2024 (11) TMI 79 - AT - Income Tax

Belated filing of the appeal before the CIT(A)-NFAC - assessee has explained before the Ld. CIT(A)-NFAC that the delay was due to his illness with Bipolar disorder for which treatment is being taken from 2017 onwards and as his residence in USA, he could not attend the notices and also could not file the appeal against the assessment order within the prescribed period HELD THAT - CIT(A)-NFAC rejected the assessee s submissions and denied the explanation for condonation of delay. Considering the facts and circumstances of the case and also consider the health condition of the assessee, we are inclined to condone the delay of 351 days and hereby remit the matter back to the file of Ld. CIT (A)-NFAC in order to consider the appeal afresh and decide the case on merits by providing one more opportunity to the assessee of being heard in accordance with the principles of natural justice. At the same breath, we also hereby caution the assessee to promptly co-operate before the CIT (A)-NFAC in the proceedings failing which the CIT(A)-NFAC shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Appeal filed by the assessee is allowed for statistical purposes.

Issues:
1. Condonation of delay in filing the appeal before the Tribunal.
2. Assessment of income based on unexplained cash deposits during demonetization period.
3. Penalty imposition under section 271AAC for underreporting of income.
4. Dismissal of appeal by Ld. CIT(A)-NFAC without condoning the delay of 351 days in filing the appeal.
5. Consideration of submissions regarding health issues and Power of Attorney in condonation of delay.

Analysis:

Issue 1: Condonation of delay in filing the appeal before the Tribunal
The appellant filed a petition for condonation of delay of 11 days in filing the appeal before the Tribunal due to the health condition of his brother, to whom he had given Power of Attorney. The Tribunal, after considering the explanation provided by the appellant, condoned the delay, deeming it a reasonable and sufficient cause.

Issue 2: Assessment of income based on unexplained cash deposits
The appellant's income was assessed under section 69A of the Income Tax Act, 1961, due to unexplained cash deposits during the demonetization period. The assessing officer treated the cash deposits as income from unexplained sources, resulting in an assessed income higher than the declared income.

Issue 3: Penalty imposition under section 271AAC
Penalty proceedings were initiated under section 271AAC for underreporting of income. The assessing officer levied a penalty of Rs. 1,45,860, which was challenged by the appellant before the Ld. CIT(A)-NFAC.

Issue 4: Dismissal of appeal by Ld. CIT(A)-NFAC
The Ld. CIT(A)-NFAC dismissed the appellant's appeal without condoning the delay of 351 days in filing the appeal. The appellant raised grounds of appeal challenging the dismissal on technical grounds and deprivation of substantial justice.

Issue 5: Consideration of health issues and Power of Attorney in condonation of delay
The Tribunal, upon review, found that the Ld. CIT(A)-NFAC did not adequately consider the appellant's submissions regarding health issues and the Power of Attorney in relation to the delay in filing the appeal. The Tribunal, considering the health condition of the appellant, remitted the matter back to the Ld. CIT(A)-NFAC for a fresh consideration, emphasizing the principles of natural justice.

In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the Ld. CIT(A)-NFAC to reconsider the appeal afresh, providing the appellant with an opportunity to be heard. The appellant was cautioned to cooperate promptly, failing which appropriate orders would be passed based on the available record.

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