MANICAM NARAYANAN,CHENNAI V. ACIT, NCC-20(1), CHENNAI

ITA 1975/CHNY/2025

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The case involves Manicam Narayanan, an individual engaged in the business of film rights distribution and earning rental and interest income, who did not file his income tax return for the assessment year 2017-18. The Assessing Officer (AO) issued notices under sections 142(1) and 144 of the Income Tax Act due to non-compliance and abnormal cash deposits during the demonetization period. The AO made additions to the assessee's income based on the information available, including unexplained cash deposits. The assessee's appeal to the CIT(A) was dismissed due to non-participation. The Tribunal noted procedural errors and non-application of mind by the CIT(A) and decided to remit the case back to the AO for a de novo assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773061 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 14-07-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOUTHAMI MANIVASAGAM
• Assessee Lawyers: V. BALAJI
• Keywords: Set aside; Reasonable cause; Capital Gains

Judgement Text

" आयकर अपील य अ धकरण, ‘बी’ \u000eयायपीठ, चे\u000eनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI \u0015ी जॉज\u0018 जॉज\u0018 क े, उपा\u001aय\u001b एवं \u0015ी एस.आर.रघुनाथा, लेखा सद%य क े सम\u001b BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 1975/Chny/2025 'नधा\u0018रण वष\u0018 / Assessment Year: 2017-18 Manicam Narayanan, No. 21, Judge Ramakrishnan Street, Mylapore, Chennai – 600 004. vs. The Assistant Commissioner of Income Tax, Non-Corporate Circle-20(1) Chennai. [PAN: AABPN-2184-P] (अपीलाथ)/Appellant) (*+यथ)/Respondent) अपीलाथ) क, ओर से/Appellant by : Mr. V. Balaji, Advocate. *+यथ) क, ओर से/Respondent by : Ms. Gouthami Manivasagam, JCIT. सुनवाई क, तार ख/Date of Hearing : 16.09.2025 घोषणा क, तार ख/Date of Pronouncement : 22.09.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER: This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017-18, vide order dated 22.04.2024. 2. At the outset, we find that there is a delay of 379 days in appeals filed by the assessee, for which the assessee has filed affidavit stating the reasons for Printed from counselvise.com :-2-: ITA. No:1975 /Chny/2025 delay, wherein, it is submitted that the assessee was not aware of the income tax compliances online and also not well-acquainted with the income tax portal. After considering the Affidavit filed by the assessee and also hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeals on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeals and admit appeals filed by the assessee for adjudication. 3. The brief facts of the case are that the assessee was an individual engaged in the business of distribution of film rights and also earns rental income, interest from bank deposits and had not filed the return of income u/s.139(1) of the Act for the A.Y 2017-18. The assessee was asked to file the return by issuing notice u/s.142(1) of the Act based on the information of abnormal cash deposit during demonetization period. However, the assessee did not file return of income. Further, the AO issued statutory notices to the assessee. The assessee did not respond to any notices. On perusal of the ITS details the AO found that the assessee derived income for the previous year relevant to A.Y.2017-18 from House Property of Rs.1,.03,16,886/-, Capital gains of Rs.3.50 Crores, Profits and gains from business/Profession of Rs.65,61,000/- and Income from Other Sources of Rs.4,10,476/- and made a addition. In addition, the assessee deposited SBNs to the tune of Rs.48,43,000/- in his bank accounts maintained with HDFC Bank, IDBI Bank and HSBC Bank during the demonetization period, but not explained the source Printed from counselvise.com :-3-: ITA. No:1975 /Chny/2025 of cash deposit, hence made an addition u/s.69A of the Act. The AO concluded the assessment and passed an exparte order u/s.144 of the Act dated 24.09.2019, based on the material evidence available on records. 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC. 5. At the outset, we observed that the ld.CIT(A) has provided two opportunities for the assessee to appear for hearings as detailed in paragraph 4 of the CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld. CIT(A), NFAC was dismissed the assessee’s appeal by confirming the order of the AO dated 22.04.2024. In view of the above, the ld.AR prayed for one more opportunity before the AO, since the exparte order has been passed by the AO u/s.144 of the Act. Further, the ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the Assessing Officer to complete the assessment proceedings effectively. 6. Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A). Printed from counselvise.com :-4-: ITA. No:1975 /Chny/2025 7. We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the Assessing Officer has passed an exparte order by considering the information available with the department after providing sufficient opportunity to the assessee. On appeal by the assessee, the same has been dismissed by the ld.CIT(A), NFAC, Delhi due to non-participation of the assessee before the first appellate authority. Since the assessee has failed to file the returns either u/s.139 or u/s.148 of the Act and also did not participate both before the Assessing Officer as well as the appellate authority and also delay in filing the appeal before us, we levy the cost of Rs.1,00,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order. Further, we observed that the ld.CIT(A) without application of mind has referred to the assessment order of the some other assessee related to A.Y.2018-19 by reproducing the assessment order in his order from Page No.5 to 10. Further, the ld.CIT(A) negligently dismissed the appeal by referring to the disputed amount of the different assessee of different assessment year in Page No.12 of the order. 8. In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so. Printed from counselvise.com :-5-: ITA. No:1975 /Chny/2025 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the court on 22nd September, 2025 at Chennai. Sd/- Sd/- (जॉज\u0018 जॉज\u0018 क े) (GEORGE GEORGE K) उपा\u001aय\u001b /VICE PRESIDENT (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखा सद%य/ACCOUNTANT MEMBER चे\u000eनई/Chennai, 0दनांक/Dated, the 22nd September, 2025 SP आदेश क, *'त2ल3प अ4े3षत/Copy to: 1. अपीलाथ)/Appellant 2. *+यथ)/Respondent 3.आयकर आयु5त/CIT 4. 3वभागीय *'त'न ध/DR 5. गाड\u0018 फाईल/GF Printed from counselvise.com "