CHIDAMBARAM NARAYANAN, COIMBATORE V. DCIT, NON CORPORATE CIRCLE-2, COIMBATORE

ITA 8/CHNY/2023

AI Insights

The case involves Chidambaram Narayan, the proprietor of M/s Sri Saastha Constructions, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The dispute centered on the addition of Rs. 50,00,000 to the assessee's income for the assessment year 2012-13, alleged to be unaccounted cash received from M/s TVS Energy Resources Pvt. Ltd. The Assessing Officer had added this amount to the assessee's income as it was not reflected in the books. The CIT(A) upheld this decision. However, the Tribunal found procedural lapses in the assessment process, particularly the simultaneous issuance of a show-cause letter and completion of the assessment, leading to the remittance of the case back to the Assessing Officer for a fresh examination.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135109 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 11-06-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 03-01-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 148; 143(3); 142(1); 143(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘सी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी वी. दुगाŊ राव, Ɋाियक सद˟ एवं ŵी जी. मऺजुनाथा, लेखा सद˟ के समƗ । Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No.8/Chny/2023 िनधाŊरण वषŊ/Assessment Year: 2012-13 Chidambaram Narayan, 63, G1, Sarojini Street, Ram Nagar, Coimbatore 641 009. [PAN: ABWPN4200E] Vs. The Deputy Commissioner of Income Tax, Non Corporate Circle -2, Coimbatore. (अपीलाथŎ /Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri G. Baskar, Advocate ŮȑथŎ की ओर से/Respondent by : Shri P. Sajit Kumar, JCIT सुनवाई की तारीख/ Date of hearing : 12.06.2023 घोषणा की तारीख /Date of Pronouncement : 21.06.2023 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 23.11.2022 for the assessment year 2012-13. 2. Facts are, in brief, that in the assessment order, the Assessing Officer has noted as under: The assessee, Shri. Chídambaram Narayanan, is the proprietor of M/s Sri Saastha Constructions, a sub-contractor to M/s. TVS Energy Resources Pvt., Ltd., filed the return of income for the AY2012-13 on 01.10.2012 by admitting total income of Rs.57,32,434/-. I.T.A. No. 8/Chny/23 2 2. Later, an information was received from DCIT(Inv.), Unit-II(2), Pune vide letter No.PN/DDIT/INV./UNIT-ii(2)WIL Search/2012-13/158 dated 06.06.2013, which revealed that Ms Sri Saasthaa Construction had received unaccounted cash payment of Rs.50,00,000/- from Ms TVH Energy, during the financial year 2011-12. As this accounts were not found recorded in the books of the assessee, notice u/s 148 was issued to the assessee after getting the approval of Principal Commissioner of Income tax -1, Coimbatore. 3. In response to the Notice, the assessee filed the return of income on 06.11.2019 by admitting Rs.57,32,434/- as total income. Notice us 143(2) was issued on 30.11.2019. Subsequently, Notice u/s 142(1) was issued on 30.11.2019 calling for various details. 4. The ledger account details of M/s TVH Energy Resource Private Limited maintained in the books of accounts of M/s Sri Sasthaa Construction furnished by the assessee was verified and it is seen that the receipt of Rs.50,00,000/- is not reflected in the Ledger account. 5. In the letter of the DDIT(Inv.), it has been mentioned that the cash payment to one of these parties M/s RR Thulasi Builders is also corroborated as per impounded page no.96 of bundle no.3, impounded from M/s TVH Energy and the payments were made in F.Y.2011-12. Hence, the cash payment has been confirmed. Further, these payments recorded in cash in the impounded materials, were considered for assessment in the hands of M/s TVH Energy Resource P. Ltd also. Since, the cash receipt is not reflected in the books of accounts of the assessee the cash receipt of Rs.50,00,000/- received by M/s Sri Sasthaa Construction from M/s TVH Energy Resources P. Ltd is added to the total income of the assessee.” 3. On appeal, the ld. CIT(A) confirmed the assessment order passed by the Assessing Officer. 4. On being aggrieved, the assessee carried the matter in appeal before the Tribunal. When the appeal was taken up for hearing, the ld. Counsel for the assessee has submitted that Shri Chidambaram Narayanan is the proprietor of M/s. Sri Saastha Constructions, a sub- contractor to M/s. TVS Energy Resources Pvt. Ltd. The allegation of the I.T.A. No. 8/Chny/23 3 Assessing Officer was that the assessee has received unaccounted cash payment of ₹.50 lakhs from M/s. TVS Energy Resources Pvt. Ltd. during the financial year 2011-12. It was further submission that by observing that the receipt of above amount was not reflected in the books of the assessee, the Assessing Officer added the entire amount in the hands of the assessee. He has also pointed that in the assessment order, the Assessing Officer has not mentioned anywhere when the assessee has received the above amount. The assessment order speaks about financial year 2011-12 and submitted that the Assessing Officer has not examined the issue properly and prayed that the issue may be remitted back to the Assessing Officer to consider afresh in accordance with law. 5. On the other hand, the ld. DR has not raised any objection. 6. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In the assessment order, the Assessing Officer has mentioned that the assessee has received unaccounted cash payment of ₹.50 lakhs from M/s. TVS Energy Resources Pvt. Ltd. during the financial year 2011-12. However, the Assessing Officer has not specified anywhere in the assessment order as to when the above amount has been received by the assessee. On perusal of the appellate order, we find that the I.T.A. No. 8/Chny/23 4 Assessing Officer issued show-cause letter dated 28.12.2019 calling details/explanation on or before 30.12.2019. However, the Assessing Officer has completed the assessment order under section 143(3) r.w.s. 147 of the Act dated 28.12.2019, which is on the very same day of issuing show-cause letter to the assessee. The ld. CIT(A) has also not considered the above facts. Under the above facts and circumstances of the case, we set aside the appellate order and remit the matter back to the file of the Assessing Officer with a direction to examine the records and decide the issue afresh in accordance with law by affording an opportunity of being heard to the assessee. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 21 st June, 2023 at Chennai. Sd/- Sd/- (G. MANJUNATHA) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, the 21.06.2023 Vm/- I.T.A. No. 8/Chny/23 5 आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant, 2.ᮧ᭜यथᱮ/ Respondent, 3. आयकर आयुᲦ/CIT, 4. िवभागीय ᮧितिनिध/DR & 5. गाडᭅ फाईल/GF.