MUTHAIAH CHETTIAR MANIKANDAN,TRICHY V. INCOME TAX OFFICER, TRICHY

ITA 694/CHNY/2025

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The case involves Muthaiah Chettiar Manikandan, who did not file his income tax return for the assessment year 2017-18. The Income Tax Department noted substantial cash deposits during the demonetization period and, after the assessee failed to respond to notices, made an addition of Rs.1,72,85,774 as unexplained money under section 69A of the Income Tax Act. The assessee's appeal to the CIT(A) was dismissed due to non-response to multiple notices. The Tribunal found that the assessee was not adequately aware of the proceedings due to emails being directed to a spam folder and thus allowed the appeal, setting aside the CIT(A)'s order and remitting the case back to the Assessing Officer.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633452 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: Tin Box Company vs CIT, [2001] 249 ITR 216 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRYATI SHARMA; J. C.I.T
• Assessee Lawyers: C.MARUTHAPPAN; F
• Keywords: Set aside; Reasonable cause; Principle of natural justice

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ Ɋायपीठ, चेɄई IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, CHENNAI ŵी जॉजŊ जॉजŊ क े, उपाȯƗ एवं ŵी एस.आर.रघुनाथा, लेखा सद˟ क े समƗ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 694/Chny/2025 िनधाŊरण वषŊ / Assessment Year: 2017-18 Muthaiah Chettiar Manikandan, 19, Sittal House, Warners Road, Cantonment, Tiruchirappalli – 620 001. vs. ITO, Ward -1 (2), Tiruchirappalli. [PAN: ALAPM-0049-E] (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से/Appellant by : Mr. C.Maruthappan, F.C.A. ŮȑथŎ की ओर से/Respondent by : Ms. Pryati Sharma, J.C.I.T. सुनवाई की तारीख/Date of Hearing : 03.06.2025 घोषणा की तारीख/Date of Pronouncement : 11.06.2025 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 2016-17, dated 12.02.2025. 2. At the outset, we find that there is a delay of 34 days in appeal filed by the assessee, for which the assessee has filed affidavit stating the reasons for delay, wherein, it is submitted that the assessee was not aware the order passed by ld.CIT(A), since the notices were sent through email were posted in spam folder. Further, notices were not served physically. Further the order of the ld.CIT(A) was come to the knowledge of the assessee, only after the bank :-2-: ITA. No.:694/Chny/2025 account attachments made by the revenue. Hence, there was a delay in filing the appeal by the assessee. 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 appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeal and admit the appeal filed by the assessee for adjudication. 3. The brief facts of the case are that the assessee is an individual had not filed his return of income for the A.Y. 2017-18. As per the information that the assessee had made cash deposit of Rs.14,47,000/- during demonetisation period, the statutory notices were issued to the assessee calling for return of income. However, the assessee did not respond and hence u/s.133(6) of the Act the information were obtained from the bank and found that the assessee had deposited Rs.2,66,000/- cash and Rs.1,70,19,774/- other deposits during the F.Y. 2016-17 in Canara Bank, Trichy branch. Since the assessee failed to file the return of income and participate in assessment proceedings, the assessment was concluded u/s.144 of the Act dated 25.12.2019, by making an addition of Rs.1,72,85,774/- u/s.69A of the Act as unexplained money. 4. Aggrieved by the order of the AO assessee preferred an appeal before the ld.CIT(A),NFAC, Delhi. However, the assessee did not respond to any of the six notices issued by the ld.CIT(A) from 13.01.2021 to 25.10.2024 as per para 4 of the ld.CIT(A) order. Hence, the ld.CIT(A) passed an exparte order dated 28.11.2024 by confirming the order of AO and dismissed the appeal of the assessee. :-3-: ITA. No.:694/Chny/2025 5. The Ld.AR for the assessee submitted that the assessee has failed to take note of hearing notices sent through e-mail, resulting in non-cooperation of assessee during the appellate proceedings as well as assessment proceedings. It was prayed in the interest of justice and equity, the issue may be restored to the files of the AO as a last opportunity for proper representation of his case. 6. The Ld.DR submitted that adequate opportunities were provided from the offices of the AO and the ld.CIT(A) and there is no violation of principles of natural justice. Therefore, it was prayed the appeal of the assessee may be dismissed. 7. We have heard rival submissions and perused the materials on record. The Office of the First Appellate Authority had issued four hearing notices. It was the contention of the ld.AR that the assessee had failed to take note of hearing notices sent from the office of the ld.CIT(A) as the notices were sent to different email ID. We note that the AO has also passed an exparte order by considering the information available with the department along with information obtained from bank u/s.133(6) of the Act and made an addition and the same has been upheld by the ld.CIT(A) - NFAC due to non-participation of the assessee in the first appellate proceedings. Accordingly, in the interest of justice, we set aside the order of the ld.CIT(A) and remit the matter back to the file of Assessing Officer by relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Company vs CIT, [2001] 249 ITR 216 (SC) and direct AO to denovo frame the order in accordance to law, after providing :-4-: ITA. No.:694/Chny/2025 reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so. 8. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 11th June, 2025 at Chennai. Sd/- Sd/- (जॉजŊ जॉजŊ क े) (GEORGE GEORGE K) उपाȯƗ /VICE PRESIDENT (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखासद˟/Accountant Member चेɄई/Chennai, िदनांक/Dated, the 11th June, 2025 sp आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3.आयकर आयुƅ/CIT– Chennai/Coimbatore/Madurai/Salem 4. िवभागीय Ůितिनिध/DR 5. गाडŊ फाईल/GF "