CIT(A) cannot dismiss Income Tax Appeal on Limitation Grounds after Condoning Delay: ITAT [Read Order]

The Bangalore Bench of Income Tax Appellate Tribunal( ITAT ) ruled that the CIT(A) cannot dismiss an income tax appeal on limitation grounds after condoning the delay.

Kyalasanahalli Narayanappa Subramani,the appellant-assessee, an individual engaged in agricultural activities and aged about 52 years, faced an assessment under Section 143(3) of the act. The Assessing Officer(AO) added Rs. 75,44,398 as an unexplained cash credit under Section 68 of the Act.

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The assessee filed an appeal with the Commissioner of Income Tax (Appeals)[CIT(A)] 99 days late, and the CIT(A) dismissed the appeal due to this delay. Challenging the dismissal the assessee filed an appeal before the tribunal.

The Authoritative Representative (AR) of the assessee at the time of hearing had submitted a paper book containing a synopsis, hearing notices from the CIT(A), and the Income Tax Return (ITR) for the assessment year 2016-17.

The AR explained that the agriculturist assessee, unfamiliar with modern technology, had missed e-mails and SMSs. Despite the CIT(A) initially condoning the delay, the final order rejected the appeal as time-barred. The AR argued that since the agricultural income was reported in the return, the additional assessment under Section 68 was unjustified.

Section 68 of the Act requires taxpayers to explain the source of any unexplained cash credits. If the explanation is unsatisfactory, the amount is treated as taxable income.

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The tribunal, on reviewing the submissions made by both parties, contended that the CIT(A) had condoned the 99-day delay but inconsistently dismissed the appeal on limitation grounds. It determined that the assessee's claim of being uneducated and unable to verify e-mails was reasonable.

The bench set aside the CIT(A) order and directed a fresh review on merits with a personal hearing.

The two member bench comprising Soundararajan K(Judicial Member) and Waseem Ahmed (Accountant Member) allowed the appeal filed by the assessee.

To Read the full text of the Order CLICK HERE

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