Dipakraj Krishnamuni Marathe Vs ITO (ITAT Pune)
The appeal filed for AY 2017-18 was directed against the order of NFAC, arising from assessment order u/s 144 dated 27-12-2019. There was a delay of 468 days in filing the appeal which was condoned by Tribunal after accepting Assessee’s explanation that his consultant was unable to attend the case due to his wife’s illness & subsequent death. Relying on Collector, Land Acquisition v. Katiji (1987) 2 SCC 107 & Inder Singh v. State of M.P. (2025 INSC 382), the delay was held to be supported by reasonable cause.
On merits, Assessee had deposited ₹10.45 lakhs in cash during the demonetisation period. AO made an addition of ₹10.45 lakh to business income & treated returned income of ₹2.55 lakh as under-reported income, initiating penalty u/s 270A. CIT(A) partly allowed appeal by granting relief of ₹4.45 lakh based on earlier withdrawals but sustained balance addition of ₹6 lakh.
Before Tribunal, it was found that the cash was deposited on 08-11-2016, a day prior to commencement of demonetisation (09-11-2016), thus the very foundation of the AO’s action treating it as demonetisation-period deposit was factually wrong. Further, the Assessee demonstrated availability of cash withdrawn by himself on 05-10-2016 & by his nephew , (a farmer) from Jalgaon DCC Bank between 17-10-2016 to 04-11-2016. Tribunal held that Assessee had prima facie explained the entire cash deposit & therefore the addition of ₹10.45 lakh was unsustainable. Accordingly, the finding of CIT(A) was reversed.
