Hemlata Kamalakar Deo Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT), Mumbai, considered an appeal filed by the assessee against the order dated 13.06.2024 passed under Section 250 of the Income Tax Act, 1961 for Assessment Year 2017-18.
At the outset, the Tribunal examined the delay in filing the appeal. The assessee, an 80-year-old senior citizen widow, filed an affidavit explaining that her late husband had earned his livelihood by performing bhikshuki services, pujas, and last rites, receiving payments only in cash. Following his death on 29.10.2014, the accumulated cash savings were inherited by her as stridhan. During demonetisation, she deposited these accumulated savings into her bank account by exchanging the old currency. Subsequently, scrutiny proceedings were initiated, culminating in an assessment under Section 144 dated 07.10.2019 making additions of Rs. 15,18,252.
The assessee further stated that she had no educational qualifications, lacked financial means to engage professional representation, and relied upon relatives for assistance in tax matters. According to the affidavit, she had not received the appellate order dated 05.10.2023 physically and became aware of it only after receiving a recovery-related call from the Income Tax Department. After her nephew accessed the income tax e-filing portal and informed her of the appellate order, she approached an advocate on a pro bono basis and thereafter filed the appeal before the Tribunal.
After considering the affidavit, the age and circumstances of the assessee, and the principles laid down by the Supreme Court in Land Acquisition Collector Vs. Mst. Katiji & Ors., the Tribunal held that where substantial justice is pitted against technicalities arising from non-deliberate delay, substantial justice should prevail. Construing the expression “sufficient cause” liberally, the Tribunal condoned the delay and admitted the appeal for hearing on merits.
On the merits, the Tribunal noted that the Commissioner (Appeals) had sustained additions primarily because the assessee had deposited Rs. 13,62,000 in her bank account during the demonetisation period but had failed to substantiate the source of the deposits. The Commissioner (Appeals), however, granted relief of Rs. 2.5 lakh considering the Government’s announcement regarding small deposits by housewives and restricted the addition to Rs. 11,21,500.
The Tribunal examined the factual background and observed that the assessee was a senior citizen widow and homemaker. Her late husband had worked as a priest and carried on bhikshuki activities for approximately 30 years. According to the assessee, after her husband’s death she depended upon the lifelong savings accumulated from those activities. Owing to old age, ill health, and concerns about medical emergencies, the cash had been retained at home and was deposited in the bank only because demonetisation required exchange of the old currency.
The Tribunal observed that income tax assessments are not based on strict rules of evidence and that preponderance of probabilities and circumstantial evidence must also be considered in determining the true income of a person. It further noted that the assessee resided in a rented room and considered it practically impossible for a widow senior citizen to have earned such a large amount during a single year. The Tribunal also observed that the cash deposited during demonetisation had not been withdrawn from the bank account, which, according to the Tribunal, supported the assessee’s explanation that the deposits represented money inherited from her husband and accumulated over several years. It further observed that even if an amount below the minimum exemption limit for the preceding seven years were considered, the assessee’s claim would be justified.
The Tribunal found that no contrary evidence had been produced by the Revenue to disprove the explanation furnished through the assessee’s affidavit. Considering the totality of the facts and circumstances, it directed the Assessing Officer to delete the additions relating to the demonetisation cash deposits.
Regarding the separate addition of Rs. 1,46,752, the Tribunal noted that Rs. 1,38,318 represented other credits in the assessee’s bank account comprising internal bank transfers from distant relatives. Since these amounts did not constitute the assessee’s income, the Tribunal held that the addition on this count was also unsustainable.
Accordingly, the Tribunal allowed the appeal and directed deletion of the additions.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal has been filed by the assessee challenging the impugned order 13.06.2024 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi / Ld. CIT(A) for the A.Y 2017-18.
2. At the very outset, we noticed that there is a delay in filing the present appeal. In this regard Ld. AR drawn our attention towards affidavit filed by the assessee, thereby seeking condonation of delay and the contents of which were reproduced here in below:
1. That I am a senior citizen aged 80 years and a widower. My spouse late Shri Kamalakar Deo was engaged in providing bhikshuki services. It was the only source of his income and our livelihood. For the services provided by my spouse, he used to receive only cash from several individuals for performing the last rites, etc.
2. That my spouse unfortunately passed away on 29th October 2014. On his demise, all his earnings which were in form of cash in hand were bestowed on me as stridhan.
3. That during the demonetization period, I had deposited all my accumulated savings, stridhan in cash which were in old currency in the bank accounts for exchange of new currency. On account of these cash deposits, income tax department had selected my case for scrutiny proceedings under section 143(3) of the Act. An assessment order dated 07.10.2019 under section 144 was passed making additions of Rs. 15,18,252/-to the income.
4. That I do not have any educational qualifications. I sought the help of my relatives and with their help I was able to file an appeal against the impugned assessment order dated 07 10.2019. I was able to submit the response in the appeal proceedings with their help only. I do not have sufficient means to appoint a counsel to handle my income tax matters. Thus, there were times when the notices or other communications issued was overlooked.
5. That the impugned appeal order dated 05.10.2023 under section 250 of the Income Tax Act, 1961 was passed by Ld. National faceless Appeal Centre, CIT(A), for A.Y. 2017-18. I had not received the impugned order physically. I had received a call from the 10799/13ncome tax department for the recovery of taxes. It was at that time, I became aware that some order was passed in my case.
6. That I requested my nephew to log-in into Income Tax e-filing portal and upon reviewing, he informed me that an order was passed against me. I with my nephew then approached an advocate on pro-bono basis and they advised me to file an appeal before the higher authorities. Hence, now I am in the process of filing the appeal before the Hon’ble Income Tax Appellate Tribunal.
7. That it was because of this reason; I could not file appeall the statutory limitation period of 60 days.
8. Hence, this affidavit is being made in support of my application Date the Hon’ble Income Tax Appellate Tribunal, Mumbai to condone the delay in filing of appeal.
3. After having heard the counsels for both the parties and considering the affidavit filed by the assessee and taking into consideration the age of the assessee and the circumstances mentioned therein and while keeping in view the principles laid down by honourable Supreme Court of India in the case of Land Acquisition Collector Vs. Mst. Katiji & Ors., [1987] AIR 1353 (SC), wherein it has been held that where ‘substantial justice’ is pitted against technicalities of non deliberate delay, then in that eventuality substantial justice is to be preferred. In our view the principles of advancing ‘substantial justice’ is of prime importance. Hence considering the explanation put forth by the assessee by justifiably and properly explaining the delay, which occurred in filing the appeal and construing the expression “sufficient cause” liberally, condone the delay in filing he appeal and hence appeal is admitted to be heard on merits.
4. Through this appeal, the assessee has challenged the additions sustained by Ld. CIT(A). In this regard, we have heard both the parties, perused the material placed on record and the orders passed by the revenue authorities.
5. From the records, we noticed that additions were sustained by Ld. CIT(A) on the ground that assessee had deposited an amount of Rs. 13,62,000/- in her bank account during the demonetisation period, but could not substantiate the source of the said deposits. However, considering the fact of announcement by Government that the small deposits made in the banks by housewife’s shall not be questioned by the department in view of the fact that exemption limit for income tax was Rs.2.5 lakhs. Therefore considering that the assessee is housewife, the additions were restricted to Rs.11,21,500/- after giving relief of Rs.2.5 lakhs to the assessee.
6. We have considered the details filed by the assessee and from the records we noticed that the assessee is a senior citizen widow and a homemaker aged about 80 years. The late husband of the assessee was a priest and was engaged in the ‘Bhikshuki activities’ and also used to perform puja and last rites rituals for the last approximately 30 years. As per the case set up by the assessee, after the death of her husband the assessee was fully dependent upon the lifelong savings which were accumulated over a period out of the said bhikshuki activities. However due to old age, ill health and fear of medical emergency, the cash receipts were kept at home. Since the demonetization scheme was brought into being. Therefore, the appellant had to exchange old currency in new currency and in this way, the entire life savings of approximately 30 years was deposited by the assessee in bank.
7. We are also of the view that income tax assessments are not based on ‘strict rule of evidences’ and ‘preponderance of probabilities’ and circumstantial evidences also needs to be taken into account to assess the true income of the person. It is also an undisputed fact brought on record that assessee is residing in a rented room and in such a circumstances it is practically impossible for a widow senior citizen to earn such a huge amount of income in one year, even otherwise the cash deposited in the bank account during the demonetisation period has not been withdrawn from the account which goes to show that it was assessee’s own money which she inherited from her husband who had accumulated over the years. Even if we calculate by taking into consideration the amount well below the minimum exemption limit for the past seven years, then also it would justify the claim of the assessee.
8. No contrary, evidence has been brought on record by the revenue to disprove the version put forth by the assessee through her affidavit therefore, considering the totality of the facts and circumstances of the present case, we direct the Ld.AO to deletion of additions.
9. Now coming to the additions of an amount of Rs.1,46,752/- is concerned. In this regard, it is an undisputed fact that amount of Rs.1,38,318/- relates to other credit in the bank account of the assessee and the said amount consist of internal bank transfers from her distant relatives. Thus the same not being income of the assessee. Therefore, the additions on this count are not sustainable.
10. In the result, the appeal filed by the assessee stands allowed.
Order pronounced in the open court on 21.03.2025.
