MR. GANAPATHY NAGARAJAN,PONDICHERRY V. ITO, WARD-3, PUDUCHERRY

ITA 2795/CHNY/2025

AI Insights

The case revolves around an appeal by Shri Ganapathy Nagarajan against the order of the Commissioner of Income Tax (Appeals), which sustained the addition of Rs.23,84,645/- to the assessee's income under section 69A of the Income Tax Act, 1961, for the assessment year 2012-13. The addition was initially made by the Assessing Officer (AO) based on unexplained cash deposits in the assessee's bank accounts. The FAA partially allowed the appeal by deleting the addition related to one bank account but confirmed the addition for the Union Bank of India account. The Tribunal, after reviewing the evidence and submissions, concluded that the assessee had provided sufficient justification for the cash deposits, leading to the allowance of the appeal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 845921 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Chennai
• Assessment Year: 2012-2013
• Appeal Filed On: 10-10-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: R. SRIDEVI
• Keywords: Additional evidence; Period of limitation; Time period of passing order
• Section: 147; 148

Judgement Text

" आयकर अपीलȣय अͬधकरण, ‘सी’ Ûयायपीठ, चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं ᮰ी बालकृ᭬णन एस, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENTAND SHRI BALAKRISHNAN S, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 2795/CHNY/2025 िनधाᭅरण वषᭅ/Assessment Year: 2012-13 Shri Ganapathy Nagarajan, Plot Nos.49 & 50, R S No.77/1, Chevalaiar Srinivasa Nagar, Oulgaret Municipal Limit, Pondicherry – 605 008. PAN: ADTPN 1244R Vs. The Income Tax Officer, Ward – 3, Puducherry (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Ms. R. Sridevi, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Smt. Anitha, Addl.CIT सुनवाई कᳱ तारीख/Date of Hearing : 23.03.2026 घोषणा कᳱ तारीख/Date of Pronouncement : 24.03.2026 आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 30.07.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2012-13. Printed from counselvise.com ITA Nos.2795/Chny/2025 :- 2 -: 2. There is a delay of 10 days in filing the present appeal. The assessee has filed an affidavit explaining the reasons for the delay. On perusal of the reasons stated in the condonation petition, we are of the view that there is sufficient cause for late filing of this appeal and no latches can be attributed to the assessee. Hence, we condone the delay in filing this appeal and proceed to dispose off the appeal on merits. 3. The solitary issue that was argued is whether the First Appellate Authority (FAA) is justified in sustaining the addition of Rs.23,84,645/- u/s.69A of the Act (Addition of Rs.26,46,559/- made by AO u/s.69A of the Act). 4. Brief facts of the case are as follows:- The assessee is an individual. For the assessment year 2012-13, assessee did not file his return of income. Based on information available with the Department regarding substantial cash deposits, notice under section 148 was issued on 27.03.2019. During the course of assessment proceedings, the assessee was called upon to explain the source of cash deposits amounting to Rs.23,84,645/- in Union Bank of India and Rs.2,61,914/- in HDFC Bank. In response, the assessee submitted that the said cash deposits were made by his Printed from counselvise.com ITA Nos.2795/Chny/2025 :- 3 -: employer namely, Sun Industrial Automation & Solutions. It was stated that assessee was working as a Plant Manager at employer’s factory in Paddappai. It was submitted that cash deposits were made into the assessee’s bank account to meet day-to-day operational expenses of the factory, which the assessee would withdraw cash or make payments as and when required. However, the AO did not accept the explanation on the ground that no supporting documentary evidence was furnished. Consequently, the assessment was completed u/s.143(3) read with section 147 of the Act on 26.12.2019, wherein the entire cash deposits in the Union Bank of India and HDFC Bank accounts were treated as unexplained money and added to the income of the assessee under section 69A of the Act. 5. Aggrieved by the order of assessment passed u/s.143(3) r.w.s.147 of the Act, assessee filed appeal before the First Appellate Authority (FAA). Before the FAA, the assessee furnished additional evidences in support of his claim, including confirmation and vouchers from the employer. The assessee also submitted a letter from the employer stating that the cash deposits were made into the assessee’s bank account to meet factory-related expenses. After considering the submissions, the FAA partly allowed the Printed from counselvise.com ITA Nos.2795/Chny/2025 :- 4 -: appeal. The FAA deleted the addition in respect of cash deposits made in the HDFC Bank account. However, the addition relating to cash deposits of Rs.23,84,645/- in the Union Bank of India account was confirmed. The FAA held that the vouchers produced by the assessee were self-generated and lacked credibility. It was further observed that the assessee failed to furnish transaction-wise details of cash deposits, corresponding expense statements, or entries from the employer’s books of account evidencing such transfers. Accordingly, the FAA upheld the addition to the extent of cash deposits in the Union Bank of India account. 6. Aggrieved by the order of the FAA, assessee has filed the present appeal before the Tribunal. Before the Tribunal, the assessee furnished the banks statements, confirmation of employer of having made cash deposits, vouchers, etc., (documentary evidence which was already placed before the FAA). The Ld.AR reiterated the submissions made before the Income-tax authorities. 7. The Ld.DR on the other hand strongly supported the orders of the AO and the FAA. Printed from counselvise.com ITA Nos.2795/Chny/2025 :- 5 -: 8. We have heard rival submissions and perused the material available on record. The solitary issue that arises for our consideration is whether the First Appellate Authority (FAA) is justified in confirming the addition of Rs.23,84,645/-. The assessee contended that the said sum represents cash deposits made by his employer in his bank account maintained with Union Bank of India, Guindy Branch, for the purpose of meeting day-to-day expenses of the factory situated at Paddappai during the financial year 2011–12. In support of this contention, the assessee furnished a confirmation letter from the employer affirming that the cash deposits amounting to Rs.23,84,645/- were made for operational requirements of the factory. The letter issued by the employer reads as follows:- Printed from counselvise.com ITA Nos.2795/Chny/2025 :- 6 -: 9. The assessee had also furnished cash vouchers of assessee’s employer totaling to sum of Rs.23,84,644/-. On perusal of the bank statement, it is noticed that there are several cash withdrawals and transfers online on various dates. The pattern of transactions supports the contention of the assessee that the account of the assessee was used by his employer for operational purposes of the factory where he was a plant manager. We note that the confirmation letter from the employer was filed as an additional evidence before the FAA. In such circumstances, the FAA ought to have called for a remand report from the Assessing Officer before adjudicating the issue. However, the FAA, without seeking any remand report, summarily rejected the explanation and evidences furnished by the assessee on the ground that the vouchers were self-generated and no supporting records were produced. It is further observed that even during the assessment proceedings, the assessee had consistently stated that the cash deposits were made by the employer. However, the Assessing Officer, at the fag end of the limitation period, completed the assessment without calling for necessary details such as confirmation from the employer, etc. Considering the totality of facts and circumstances of the case, we find that the assessee has satisfactorily explained the source of cash deposits and has furnished necessary evidences in support of Printed from counselvise.com ITA Nos.2795/Chny/2025 :- 7 -: his claim. Therefore, we see no reason to sustain the addition of Rs.23,84,645/- u/s.69A of the Act, which was confirmed by the FAA. Accordingly, the said addition is deleted. It is ordered accordingly. 10. In the result, the appeal filed by the assessee is allowed Order pronounced in the open court on 24th March, 2026 at Chennai. Sd/- Sd/- (बालकृ᭬णन एस) (BALAKRISHNAN S) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चे᳖ई/Chennai, ᳰदनांक/Dated, the 24th March, 2026 RSR आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Salem 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. By Order Printed from counselvise.com REKHA SENTHIL RAJ Digitally signed by REKHA SENTHIL RAJ Date: 2026.03.26 17:06:22 +05'30' "