MR. RANGAL SATHIS KUMAR,CHENNAI V. ITO, NCW-3(3), CHENNAI

ITA 2949/CHNY/2024

AI Insights

The case involves Mr. Rangan Sathis Kumar, the appellant, who contested the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi, for the assessment year 2017-18. The primary issue was the addition of ₹90,50,998 as unexplained expenditure under section 69C of the Income Tax Act, 1961, due to the appellant's failure to substantiate the source of payment for credit card dues. The Tribunal noted the delay in filing the appeal and accepted the reasons provided by the appellant as bona fide, thus condoning the delay. The Tribunal found that the CIT(A) had not adjudicated the appeal on merits due to non-response from the appellant, which was attributed to circumstances beyond his control. The Tribunal decided to remand the case back to the CIT(A) for a fresh decision, emphasizing the need for a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107570 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.ANITA
• Assessee Lawyers: B. RAMAKRISHNAN; F
• Keywords: Condonation of delay; Unexplained expenditure; Rectification of order
• Section: 154; 69C

Judgement Text

"आयकर अपीलीय अिधकरण, ’सी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी अिमताभ शुƑा, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Amitabh Shukla, Accountant Member आयकर अपील सं./I.T.A. No.2949/Chny/2024 िनधाŊरण वषŊ/Assessment Year: 2017-18 Mr. Rangan Sathis Kumar, No. 6, 4th Cross Street, Ellaiamman Colony Vellala, Teynampet, Chennai 600 086. [PAN:BMVPS9901E] Vs. The Income Tax Officer, Non Corporate Ward 3(3), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri b. Ramakrishnan, F.C.A. ŮȑथŎ की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 22.01.2025 घोषणा की तारीख /Date of Pronouncement : 23.01.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 06.06.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18. 2. We find that this appeal is filed with a delay of 81 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really I.T.A. No.2949/Chny/24 2 prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication. 3. The assessee raised 3 grounds in his appeal and mainly challenged the exparte order of the ld. CIT(A) in confirming the addition made by the Assessing Officer. 4. Brief facts of the case are that the assessee filed his original return of income on 10.02.2018 admitting total income of ₹.4,99,260/-. The case was selected for limited scrutiny to verify credit card payments. Against the notices, the assessee furnished credit card statements to settle the credit card dues. The Assessing Officer asked the assessee to furnish the source for payment of credit card dues with documentary evidences. The assessee submitted credit card payment details and claimed that the payments were made to the credit card bills from his internal generation of cash and payment made through the available limit of other card, but, the assessee did not furnish comprehensive explanation for the source of payment of credit card dues. On consolidation of assessee’s submissions, the Assessing Officer noted that the assessee made payments to an extent of ₹.90,50,998/- and as the assessee failed to substantiate the source for the above payments made, the same were treated as unexplained expenditure under section 69C of the Income Tax I.T.A. No.2949/Chny/24 3 Act, 1961 [“Act” in short] and added to the returned income of the assessee. Subsequently, after verification of the credit card statement, the Assessing Officer passed rectification order under section 154 of the Act determining total income of the assessee at ₹.82,80,924/-. The assessee carried the matter in appeal before the ld. CIT(A). Since there was no response to the notices issued by the ld. CIT(A), the ld. CIT(A) dismissed the appeal filed by the assessee. 5. The ld. AR Shri B. Ramakrishnan, F.C.A. submits that non response to the notices issued by the ld. CIT(A) is neither wilful nor deliberate but due to circumstances beyond assessee’s control. He further submits that the ld. CIT(A) did not adjudicate the ground raised by the assessee on merits. Thus, the ld. AR prayed that one more opportunity may be afforded to the assessee for pursuing his case before the ld. CIT(A). 6. The ld. DR Ms. R. Anita, Addl. CIT opposed the same and drew our attention to para 4 of the impugned order and argues that the ld. CIT(A) has given ample opportunities to the assessee, but, it was not availed. She vehemently argued that the costs may be imposed in case this Tribunal afford an opportunity by remanding the matter to the file of the ld. CIT(A). I.T.A. No.2949/Chny/24 4 7. Considering the facts and circumstances of the case and submissions of the ld. AR and the ld. DR, in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) subject to the condition of payment of ₹.5,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the ld. CIT(A) shall satisfy the payment of cost and afford an opportunity to the assessee for filing condonation petition in support of an affidavit for the delay. The ld. CIT(A) shall consider the same and condone the delay. The ld. CIT(A) shall decide the matter afresh in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 23rd January, 2025 at Chennai. Sd/- Sd/- (AMITABH SHUKLA) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 23.01.2025 Vm/- I.T.A. No.2949/Chny/24 5 आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "