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Judgment
PER RAMIT KOCHAR, AM:
This appeal in ITA No. 8619//Del/2025 for Assessment Year: 2012-13 has arisen form the learned CIT(A)’s appellate order dated 21.12.2021 passed u/s 250 of the Income-tax Act, 1961( hereinafter called “the Act”) in DIN & Order No: ITBA/NFAC/S/250/2021-22/1037975984(1), which in turn has arisen from the re-assessment order dated 19.11.2019 passed by the AO u/s 147 r.w.s 144 of the 1961 Act.
At the outset, it is observed that this appeal is filed belatedly by the assessee beyond the time stipulated u/s 253(3) of the 1961 Act by 1396 days. The assessee has filed application for condonation of delay along with supporting affidavit, wherein the assessee has averred that the assessee is educated only upto 10th class. . The assesse is not having knowledge of English language. It is stated that the assessee cannot read, write or understand English Language. It is stated that the assessee was not having knowledge of the appellate order passed by the Ld. CIT(A). It was submitted that the assessee was not aware of time limits prescribed for filing appeal with ITAT.It was submitted that the assessee was under the impression that the appeal is still pending with Ld. CIT(A). It is stated that recently on making some enquiries, the assessee came to know of the appellate order passed by ld. CIT(A) , wherein the assessee appeal was dismissed by ld. CIT(A). It is submitted that the assessee was not able to understand the implication of the notices issued by Revenue, and that the said notices were in English language and the assessee cannot read , write or understand English, the assessee did not became aware of the contents of the said notices. It is stated that the assessee is dependent on others for translation of documents in English. Further, it is stated by the assessee that he is more than 73 years old , and he is struggling with several medical illness for long time. It is averred that the assesse was admitted to the PSRI Hospital and underwent examination including bone marrow for suspected multiple myeloma, and was diagnosed of the Chronic Kidney Disease, Hypertension and other complications. Thus, the assessee has prayed that the delay in filing the appeal be condoned , and the appeal be heard on merits.
Ld. Departmental Representative objected to the condonation of delay but fairly submitted that Bench can take decision based on the merits of the condonation application.
After hearing both the parties and going through the contents of the condonation application ,affidavit filed and other materials on record, we condone the delay of 1369 days in filing this appeal belatedly beyond the time prescribed u/s 253(3) , and proceed to adjudicate this appeal on merits in accordance with law. When substantial justice is pitted against the technicalities , the Courts will lean towards advancement of substantial justice. Reliance is placed on the decision of the Hon’ble Supreme Court in the case of Collector , Land Acqusition, Anantnag v. Mst. Katiji & Ors. 1987(2) SCC 107.
The grounds of appeal raised by the assessee in memo of appeal filed with the Tribunal, reads as under:
“1.Under the facts and circumstances of the case and in law, the notice issued under Section 148 of the Act is illegal, bad in law and without jurisdiction.
2.Under the facts and circumstances of the case and in law, the order passed by the CIT(A)/ NFAC dated 21.12.2021, and the assessment order dated 19.11.2019 are illegal, perverse, arbitrary, without jurisdiction and bad in law.
3.Under the facts and circumstances of the case and in law, the Assessing Officer erred in reopening the assessment under section 147/148 without any tangible material or valid "reasons to believe" that income had escaped assessment. The reopening is bad in law and void ab initio.
4.Under the facts and circumstances of the case and in law, the Assessing Officer erred in making an addition of Rs. 48,41,000/- on account of alleged unexplained cash deposits without knowing the merits of the case and the CIT(A)/NFAC has erred in confirming the said addition.
5.Under the facts and circumstances of the case and in law, the CIT(A)/NFAC and the Assessing Officer ought to have considered that the cash deposits made by the Appellant did not automatically constitute taxable income.
6.Under the facts and circumstances of the case and in law, the authorities below erred in sustaining the addition without examining the bank account,the nature and source of deposits. The addition is purely mechanical and contrary to settled judicial principles.
7.Under the facts and circumstances of the case and in law, both the Assessing Officer and the learned CIT(A) erred in passing ex parte orders without granting a proper and effective opportunity of hearing.
8.Under the facts and circumstances of the case and in law, CIT(A) erred in dismissing the appeal ex parte, without considering facts, without calling for remand report, and by passing a non-speaking and mechanical order merely reproducing the assessment order, thereby rendering the appellate order unsustainable.
9.Under the facts and circumstances of the case and in law, the Ld. AO/CIT(A)/NFAC has erred both on the facts and in law, in charging interest under section 234A, 234B, and 234C of the Act. The Ld. AO/CIT(A)/NFAC has also erred on facts and in law, in initiating penalty proceedings under section 271(1)(c) of the Act.”
Brief facts of the case are that as per NMS information which was pushed into the ITD System on the grounds that the assessee has deposited cash to the tune of Rs.48,41,500/- in his bank account during the year under consideration. The AO observed that the assesse has filed return of income and declared income of Rs.1,89,270/-. The case of the assessee was reopened by the AO u/s 147 of the Act. Reasons were recorded. Statutory notices u/s 148 were issued on 29.03.2019 with prior approval of the competent authority. Several notices u/s 142(1) were issued from time to time during reassessment proceedings and served on the assessee, but there was no compliance by the assessee, and the assessee never participated in the reassessment proceedings. Show cause notice was also issued by the AO but that too remained un-complied with. The AO proceeded to frame best judgment assessment as sources of cash deposits remained unexplained., which led to the additions being made by the AO to the income of the assessee to the tune of Rs.48,41,000/- on account of cash deposit in the bank account , vide reassessment order dated 19.11.2019 passed by the AO u/s 144 read with Section 147 of the 1961 Act..
Aggrieved the assessee filed first appeal with Ld. CIT(A) which was dismissed ex-parte by the Ld. CIT(A) , by holding as under:
"WHETHER THE LEARNED ASSESSING OFFICER WAS JUSTIFIED IN ADDING RS 4841000.00 TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF CASH DEPOSITED DURING AY 2012-13."
4. Finding and decision: During the course of appellate proceedings, after implementation of faceless
appeal scheme, the appellant was granted opportunity to file submissions and documents in support of its grounds of appeal vide notices dated 22.01.2021 (fixing date of compliance 29.01.2021) but no reply has been filed. Further, on 14.10.2021 (fixing date of compliance 21.10.2021). In response of it, appellant filed an adjournment application on 15.10.2021 which is as under:
"Dear Sir, Appeal proceedings are fixed for hearing on or before 21/10/2021. The assessee seek 15 days’ time to reply to your notice. It is humbly requested to adjourn the proceedings for 15 days. Rajesh Kumar Verma”
After given sufficient time, again a Hearing Notice issued u/s 250 of Income Tax Act 1961, (fixing date of compliance 16.12.2021). However, till date there has been no response from the appellant.
Therefore, it is apparent that the appellant have no submissions/documents to submit in support of its grounds of appeal. I have considered the statement of facts and grounds of appeals filed as well as the assessment order. On carefully considering the facts and circumstances and assessment order, I find no infirmity in the assessment order. It is a fact that there was cash deposit in bank accounts which appellant could not explain. No return was also filed by the appellant in response to notice u/s 148 as subsequent notices u/s. 142(1) of the Act. Accordingly, the addition made by the AO is confirmed.
Thus all grounds of appeal fail and hence dismissed.
5.Accordingly appeal is dismissed.”
Thus, the Ld. CIT(A) upheld the reassessment order passed by the AO, and dismissed the appeal of the assessee.
Aggrieved , the assessee has now filed appeal with the Tribunal. The Ld. Counsel for the assessee submitted that the assessee is running Fair Price Shop (Government Ration Distribution Shop). Copy of the Contract of Ration distribution wherein authorization were granted to run Fair Price Shop issued by Food & Supply Department, Delhi Administration, GNCT of Delhi, Delhi from time to time are filed which are placed on record. It was submitted that assessee was selling the Wheat & Wheat products, Rice, Sugar, Rapeseed oil. R.B.D. Palm Oil , Palmolein Oil, Soyabean Oil, Candles, Panghat & No. 1 Vanaspati and Controlled Cloth through Government authorized Fair Market Price Shop to various Ration Cards holders , and cash is generated from the sale of aforesaid products to member of public /ration card holders. The cash so generated from sale is deposited in the bank account, and the payment of such approved commodities purchased by the assessee and other expenses were made to various suppliers/vendors through banking channel. The assessee has brought on record bank statement of Axis Bank bearing number 910020003244612 , and it is claimed that the cash was deposited from sale of aforesaid commodities and from where payments were made for various Ration supplies to the assessee. It was submitted that the cash of 48,41,500/- was deposited in the bank account wherein entire cash is explainable. It was prayed that one more opportunity be granted to the assessee, wherein the assessee will appear and explain the entire bank transactions and other queries raised by the authorities below. Thus, the prayer was made for setting aside the orders of the authorities below, and remanding the matter back to the file of the AO for denovo assessment.
The Ld. DR relied upon the order of the authorities below but fairly submitted that the matter can be restored back to file of the AO for denovo assessment.
We have considered rival contentions and perused the materials available on record, which are culled out in preceding para’s of this order and are not repeated again. Keeping in view facts and circumstances of the case and in the interest of justice and fairness to both parties, we are of the considered view that end of the justice will be met to send back the matter back to the file of the AO for denovo re-assessment on merits in accordance with law. We have observed that the assesse has not complied with the notices issued by the AO as well as ld. CIT(A) in the first round of litigation, which led to ex-parte orders. The assessee is directed to cooperate in the denovo re-assessment proceedings to be conducted by the AO , otherwise the AO shall be free to pass re-assessment order in accordance with law on merits. All the contentions are kept open, and we clarify that we have not commented on the merits of issue’s arising in this appeal. The orders of the authorities below are set aside and the matter is restored to the file of the AO for framing denovo re-assessment on merits in accordance with law after giving opportunity of being heard to the assessee. Evidences/ contentions filed by the assessee before the AO shall be admitted by the AO and shall be decided on merits in accordance with law. The appeal of the assessee is allowed for statistical purposes. We order accordingly..
In the result,the appeal filed by the assessee is allowed for statistical purposes.