JAYAKUMAR,KANCHIPURAM V. ITO, WARD-1, KANCHIPURAM

ITA 73/CHNY/2025

AI Insights

The case involves Shri Jayakumar, an individual dealer of Airtel recharge services, who appealed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18. The AO had made an ex-parte assessment order adding Rs. 50,000 as unexplained cash deposits during the demonetization period and Rs. 10,28,048 as business income on an estimated basis. The CIT(A) confirmed the AO's order ex-parte. The assessee, represented by Mr. V. Padmanabhan, C.A., argued that he did not receive notices from the CIT(A), preventing his appearance. The Departmental Representative opposed leniency due to the assessee's default in appearing before the appellate authority.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29895 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2025
• 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: V. PADMANABHAN; C.A
• Keywords: Set aside; Business income; Principle of natural justice
• Section: 144; 69A

Judgement Text

" आयकर अपीलीय अिधकरण, ‘बी’ \u000fा यपीठ, चे\u0014ई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘B’ BENCH, CHENNAI \u0016ी मनु क ुमा र िग\u001bर ,\u000fा ियक सद एवं \u0016ी जगदीश , लेखा सद क े सम& BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.73/Chny/2025 (िनधा\u0005रण वष\u0005 / Assessment Year: 2017-18) Shri Jayakumar 12-A/H1, Sheikpet South Street, Kanchipuram-631 501. Vs The Income Tax Officer, Ward-1, Kancheepuram. PAN : ALGPJ-1325-D (अपीलाथ\u000f/Appellant) (\u0010\u0011यथ\u000f/Respondent) अपीलाथ\u000fक\u0014ओरसे/ Appellant by : Mr.V.Padmanabhan, C.A \u0010\u0011यथ\u000fक\u0014ओरसे/Respondent by : Smt. Gouthami Manivasagam, JCIT सुनवाईक\bतारीख/Date of hearing : 18.03.2025 घोषणाक\bतारीख /Date of Pronouncement : 24.03.2025 आदेश आदेश आदेश आदेश / O R D E R PER MANU KUMAR GIRI, JM: 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 14.12.2022 for Assessment Year 2017-18. 2. The registry has noted delay of 682 days in filing the respective appeal. Considering the covid-19 pandemic and also reasons stated in the affidavit by the Assessee, we condone the delay and treat the reasons as ‘sufficient cause’ and admit the appeal for adjudication. 3. Brief facts are as under: The assessee is an individual, who is a dealer of airtel recharge services earning commission income. The assessee has not filed any return of income for the year under consideration. It is noticed that during demonization period, assessee had made cash deposits. Therefore, the AO sent notices u/s.142(1) & 142 of the Act to the assessee, but assessee failed to respond to the same. In fact, AO 2 ITA No. 73/Chny/2025 made ex-parte assessment order by making an addition of Rs.50,000/- on account of cash deposits during demonetization in the assessee bank account treating as unexplained cash deposits u/s 69A of the Income Tax Act, 1961 and further made an addition of Rs.10,28,048/- on account of Business Income (8% of turnover) on estimate basis. 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. 4. Aggrieved, assessee is in appeal before us. 5. Before us, the ld. Counsel for assessee submitted that the CIT(A) has sent the 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 addition on account addition gross profits. The ld.DR stated that the assessee has defaulted in appearing before the appellate authority hence, no lenient view is to be taken in this case and prayed for dismissal of appeal. 6. 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. Even, assessment has been done ex-parte. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. AO for de novo assessment hearing, 3 ITA No. 73/Chny/2025 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 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 fresh assessment hearing after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents etc. if any, forthwith without any fail, failing which Ld.AO shall be at liberty to proceed with the assessment proceedings as per law. The ld. AR, who appeared also assured the bench that he will ensure that the assessee will prosecute his case diligently before the ld.AO. 7. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 24th March, 2025 Sd/- Sd/- (जगदीश ) ( मनु क ुमार िग\u001bर ) ( Jagadish ) ( Manu Kumar Giri) लेखा लेखा लेखा लेखा सद\u0003य सद\u0003य सद\u0003य सद\u0003य / Accountant Member \u000fाियक सद / Judicial Member चे\u0019ई/Chennai, \u001bदनांक/Date: 24.03.2025 DS आदेश क\u0007 \bितिलिप अ\u000eेिषत/Copy to: 1. Appellant 2. Respondent 3. आयकर आयु\u0013/CIT Chennai 4. िवभागीय \bितिनिध/DR 5. गाड फाईल/GF. "