BALARAM VENGADESSAN,PUDUCHERRY V. ITO, WARD-3, PUDUCHERRY

ITA 2471/CHNY/2025

AI Insights

The case involves two appeals by the assessee, Balaram Vengadessan, against the orders of the Learned Commissioner of Income Tax (NFAC), Delhi, for the Assessment Years 2012-13. The first appeal contested the addition of Rs. 21,66,450 to the assessee's income, following an ex-parte assessment order under section 144 of the Income Tax Act, due to unaccounted cash deposits. The second appeal challenged a penalty of Rs. 5,17,117 for concealment of income, which was based on the same assessment. The Tribunal found that both the assessment and the penalty were improperly confirmed without adequate opportunity for the assessee to present his case, leading to the decision to allow both appeals and remit the matters back to the A.O.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790716 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 08-09-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M. SUBASHRI; VIRTUAL
• Assessee Lawyers: S. GIRISH KUMAR
• Keywords: Set aside; Opportunity of being heard; Peak credit; Principle of natural justice
• Section: 144; 271(1)(c)

Judgement Text

"आयकर अपीलीय अिधकरण, ‘ए’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0019ी यस यस िव ने रिव, \u0011ा ियक सद एवं \u0019ी जगदीश, लेखा सद क े सम' BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.2470 & 2471/Chny/2025 िनधा ;रण वष; /Assessment Years: 2012-13 Balaram Vengadessan, No.24, 3rd Cross, Thanthai Periyar Nagar, Ellaipillaichavady, Puducherry – 605 010. PAN: AIBPV 2754K Vs. The Income Tax Officer, Ward-3, Puducherry. (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीला थG की ओर से/ Appellant by : Shri S. Girish Kumar, Advocate IJथG की ओर से /Respondent by : Shri M. Subashri, Addl. CIT(virtual) सुनवा ई की ता रीख/Date of Hearing : 20.11.2025 घोषणा की ता रीख /Date of Pronouncement : 04 .12.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid two appeals filed by the assessee for Assessment Years (AYs) 2012-13 arises out of the orders of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 25.08.2025 & 26.08.2025. Printed from counselvise.com ITA Nos.2470 & 2471/Chny/2023 Balaram Vengadesan :- 2 -: ITA No.2470/Chny/2025: 2. The A.O. has reopened the assessment for the reason that the assessee had made cash deposits amounting to Rs. 17,61,350/- in his bank account maintained with IndusInd Bank but has not filed return of income. In response to the notice, the assessee filed his return declaring a total income of Rs.40,400/-. However, the assessee did not respond to the subsequent notices issued. Therefore, the A.O., in the ex-parte order passed u/s. 144 of the Act, made an addition of Rs.21,66,450/-. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A), who dismissed the appeal observing that the assessee had neither filed the cash book nor provided any trail of withdrawals and re-deposits to support the peak theory. 3. The Ld. Authorized Representative (A.R.) submitted that the assessment order was passed ex-parte and that the Ld. CIT(A) also did not provide sufficient opportunity before dismissing the appeal. Therefore, it was prayed that one more opportunity may be granted to the assessee to substantiate his case. 4. On the other hand, the Ld. Departmental Representative (D.R.) relied on the orders of the lower authorities. Printed from counselvise.com ITA Nos.2470 & 2471/Chny/2023 Balaram Vengadesan :- 3 -: 5. We have heard the rival submissions and perused the material available on record. The assessment order in this case has been passed u/s. 144 of the Act. The Ld. CIT(A) has also not examined the cash book or bank statement before confirming the addition. Keeping in view the principles of natural justice, we are of the considered opinion that one more opportunity should be granted to the assessee to substantiate his case before the A.O. Accordingly, we set aside the impugned order and remit the matter back to the file of the A.O. for denovo assessment in accordance with law, after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to comply with all notices issued by the A.O. and to furnish all relevant details for fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes. ITA No. 2471/Chny/2025: 6. In this case, the A.O. has levied penalty u/s. 271(1)(c) of the Act amounting to Rs.5,17,117/- for concealment of particulars of income. The Ld. CIT(A) has confirmed the penalty order as quantum addition has been confirmed . 7. We note that the penalty u/s 271(1)(c) has been initiated during assessment proceeding and levied on the basis of addition made in Printed from counselvise.com ITA Nos.2470 & 2471/Chny/2023 Balaram Vengadesan :- 4 -: the assessment order. We have already set aside the assessment order, therefore penalty order based on the same assessment order has no leg to stand and does not survive. We further clarify that, since we have restored the quantum appeal to the file of the A.O. for denovo assessment, the A.O will be free to initiate fresh penalty proceeding during the set aside proceeding. Accordingly the penalty levied is cancelled and appeal is allowed. 8. In the result, both the appeals filed by the assessee are allowed. Order pronounced on 04th day of December, 2025 at Chennai. Sd/- Sd/- (यस यस िव ने रिव) (SS Viswanethra Ravi) \u0001याियक \u0001याियक \u0001याियक \u0001याियक सद\bय सद\bय सद\bय सद\bय / Judicial Member (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 04th December, 2025. EDN, Sr. P.S आदेश क\u0019 \bितिल प अ े षत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF Printed from counselvise.com "