CHANTHANCHERI SADIK,TIRUR V. ITO WARD 1 , TIRUR

ITA 254/COCH/2023

AI Insights

The case involves Chathancheri Sadik, a telecom distribution agent, who did not file a return of income for the Assessment Year 2017-18. The Assessing Officer issued a notice under section 148 of the Income Tax Act, 1961, due to a significant cash deposit of Rs. 1,19,61,090. The appellant claimed the deposit was from business receipts as an agent to Vodafone M Pesa, receiving a 1% commission. The Assessing Officer rejected this explanation, leading to a penalty under section 271AAC(1) of the Act. The Principal Commissioner of Income Tax later deleted the addition of the cash deposits, but the penalty was upheld by the CIT(A). The Tribunal's decision to remit the matter back to the Assessing Officer followed the deletion of the cash deposit addition, indicating a need for a fresh evaluation regarding the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23368 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: SHAJI PAULOSE
• Keywords: Business income
• Section: 148; 264

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI PRAKASH CHAND YADAV, JM ITA No. 254/Coch/2023 Assessment Year: 2017-18 Chathancheri Sadik .......... Appellant Chathancheri, Triprangod, Tirur 676108 [PAN: DTCPS1109G] Vs. The Income Tax Officer .......... Respondent Ward - 1, Tirur Appellant by: Shri Shaji Paulose, CA Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 09.12.2024 Date of Pronouncement: 29.01.2025 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 19.12.2023 for Assessment Year (AY) 2017-18. 2. Brief facts of the case are that the appellant was working a telecom distribution agent in the name of SR Communications of Vodaphone Recharge Coupon the EC. The assessee did not file return of income for AY 2017-18. Based on the information that the appellant made deposit of Rs. 1,19,61,090/-, a notice u/s. 148 of the 2 ITA No. 254/Coch/2023 Chathancheri Sadik Income Tax Act, 1961 (the Act) was issued by the Assessing Officer (AO) on 24.03.2021 directing the appellant to file the return of income. In response to the notice, the appellant submitted that the cash deposit was made out of business receipts as an agent to Vodafone M Pesa and the appellant is in receipt of commission to the tune of 1% only. The AO rejected this explanation stating that the petitioner could not furnish the details of source of cash deposit and there is no significant deductions from the part of Vodafone M Pesa. The AO also levied penalty worth Rs. 9,34,384/- u/s. 271AAC(1) of the Act. 3. Being aggrieved, a revision petition was filed before the Principal Commissioner of Income Tax, Kozhikode u/s. 264 of the Act, who wide order dated 20.11.2023 deleted the addition of cash deposits to the tune of Rs. 1,19,61,090/-. Subsequent to this order, the appellant filed appeal before the CIT(A) for deletion of the penalty imposed by the AO. The CIT(A) confirmed the penalty by observing that the appellant has made no effort to explain the deposits with evidence. 4. Being aggrieved, the assessee is in appeal before us in the present appeal. 5. We have heard the rival contentions of both the parties and perused the material available on record. At the outset we find that the quantum addition had been deleted by the Pr. CIT vide order 3 ITA No. 254/Coch/2023 Chathancheri Sadik dated 10.11.2023 passed u/s. 264 of the Act. Therefore, the matter is remitted back to the AO for de novo adjudication in accordance with law after affording reasonable opportunity of hearing to the assessee. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 29th January, 2025. Sd/- Sd/- (PRAKASH CHAND YADAV) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 29th January, 2025. n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "