K.G. BOOPATHI,VELLORE V. ITO, WARD-2, VELLORE

ITA 2372/CHNY/2024

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The case involves K.G. Boopathi, the appellant, who contested an addition of Rs. 41,80,000 made by the Income Tax Officer (ITO) under section 144 of the Income Tax Act, 1961, for the assessment year 2017-18. The addition was based on cash deposits made during the demonetization period, which the ITO linked to unaccounted income. The CIT(A) upheld the addition without waiting for a remand report from the ITO, which was requested during the appellate proceedings. The Tribunal found that the assessee had not initially complied with the ITO but had provided documents during the CIT(A)'s remand proceedings. Given these circumstances, the Tribunal decided to set aside the lower authorities' orders and remand the case back to the CIT(A) for a fresh assessment after obtaining the necessary report from the ITO.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470342 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHEILA PARTHASARTHY
• Assessee Lawyers: M. KARUNAKARAN
• Keywords: Set aside; Opportunity of being heard
• Section: 144

Judgement Text

"Page - 1 - of 4 आयकर अपीलीय अधिकरण, ‘बी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2372 /Chny/2024 निर्ाारण वर्ा /Assessment Years: 2017-18 K.G.Boopathi, Periya Kasinaickappati Village and Post, Kandili Tirupattur, Vellore-635901. [PAN: APDPB5581R] Income Tax Officer, Non Corp, Ward-2, Vellore (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Shri M.Karunakaran, Advocate प्रत्यर्थी की ओर से /Revenue by : Ms.Sheila Parthasarthy, Addl.CIT सुिवाई की तारीख/Date of Hearing : 02.12.2024 घोर्णा की तारीख /Date of Pronouncement : 22.01.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed against the order bearing DIN & Order No.ITBA/NFAC/S/250/2023-24/1057454214(1) dated 27.10.2023 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2017- 18. Through the aforesaid appeal the assesse has challenged order u/s 250 dated 27.10.2023 passed by NFAC, Delhi. 2.0 It has been noted that there is a delay of 255 days in the case, in filing of this appeal before the tribunal. In its affidavit the assesse has pleaded that the Ld.CIT(A) had called for a remand report from the Ld. AO, consequent to which assessee had filed requested details before the ITA No.2372/Chny/2024 :- 2 -: Page - 2 - of 4 Ld. AO. Subsequently, the assessee was waiting that the Ld.CIT(A) would afford him an opportunity to submit comments if any. It was submitted that the assessee came to know of the passage of appellate order only upon receiving a penalty notice in October-2023. All these activities contributed to the delay which was neither willful nor wanton. The assesse submitted that there will not be case of any non-compliance now. We have considered the justification put forth by the assesse and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. The Ld. DR did not pose any serious objections to the delay. Accordingly, we hereby condone the delay and proceed to adjudicate this appeal. 3.0 The only issue raised by the assessee through its grounds of appeal are regarding an addition of Rs.41,80,000/- made by the Ld. AO. The Ld. Counsel for the assessee informed that the Ld. AO has passed order u/s 144 dated 05.08.2019, in his case, making the impugned additions. The assessee carrying on the business of cement trading had submitted that the cash deposits of Rs. 41,80,000/- made by it during the demonetization period have direct connection with its sale proceeds of Rs.3,01,39,902/-. The assessee failed to produce his books of accounts, bills and vouchers before the Ld. AO. As the assessee had failed to file any satisfactory explanation, the Ld. AO after obtaining suitable directions ITA No.2372/Chny/2024 :- 3 -: Page - 3 - of 4 from his supervisory authority u/s 144A, proceeded to complete the assessment u/s 144. The Ld. Counsel submitted that the Ld. First Appellate Authority had asked the Ld. AO to submit a remand report and as the same was not furnished, proceeded to confirm the impugned addition. As per para 5.2 of order of the Ld.CIT(A), assessee’s total turnover was Rs.3,01,39,902/-, out which Rs. 71,55,807/- was cash in hand as on 08.11.2016. The assessee had submitted that the cash deposit of Rs. 41,80,000/- was directly related to said balances as on 08.11.2016. 4.0 We have heard rival submissions in the light of material available on records. The Ld. Counsel for the assessee submitted that the entire cash deposits has been recorded in its audited books of accounts and hence they are all genuine. It has been pleaded that the Ld. CIT(A) ought to have waited for submission of remand report by the Ld. AO. We have noted that the assessee has not complied, originally with the Ld. AO leading to order u/s 144. It is however seen that it claims to have complied with the Ld. AO during the remand proceedings initiated by the Ld.CIT(A). The assessee through its paper book placed on record various documents in support of its contentions. It is also an undisputed fact of the case that the Ld.AO has not submitted his remand report and also that the Ld.CIT(A) has passed his order without waiting for the same. ITA No.2372/Chny/2024 :- 4 -: Page - 4 - of 4 Be that as it may be we are of the view that the interest of justice would be met if the assessee is given one more opportunity to defend its case before the Ld.CIT(A). Consequently, we set aside the order of lower authorities and direct the Ld.CIT(A) to readjudicate the matter after obtaining remand report from the Ld. AO. He may like to take up the issue of the Ld.AO non-compliance with his supervisory authorities. The CIT(A) shall give due opportunity of being heard to the assessee and the assessee shall comply with all the notices of the Ld.CIT(A). Any non- compliance on the part of the assessee, shall be adversely viewed. Accordingly, all grounds of appeal raised by the assessee are allowed for statistical purposes. 5.0. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 22nd , January-2025 at Chennai. Sd/- ( एबी टी. वकी) (ABY T VARKEY) न्यानयक सदस्य / Judicial Member Sd/- (अयिताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, नदिांक/Dated: 22nd , January-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "