IN THE INCOME TAX APPELLATE TRIBUNAL “B’’BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.2547/Bang/2024 Assessment Year : 2017-18 Sha Pratapchand Pukhraj and Company C/o Shri S. Parthasarathi, Advocate No.3/1, ‘Pranava Complex’ PCIT Vs.

5th Cross, Malleswaram Hubballi Bangalore 560 003 PAN NO :AADFS9212M APPELLANT RESPONDENT Appellant by : Smt. Pratibha R., A.R.

Respondent by : Sri Subramanian S., D.R.

Date of Hearing : 18.06.2025 Date of Pronouncement : 15.09.2025

O R D E R

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of ld. PCIT, Hubli dated 25.3.2022 vide DIN & Order No.ITBA/REV/F/REV5/2021-22/1041507523(1) passed u/s 263 of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2017-18.

2. The assessee has raised the following grounds of appeal:

3. At the outset, there is a delay of 937 days in filing the appeal before this Tribunal. Before us, the ld. A.R. of the assessee drew our attention to an affidavit in original dated 6.3.2025 filed by the assessee stating therein the reasons for delay in filing the appeal, which are reproduced below for ease of convenience and reference:

4. We are of the considered opinion that u/s 253(5) of the Act, the Tribunal may admit the appeal filed beyond the period of limitation where it has established that there exists a sufficient cause on the part of the assessee for not presenting the appeal within the prescribed time. The explanation, therefore, becomes relevant to determine whether the same reflects sufficient and reasonable cause on the part of the assessee in not filing the appeals within the prescribed time. We have perused the above Affidavit along with the copy of the Order dated 05/12/2024 of the ITAT, Panaji Bench, Panaji filed by the assessee to justify the delay and having heard learned counsel for the respective parties, it is perceived that the explanation offered in the condonation application as well as in affidavit is plausible and sufficient cause being shown by the assessee, which prevented them from filing the appeal within the specified period u/s 253 of the Act and accordingly we inclined to condone the delay and admit the appeal for adjudication.

5. Now the brief facts of the case are that the ld. PCIT on examination of records noted that the assessee firm had deposited cash in SBNs of Rs.55,00,000/- during the demonetization periods in its current bank account. During the course of assessment proceedings, the assessee firm claimed that the cash deposits of Rs.55,00,000/- in SBNs was made out of sale proceeds of the firm. The ld. PCIT is of the opinion that the AO did not conduct necessary investigation into the assessee’s claim which is contrary to the admission of unexplained cash deposits, during inquiry by the ld. ADIT(Inv.) Further, the AO failed toverify closing balance as on 08.11.2016 and did not inquire into the source of SBNs of Rs.55,00,000/-. The AO has accepted the explanation of the assessee without making any enquiry and thus the order passed by the AO is erroneous and prejudicial to the interest of revenue and hence show cause notice was issued on 14.03.2022 giving the assessee an opportunity to explain why the assessment order be not revised u/s. 263 of the Act.

5.1 In the opinion of the ld. PCIT, the assessee has failed to furnish any satisfactory explanation regarding the sources of cash deposited in the bank accounts during the demonetization period not only during the assessment proceedings but even in response notice u/s. 263 of the Act and accordingly the ld. PCIT held that the amount of unexplained cash deposits should have been added to the income of theassessee. Considering these facts, the ld. PCIT held that the assessment order is erroneous and prejudicial to the interest of revenue interms of section 263 of the Act and accordingly set-aside the assessment order and directed the AO to the make the fresh ass