground that the assessee did not appear before him despite several notices as per the details below were issued by the Ld. CIT(A).
| S. No. | Date of Issue | Compliance date | Remarks |
| 1 | 047.01.2021 | 22.01.2021 | The appellant did not respond. |
| 2 | 28.04.2021 | 13.05.2021 | The appellant did not respond. |
| 3 | 06.08.2021 | 23.08.2021 | The appellant did not respond. |
| 4 | 12.02.2024 | 16.02.2024 | The appellant did not respond. |
| 5 | 13.01.2025 | 20.01.2025 | The appellant did not respond. |
| 6 | 30.05.2025 | 11.06.2025 | The appellant did not respond. |
The concluding para of the Ld. CIT(A) is reproduced as under:
“I have carefully gone through the grounds of appeal, statement of facts, assessment order and other material on record. In response to notice of hearing issued, the appellant has not made any submissions to corroborate the Grounds of Appeal. The appellant has not submitted any documentary evidences during the Appellate proceedings. The appellant has not uploaded even a single document in response to the above notices, in spite of multiple hearing opportunities (as above). The appellant failed to substantiate the claims made in grounds of Appeal and there is nothing available on record to rebut the Assessing Officer's findings on merits. The appellant has not produced any material to controvert the finding of A O. Further, from the abovementioned conduct of the appellant, it is clear that the appellant is not interested in prosecuting its appeal. As no details are uploaded by the appellant, there is nothing available on record to rebut the Assessing Officer's findings on merits. No purpose would be served by keeping this appeal pending. As per the details available on record, there is nothing to controvert the findings of the AO and therefore, all the grounds raised in appeal are hereby dismissed. In the event, I have no reason to interfere with the findings of the AO. Hence, the order of the Assessing Officer is confirmed and the appeal is dismissed. In the result, the appeal filed by the appellant is “dismissed”.
Aggrieved with the said order, the assessee filed an appeal before us on the following grounds of appeal:
“1.That the Learned Commissioner of Income Tax Appeals, NFAC has erred in law and on facts in dismissing the appeal ex parte in a purely mechanical manner, without adjudicating the issues on merits and without independent application of mind, in contravention of sub section 6 of Section 250 of the Income tax 1 Act, 1961 and the principles of natural justice. The Learned Commissioner of Income Tax Appeals, NFAC has merely affirmed the order of the Assessing Officer without examining the factual matrix OR legal sustainability of the additions made, thereby rendering the impugned appellate order unsustainable in law.
2.That no valid OR effective notice of hearing was ever served upon the appellant, as the alleged notices, including notice dated 25.06.2025, were sent to the email address of the erstwhile Chartered Accountant and were never received by the appellant. Consequently, the appellant had no knowledge of the pendency of the appeal OR the hearing dates. The appellant became aware of the impugned order only on 03.01.2026 upon intimation from HDFC Bank regarding recovery proceedings and attachment of the appellant bank account, resulting in forcible recovery of Rs. 20,99,059 without affording any opportunity of being heard. The entire proceedings are thus vitiated for want of proper service of notice and denial of reasonable opportunity, in violation of the principles of natural justice
3.That the addition of Rs. 27,00,000 made under Section 69 of the Act is arbitrary, presumptive and unsustainable in law, having been made solely on the basis of AIR information relating to cash deposits, without conducting any proper enquiry OR examining the nature and source thereof, and without affording the appellant an opportunity of explanation. The authorities below failed to establish that the alleged cash deposits constituted unexplained investment within the meaning of Section 69, and the impugned addition has been made in a summary and mechanical manner, liable to be deleted.
4.That the computation of long term capital gain at Rs. 50,64,500 and the consequential addition of Rs. 25,32,250 are erroneous and unsustainable in law. The Assessing Officer wrongly adopted a deemed sale value of Rs. 72,35,000 under Section 50C in place of the actual consideration of Rs. 56,00,000, without 4 applying the correct circle rate OR making a reference to the Departmental Valuation Officer under Section 50 C. The further assumption that the cash deposit of Rs. 27,00,000 arose from the said sale is incorrect, as the amount was a friendly loan from the appellant mother. The impugned computation is arbitrary and liable to be deleted.
5.That the assessment framed under Sections 144 and 147 of the Act and its confirmation by the Ld. Commissioner of Income Tax Appeals are vitiated in law, having been completed without proper service of statutory notices and without affording a 5 meaningful opportunity of hearing. The Ld. Commissioner of Income Tax Appeals mechanically affirmed the assessment order without independent application of mind, thereby causing grave prejudice to the appellant and rendering the impugned orders unsustainable in law.
6.That the initiation and sustenance of penalty proceedings under Section 271 subsection 1 c are illegal and premature, when the assessment itself is ex parte, disputed on merits and suffers from serious procedural and jurisdictional defects.”
At the outset, the Ld. Counsel for the assessee referred to para 2 of the condonation petition and requested that the matter be set aside to the file of the AO as the assessee could not appear before the Ld. CIT (A)/AO and the additions made by the AO require factual verification. In the said para of the condonation petition it was stated that the reasons for the delay in filing of the appeal was that the assessee never received any notice of hearing or a copy of the impugned appellate order, either physically or electronically, and all communications during the appellate proceedings were routed only to the email ID of the Chartered Accountant, who failed to inform the assessee about the pendency or disposal of the appeal.
The Ld. CIT(DR) supported the order of the authorities below but did not seriously object to the submissions of the assessee for restoring the matter to the file of the AO.
We have heard both the parties and considered the material available on record. The explanation submitted by the assessee for non-appearance before the Ld. CIT(A) is reasonable and found to be acceptable. Further the assessee did not appear before the AO, and the assessment was completed u/s 144/147 of the Act on 22.12.2019. The addition on account of cash deposit of Rs. 27,00,000/- in the savings bank account of the assessee and the addition of LTCG of Rs. 25,32,320/-on account of sale of an immovable property made in the impugned assessment order require factual verification. Therefore, in the interest of justice and to afford one more opportunity to the assessee, we set aside the orders of the AO and the Ld. CIT(A) and restore the matter to the file of the AO to decide the issue afresh in the in accordance with law.
Further, the assessee will be at liberty to submit any evidence/details before the AO in support of her claim.
In the result, appeal of the assessee is allowed for statistical purposes.