In a recent ruling, the Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) condoned a delay of 244 days and restored the ex-parte order to the AO for fresh adjudication due to the genuine hardships faced by the assessee.
In this case, the assessee had appealed against the ex-parte orders passed by the Commissioner of Income Tax ( Appeals ) [ CIT( A ) ] which upheld the additions made under Section 69A of the Income Tax Act, 1961 made by the assessing officer ( AO ) for the assessment year ( AY ) 2017-18.
The assessee is a 71 year old milk distributor with limited educational background and a lack of familiarity with legal and tax matters. The assessee’s income tax matters were initially handled by a consultant who registered the e-filing account using their own email for official communications.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
During the demonetization period, cash deposits of Rs. 12,55,100 were made in the assessee’s bank account, with total deposits for the year aggregating to Rs. 66,23,500. The AO issued multiple notices under Sections 142(1) and 144 of the Income Tax Act, requiring the assessee to file returns and explain the sources of these deposits. However, the consultant failed to respond or appear before the AO.
The AO completed the assessment ex parte under Section 144 of the Income Tax Act, treating the deposits as unexplained income under Section 69A and taxing them at 60% under Section 115BBE of the Act. The AO assessed the total income at Rs. 66,23,500 and initiated penalty proceedings under Sections 271AAC, 272A(1)(d), and 271F of the Income Tax Act for non-compliance.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The assessee requested to condone the delay of 244 days in filing the appeal, and the assessee’s counsel contended that the assessee’s tax credentials were registered in the consultant’s email ID and that although the assessee had sent the physical copies of notices promptly, the consultant failed to act.
The counsel on behalf of the assessee established the lack of knowledge of the appellant on tax proceedings and submitted that the assessee did not have access to the notices due to his dependence on the consultant and his limited technological literacy.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
The bench after going through the submissions made by the parties, observed that there was a bona fide reason on the part of the assessee and condoned the delay of 244 days.
The ITAT noted that the assessee was facing genuine hardships.
The bench comprising Suchitra Kamble ( Judicial Member ) and Makarand V. Mahadeokar ( Accountant Member ) set aside the ex-parte order passed by the CIT( A ) and restored the matter to AO for fresh adjudication.
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