ARULDOSS JOHNSON SUGIRTHARAJ,KRISHNAGIRI V. ITO, WARD-1, , KRISHNAGIRI

ITA 69/CHNY/2025

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The case involves Aruldoss Johnson Sugirtharaj, the appellant, who contested the additions made by the Income Tax Officer, Ward-1, Krishnagiri, for the Assessment Year 2017-2018. The AO had made ex-parte additions of Rs. 19,87,000 as unexplained investment and Rs. 11,59,157 as unaccounted business income, citing cash deposits during demonetization. The CIT(A) upheld these additions ex-parte, leading the appellant to appeal to the Income Tax Appellate Tribunal. The Tribunal, considering the principles of natural justice, decided to set aside the CIT(A)'s order and remand the case back to the AO for a fresh assessment, providing the appellant an opportunity to present his case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107196 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOUTHAMI MANIVASAGAM
• Assessee Lawyers: C. KARTHICK
• Keywords: Set aside; Business income; Unexplained investment; Principle of natural justice
• Section: 144; 69

Judgement Text

"आयकर अपीलीय अिधकरण, ‘बी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI मा ननीय \u001bी मनु क ुमा र िग र, \u0011ा ियक सद! एवं मा ननीय \u001bी जगदीश, लेखा सद! क े सम( BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.69/Chny/2025 िनधा +रण वष+ /Assessment Year: 2017-18 Aruldoss Johnson Sugirtharaj, No.6/145, Infant Jesus Nagar, Elathagiri, Krishnagiri, Tamil Nadu-635 108. Vs. The Income Tax Officer, Ward-1, Krishnagiri, [PAN: AIUPJ9275A] (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीलाथ. की ओर से/ Appellant by : Shri C.Karthick, Advocate 01थ. की ओर से /Respondent by : Smt.Gouthami Manivasagam, JCIT सुनवाई की तारीख/Date of Hearing : 18.03.2025 घोषणा की तारीख /Date of Pronouncement : 25.03.2025 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member): The captioned appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 14.11.2024 for Assessment Year 2017-2018. 2. Brief facts are as under: In fact, AO made ex-parte an addition of Rs.19,87,000/- on account of cash deposits during demonetization in the assessee bank account treating as ITA No. 69/Chny/2025 :- 2 -: unexplained investment u/s 69 of the Income Tax Act, 1961 and further made an addition of Rs.11,59,157/- as unaccounted business income. Assessee further challenged the order of assessment u/s 144 of the Act before the ld.CIT(A) who proceeded ex-parte and confirmed the order of the AO on merits. Aggrieved, assessee is in appeal before us. 3. Before us, the ld. Counsel for assessee submitted that the CIT(A) has sent the three notices which were not received by the assessee, hence the assessee was prevented from appearance on the purported dates. Therefore, he prayed that the assessee may be provided an adequate and proper representation time to file evidence and documents, if any, to substantiate his explanation regarding cash deposits during demonetization and purported unaccounted business receipts. The ld.DR stated that the assessee is habitual defaulter in appearing before the appellate authority hence no lenient view is to be taken in this case and prayed for dismissal of appeal. 4. Though we concur with the submissions of Ld. Sr. DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. We also find that assessee has not represented before the ld.CIT(A) despite notices for the reasons stated above. We also note that even before AO the order is ex-parte. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. AO for denovo assessment on merits after affording proper opportunity of hearing to the assessee subject to cost of Rs.5,000/- which shall be deposited by the assessee within 30 ITA No. 69/Chny/2025 :- 3 -: days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before Ld.AO whose shall proceed for denovo assessment after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents regarding cash deposits during demonetization and purported unaccounted business receipts, if any, forthwith without any fail, failing which Ld. AO shall be at liberty to proceed with the assessment proceedings on merits as per law. The ld. counsel, who appeared through virtual mode also assured the bench that he will ensure that the assessee will prosecute his case diligently. 5. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 25th March 2025 at Chennai. Sd/- Sd/- (जगदीश) (JAGADISH) लेखा सद! / ACCOUNTANT MEMBER (मनु क ुमार िग र) (MANU KUMAR GIRI) \u0011ाियक सद! / JUDICIAL MEMBER चे\u0003ई Chennai: िदनांक Dated :25th March 2025 KB आदेश क\u0010 \b\u0011त\u0013ल\u0014प अ\u0015े\u0014षत/Copy to: 1. अपीलाथ\u0010/Appellant 2. \u0011\u0012थ\u0010/Respondent 3. आयकरआयु\u0017/CIT, Chennai/Coimbatore/Madurai/Salem. 4. िवभागीय\u0011ितिनिध/DR 5. गाड फाईल/GF "