Tax Consultant’s Negligence and Rural Location Causes 253-Day Appeal Delay: ITAT Remands Cash Deposit Case for fresh Adjudication [Read Order]

The Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) has condoned a delay of 253 days in filing an appeal and observed that the delay was due to the assessee’s location in a backward rural area and the negligence caused by its tax consultant.

The appellant-assessee, Primary Agricultural Credit Co-operative Society Ltd., had filed the appeal against the order dated 21.08.2024 passed by the National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2018-19.

The assessee explained in the petition for condonation of delay that the Chief Executive Officer (CEO), Board of Directors and staff had no knowledge of income tax law or procedures and were entirely dependent on a local tax practitioner, Mr. Balachandra. However, in January 2025, the practitioner shifted to Mumbai without any intimation and became untraceable.

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The assessee remained unaware that its appeal before the CIT(A) had been dismissed until it received a notice from the Principal Commissioner of Income Tax(PCIT), who rejected their stay application for a tax demand of ₹7.29 crores.

The Tribunal noted that the delay was not deliberate or intentional but due to situations which are beyond the control of the assessee.

The assessee also opposed the addition of ₹4.63 crore as unexplained money under section 69A of the Act. The assessee contended that the amount represented in the repayments of Kisan Credit Card (KCC) loans by its agriculturist members to CDCC Bank has been through the society’s account. However, the return of income was not filed despite notices under sections 148 and 142(1).

The assessee had also failed to respond to notices during the appellate proceedings before the CIT(A), leading to dismissal of the appeal, but the assessee submitted that it was unable to participate effectively in earlier proceedings due to negligence of its tax consultant.

The bench comprising Waseem Ahmed (Accountant Member) and Keshav Dubey (Judicial Member) held that it was just and proper to restore the matter to the Assessing Officer (AO) for fresh adjudication. The assessee was directed to cooperate fully and provide all necessary evidence and explanation.

The assessee was represented by Mahesh R Uppin, while Shri Subramanian S appeared for the Revenue.

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