K. RENGANATHAN (HUF),VELLORE V. ACIT, CIRCLE-1, VELLORE

ITA 1748/CHNY/2024

AI Insights

The case involves an appeal by K. Renganathan (HUF) against an order from the CIT(A), National Faceless Appeal Center, Delhi, which confirmed an addition of Rs. 69,00,000 to the assessee's income under section 69A read with section 115BBE of the Income Tax Act. The addition was made following a cash deposit of Rs. 69,00,000 during the demonetization period, which the assessee claimed were returns of principal loan amounts and interest from his money lending business. However, the assessee failed to provide details of the parties involved in the loans, leading the AO to treat the deposits as unexplained. The CIT(A) upheld the AO's decision without proper consideration of the facts, leading to the Tribunal's decision to set aside the CIT(A)'s order and remand the case for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 46358 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-09-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 18-06-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: GOUTHAMI MANIVASAGAM
• Assessee Lawyers: M. KARUNAKARAN
• Section: 69A

Judgement Text

"आयकर अपीलीय अधिकरण, ‘बी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI श्री यस यस विश्िनेत्र रवि, न्याययक सदस्य एवं श्री अमिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1748/Chny/2024 निर्धारण वर्ा /Assessment Years: 2017-18 K.Renganathan(HUF) No.790, 8th Cross Street, Gandhi Nagar(East), Radhakrishnan Nagar, Vellore-632006. [PAN: AALHK3121M] The Assistant Commissioner of Income Tax, Circle-1, Vellore. (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Shri M.Karunakaran, Advocate प्रत्यर्थी की ओर से /Revenue by : Ms.Gouthami Manivasagam, JCIT सुनवाई की तारीख/Date of Hearing : 11.09.2024 घोषणा की तारीख /Date of Pronouncement : 29.11.2024 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/250/2024-25/1064957384(1) dated 17.05.2024 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 17.05.2024 passed by NFAC, Delhi. ITA No.1748/Chny/2024 :- 2 -: 2.0 Brief factual matrix of the case is that the Ld.AO has made an addition of Rs.69,00,000/- to income of the assess u/s 69A of the Act. The assessee had reportedly made cash deposit of Rs.69,00,000/- in its Gandhinagar Vellore branch of HDFC bank during demonetization period . Before the Ld.AO it was contended that the assessee was in money lending business and that the impugned deposits were return of principle loans amount, interest there upon. The assessee however could not provide the details of names and address of the said parties to whom alleged loans were advanced. Consequently, the Ld.AO proceeded to treat the impugned deposits as unexplained deposits u/s 69A r.w.s. 115BBE of the act and made the addition of Rs.69,00,000/-. 3.0 Before us the assessee has raised grounds of appeal No.1 to 14 all of which are centering around the principal controversy of addition of Rs.69,00,000/- u/s 69A r.w.s. 115BBE of the act. Ground of appeal No.3 is regarding adjudication of appeal by the CIT(A) without any proper consideration of the facts and by a mere “cut and paste” of the finding of the Ld. AO given in his order. 4.0 We have heard the rival submissions in the light of material available on records. We have taken notice of the ground of appeal No.3 regarding adjudication of appeal by the CIT(A) without any proper ITA No.1748/Chny/2024 :- 3 -: consideration of the facts and by a mere “cut and paste” of the finding of the Ld. AO given in his order. We have also noted that the averments raised by the assessee are totally evident from the order of Ld. CIT(A). It clearly seen that the Ld. CIT(A) has merely copy pasted contents from page-4 (second last para of AO’s order) and para 5.1.7 on page-5 of the Ld. AO’s order. He has after said copy paste in para 4 of his order merely concluded “the appeal filed by the assessee is dismissed. Thus it is glaring fact of this case that the Ld. CIT(A) has not discharged his adjudicating responsibility with even a grain of sincerity or accountability. The Ld. CIT(A) was required to have examined the facts of the case viz a viz conclusions drawn by the Ld. AO and thereafter to proceed with his own decision as to whether he concurs or not. In fact, this is the only function for a appellate authority. 4.1 The appellate order is a prime example of discharge of appellate functions in the most callous and careless manner without any application of mind. It is trite law that application of mind is basic ingredient for any judicious order. The revenue do well to recommend the impugned Ld. CIT(A) for training so as to equip him with basic skills required for discharge of appellate functions, which come with serious responsibilities. Alternatively, the revenue may ITA No.1748/Chny/2024 :- 4 -: consider not shouldering the Ld. CIT(A) with appellate functions. In either of the situations, the revenue would save itself from being exposed to unnecessary embarrassment. 4.2 Be that as it may be, in the interest of justice we therefore set aside the order of Ld. CIT(A) and direct him to readjudicate the matter de novo after giving due opportunities of being heard to the assessee and passing a speaking order. The assessee shall be required to make due compliance to the notices issued by the Ld. CIT(A). Accordingly, all the grounds of the appeal raised by the assesse are allowed for statistical purposes. 5.0 In the result the appeal is allowed for statistical purposes Order pronounced on 29th , November-2024 at Chennai. Sd/- (यस यस ववश्वनेत्र रवव) (SS Viswanethra Ravi) न्याययक सदस्य / Judicial Member Sd/- (श्री अमिताभ शुक्ला) (Amitabh Shukla) लेखा सदस्य /Accountant Member चेन्नई/Chennai, ददनांक/Dated: 29th , November-2024. KB/- आदेश की प्रयतमलवप अग्रेवषत/Copy to: 1. अपीलधर्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - 4. नवभधगीय प्रनिनिनर्/DR 5. गधर्ा फधईल/GF "