Consultant Failed Him’: ITAT remands ₹18.5L Income Tax Addition on Differently Abled Taxpayer, Condones 600+ days Delay [Read Order]
Considering the assessee’s condition, the delay in filing the appeal before CIT(A) was not intentional, and the failure to respond at the assessment stage also deserved leniency.
The Income Tax Appellate Tribunal ( ITAT ), Ahmedabad bench, has remanded a matter of a ₹18.55 lakh income tax addition made against a 60% differently-abled taxpayer, after finding that the assessee was unable to respond to statutory notices due to physical limitations and the failure of his tax consultant.
The assessee, Rameshbhai Jashubhai Patel, filed his return for AY 2016-17 declaring an income of ₹2,33,090. Based on investigation inputs, reassessment proceedings under Section 147 were initiated, and a notice under Section 148 dated 18 March 2019 was issued.
However, the assessee did not respond to the notices. The Assessing Officer, finding no explanation, treated cash deposits of ₹18,55,500 in his HDFC Bank account as unexplained income under Section 69.
On appeal, the CIT(A) dismissed the case without hearing the assessee, citing a delay of 621 days in filing the appeal. The assessee’s explanation for the delay was never considered on merits.
Before the bench of Suchitra Kamble (Judicial member), the assessee argued that he is 60% handicapped, dependent on others for daily activities, and was completely unaware of procedural requirements.
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His authorised representative, S V Agarwal and Divya Agarwal submitted that the assessee relied on an incompetent consultant who failed to file responses before the AO and also did not guide him appropriately regarding the appeal process. As a result, both the assessment and appellate orders were passed ex parte.
The AR pointed out that in the assessee’s own earlier assessment years 2012-13, 2013-14 and 2015-16, the Tribunal had shown leniency by remanding similar matters where procedural lapses were not attributable to the assessee.
The Departmental Representative defended the orders, submitting that the assessee had repeatedly failed to respond and the addition was justified.
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The Tribunal considered the assessee's physical disability and dependence on others, noting that such individuals often lack awareness of legal processes and depend on others, including consultants.
The ITAT noted that the consultant engaged by the assessee “did not follow the procedure properly,” which resulted in ex-parte orders at both stages. It was held that considering the assessee’s condition, the delay in filing the appeal before CIT(A) was not intentional, and the failure to respond at the assessment stage also deserved leniency.
The appellate tribunal stated that the principles of natural justice require the taxpayer to be provided an opportunity to present evidence explaining the cash deposits. Accordingly, the appellate tribunal set aside both the assessment and the appellate orders.
The bench remanded the matter back to the Assessing Officer for fresh adjudication. The AO has also directed to verify all evidence submitted by the assessee and pass an order on merits, after granting a proper opportunity of hearing.
Additionally, the assessee’s representative gave an undertaking before the Tribunal that all future follow-up before the tax authorities will be done diligently.
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