2020 (6) TMI 297 - AT - Income Tax

Condonation of delay - order of the ld. CIT(A) was not received by the assessee but the same was served upon some other person of the same name as of assessee of the village - HELD THAT - Delay in filing the appeal has been explained by the assessee due to the misdelivery of the impugned order to some other person. The assessee has also filed an affidavit in support of the application for condonation of delay. We are satisfied with the explanation of the assessee for the delay of 60 days in filing the present appeal. Accordingly, in the facts and circumstances of the case and in the interest of justice, the delay of 60 days in filing the appeal is condoned. Ex parte order u/s 144 - undisclosed cash deposits - HELD THAT - In the facts and circumstances of the case where the A.O. has made addition of the entire cash deposited in the bank account without examining the source being the sale proceeds as well as trading addition made for want of production of books of account and further the ld. CIT(A) has not decided the issue on merits, therefore, we are of the considered view that the matter is required to be reconsidered by conducting a proper verification and enquiry at the level of the A.O. of the evidences and books of account as produced by the assessee before this Tribunal. Accordingly, we set aside the matter to the record of the A.O. for adjudication of the same afresh after considering the documentary evidence produced by the assessee. Needless to say, the assessee be given appropriate opportunity of hearing before passing the order - Appeal of the assessee is allowed for statistical purposes only.

Summary

Issues:
Condonation of delay in filing appeal due to misdelivery of impugned order, Ex parte order passed by AO and CIT(A), Addition of cash deposits in bank account, Addition under Section 145(3) for GP rate discrepancy, Request for setting aside the matter for fresh consideration.

Condonation of Delay:
The appeal was filed with a delay of 60 days, attributed to misdelivery of the impugned order to another person with a similar name as the assessee. The assessee explained the delay was unintentional, supported by an affidavit. The DR objected, citing the assessee's history of non-compliance. The Tribunal accepted the explanation, condoned the delay, and emphasized the interest of justice.

Ex Parte Orders:
The AO passed an ex parte order under Section 144 due to the non-appearance of the assessee. The CIT(A) also passed an ex parte order, dismissing the appeal summarily. The AR argued that compliance was made, but the power of attorney was not filed, leading to the ex parte order. The Tribunal noted that the assessment order was not based on the examination of books of account, and the CIT(A) did not decide on merits. Consequently, the matter was set aside for fresh consideration.

Addition of Cash Deposits:
The AO added cash deposits in the bank account as income, alleging it was out of sales made by the assessee. The AR contended that the deposits were proceeds from cement sales, duly recorded in audited books. The rejection of books without specific defects and the trading addition without proper basis were challenged. The Tribunal found the addition unsustainable without proper examination of the books.

Addition under Section 145(3):
The AO invoked Section 145(3) to add an amount based on a higher GP rate than declared by the assessee. The AR argued that the rejection of audited books without specific defects was unjustified. The Tribunal found the addition not sustainable without proper basis and examination of the books.

Request for Setting Aside:
The AR requested setting aside the matter for fresh consideration by the AO, emphasizing the proper verification of books of account and documentary evidence. The DR opposed, citing non-compliance by the assessee. The Tribunal set aside the matter for reevaluation, ensuring the assessee's right to a fair hearing.

In conclusion, the Tribunal allowed the appeal for statistical purposes only, setting aside the matter for fresh consideration by the AO after proper verification and examination of the documentary evidence and books of account provided by the assessee. The decision highlighted the importance of fair adjudication and examination of evidence in tax matters.