KAMALAKANNAN, THIRUVANNAMALAI V. ITO,WARD-1, THIRUVANNAMALAI

ITA 134/CHNY/2023

AI Insights

The case involves an appeal by the assessee, Kamalakannan, against the order of the Commissioner of Income Tax (Appeals), which upheld the assessment made by the Income Tax Officer under section 144 of the Income Tax Act, 1961. The assessment was based on unexplained cash deposits of Rs. 11,00,750/- in the assessee's bank account during the demonetization period. The assessee argued that these deposits were from legitimate sales of milk, documented in the financial records. The initial appeal was dismissed due to non-cooperation from the assessee, but the Tribunal decided to remit the case back to the A.O. for a detailed examination of the source of the deposits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134720 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-03-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 02-02-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 144; 69A

Judgement Text

आयकर अपीलीय अिधकरण, ‘ए/एस एम सी’’ यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A/SMC’ BENCH: CHENNAI ी महावीर सह, उपा य के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND आयकर अपील सं./ITA No.134/Chny/2023 िनधा रण वष /Assessment Year: 2017-18 Kamalakannan, No.20, Po Gopuram, 1 st Street, Tiruvanamalai – 606 601. [PAN: CDYPK-6922-N] Vs. The Income Tax Officer, Ward-1, Tiruvannamalai. ( अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/ Appellant by : Shri Abhishek Murali, Advocate यथ क ओर से /Respondent by : Shri S. Chandrasekaran, JCIT सुनवाई क तारीख/Date of Hearing : 09.03.2023 घोषणा क तारीख /Date of Pronouncement : 09.03.2023 आदेश / O R D E R This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [CIT(A)] in Appeal No.CIT(A), Chennai/13/10340/2019-20 dated 23-03-2022. The Assessment was framed by Income Tax Officer, Ward-1, Tiruvannamalai for the relevant A.Y. 2017-18 vide order dated 04.12.2019 u/s. 144 of the Income Tax Act, 1961 (hereinafter ‘the Act’). ITA No.134/Chny/2023 :- 2 -: 2. At the outset, it is noticed that this appeal is time barred by 257 days. The facts are that the order of CIT(A) dated 23.03.2022 was received by the assessee on 23.03.2022 and the appeal should have been filed on or before 21.05.2022, but actually appeal was filed only on 03.02.2023. Thereby, there is a delay of 257 days. The assessee has filed a condonation petition along with affidavit stating that although the assessee has not received but his Chartered Accountant whose e-mail ID was given has received the order, but the Chartered Accountant was not reachable to assessee and hence, he was unable to know the status of the appeal till the demand notice was received from the Department. The assessee given the following reasons for condonation: “2. I state that the respected Commissioner of Income Tax (Appeals) had passed an order dated 23/03/2022 which was not received by me. I state the appeal against the order ought to have been filed before the Hon'ble Income Tax Appellate Tribunal within 60 days, i.e. on or before 22/05/2022. 3. I state that no communication was received by me. I was unaware of the fact that an Order was passed. The AR representing me is not reachable and I was unable to know the status of the appeal till we recently received a demand notice. 4. I state that upon recent reference to our counsel, M/s. Victor Grace & Co., Chartered Accountants, for regularizing the issue by proper appeal against the impugned order, the appeal was filed on 3/2/2023 resulting in a delay of 257 days.” 3. When it was pointed out to the Ld. counsel for the assessee that once the Chartered Accountant of the assessee gave his e-mail address, it is the duty of the Chartered Accountant to inform the ITA No.134/Chny/2023 :- 3 -: assessee and it is totally wrong practice that the Chartered Accountants giving their e-mail address but not informing the assessee on time. It is a mistake on the part of the assessee also that they did not give an e-mail address, because it is they who have to suffer for the irresponsibility of the Chartered Accountant. This statement was made by assessee's Chartered Accountant representing now before the Bench. Going by the entirety of facts, I am inclined to condone the delay subject to a payment of cost of Rs.20,000/- to the Tamil Nadu State Legal Services Authority at Hon'ble High Court of Madras. In term of the above, I condone the delay and admit the appeal for adjudication. 4. It was pointed out by Ld. counsel for the assessee that the order of CIT(A) is exparte and even the assessment order is passed u/s. 144 of the Act practically exparte. The issue in this appeal of assessee is cash deposit of Rs. 11,00,750/- in assessee's bank account during demonetization period being SBNs. The Ld. counsel for the assessee stated that the assessee was carrying on dealership with Hutson Agro Service in the name and style of M/s. Janani Milk Centre, stating that the cash deposits made during the demonetization period were out of sale proceeds, whereas Rs. 1,89,57,977/- has been shown in the sales for the F.Y 2016-17. ITA No.134/Chny/2023 :- 4 -: 5. The A.O required the assessee to explain the cash deposit. He stated that the cash is out of the sales mode, but no evidence whatsoever was produced. Hence, the A.O treated the cash deposit in the assessee's bank account during demonetization period as unexplained money u/s. 69A r.w.s 115BBE of the Act. Aggrieved, the assessee preferred appeal before the CIT(A), The CIT(A) allowed many opportunities which is recorded in para 4 as under: “4. During the course of appellate proceedings, the opportunity of being heard was given to the appellant vide this office notice dated 12.01.2021, 07.01.2022, 18.01.2022, 02.02.2022, 28.02.2022, 11.03.2022 and 16.03.2022. The appellant has thus failed to avail the opportunities provided by this office to furnish explanation/submission in support of its contentions. In view of the said non submission of explanation, the appeal is decided on the facts and material available on record assuming that the appellant has nothing to submit in the matter.” As the assessee was non-cooperative and not appearing, he dismissed the appeal by passing a speaking order based on material available on record. Aggrieved, now the assessee is in appeal before the Tribunal. 6. I have heard the rival contentions and gone through the facts and circumstances of the case. Admittedly, the assessee is a totally non-cooperative person, and he deserves no sympathy, but in the interests of justice and to decide the substantial issue whether the cash deposit of Rs. 11,00,750/- is out sale proceeds of milk, the matter has to be remitted back to the file of A.O. ITA No.134/Chny/2023 :- 5 -: 7. The A.O is directed to verify what is the cash balance available as on 08.11.2016 and whether the alleged cash deposit in the bank account of Rs. 11,00,750/- was available with the assessee out of sale proceeds of sale before 08.11.2016 or not. The A.O will also examine the cash sales made vis-à-vis deposit of money on dealership with Hutson Agro Service, which is arising out of daily sales. The A.O will examine these two issues and will decide whether the cash deposit during demonetization period amounting to Rs.11,00,750/- is explained or not. In term of the above, the appeal of the assessee is allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 09 th of March, 2023. Sd/- (महावीर िसंह) (Mahavir Singh) उपा / Vice President चे ई/Chennai, दनांक/Dated: 09-03-2023 EDN/- आदेश क ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant 2. थ /Respondent 3. आयकर आयु /CIT 4. िवभागीय ितिनिध/DR 5. गाड फाईल/GF