2020 (1) TMI 1059 - AT - Income Tax

Condonation of delay of 268 days - Sufficient cause of delay - Addition u/s 69A - unexplained investment - HELD THAT - In the present case the assessee herself is an uneducated lady staying in a rural village of Kalaburagi. She was not assisted by legal advisor. She cannot read or write and also cannot sign. This can be seen from the thump impression in the appeal papers. She was also not in a position to get timely legal assistance from a Chartered Accountant or Advocate. It was explained that she came to know about the pending appeal only on receipt of notice of outstanding demand issued by the AO, proposing levy of penalty. In my opinion, the delay is not deliberate and intentional nor due to negligence. There is a reasonable cause in filing the appeal belatedly by the assessee before this Tribunal. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. Addition u/s 69A - Appellant has not substantiated explanation as to the source of investment - HELD THAT - Before sustaining the addition, it is incumbent upon the authorities concerned to examine the contentions of the affidavit by examining the concerned parties, which the authorities failed to do. Further, the AR pleaded that the assessee sold a property of 9 acres 37 guntas in Hagarga village and he is ready to produce the relevant documents. Thus, pleaded that the assessee may be granted an opportunity to furnish the same before the lower authorities. In the interest of justice I grant the assessee an opportunity to produce the relevant sale documents before the Assessing Officer, regarding the receipt of ₹ 5 lakh from the sale of the said property. Further, the assessee has taken a plea that she has saved ₹ 20 lakh from several years and sales proceeds of agricultural land sold earlier. Thus, the assessee is directed to produce the relevant details also before the lower authorities. Accordingly, we remit the entire issue to the file of the Assessing Officer for fresh consideration. The assessee is directed to co-operative with the Department with necessary details and documents. Appeal filed by the assessee is partly allowed for statistical purposes.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Addition of ?45,00,000 under Section 69A of the Income Tax Act as unexplained income.
3. Adequacy of evidence provided by the assessee to substantiate the source of the cash deposits.

Issue-wise Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The assessee filed an appeal with a delay of 267 days, supported by an affidavit explaining the delay. The affidavit highlighted that the assessee, an uneducated agriculturist residing in a rural village, was not assisted by a legal advisor and could not read or write, which contributed to the delay. The Departmental Representative opposed the condonation of delay. However, the Tribunal acknowledged the reasonable cause for the delay, noting that it was neither deliberate nor intentional. The Tribunal emphasized that substantial justice should be preferred over technical considerations and consequently condoned the delay, admitting the appeal for merits consideration.

2. Addition of ?45,00,000 under Section 69A of the Income Tax Act:
The assessee deposited ?45,00,000 in her savings bank account in October 2011. The Assessing Officer (AO) reopened the case under Section 147, issuing a notice under Section 148. Despite multiple opportunities provided, the assessee failed to furnish satisfactory explanations or documentary evidence for the cash deposits. Consequently, the AO treated the deposits as unexplained income under Section 69A and completed the assessment under Section 144 read with Section 147.

3. Adequacy of Evidence Provided by the Assessee:
The assessee claimed that the cash deposits were sourced from her sons' savings, advance against land sale, and accumulated agricultural income. Affidavits from her sons were submitted, stating that they had given her substantial amounts from their respective savings. However, the CIT(A) found these explanations unsatisfactory due to the lack of specific details about land holdings, the identical nature of the affidavits, and the absence of corroborative evidence. The CIT(A) upheld the AO's addition of ?45,00,000 as unexplained income.

Upon appeal to the Tribunal, it was noted that the affidavits were not verified by the Department. The Tribunal opined that the authorities should have examined the contentions of the affidavits by verifying the concerned parties. Furthermore, the assessee's representative indicated readiness to produce relevant sale documents for the land and other details. In the interest of justice, the Tribunal granted the assessee an opportunity to provide the necessary documents and remitted the issue back to the AO for fresh consideration. The assessee was directed to cooperate with the Department by furnishing the required details and documents.

Conclusion:
The Tribunal condoned the delay in filing the appeal and remitted the case back to the AO for fresh consideration, allowing the assessee to present additional evidence to substantiate the source of the cash deposits. The appeal was partly allowed for statistical purposes.