NALLA THAMBI,TIRUCHIRAPALLI V. ITO, WARD-1(2), TRICHY

ITA 1729/CHNY/2025

AI Insights

The case involves Nalla Thambi, a sole proprietor engaged in multiple businesses, who appealed against the order of the Learned Commissioner of Income Tax (Appeals) confirming the addition of unexplained money to his income for the Assessment Year 2017-18. The addition was initially made by the Assessing Officer under section 69A of the Income-tax Act, 1961, due to unexplained cash deposits of Rs. 6,38,000 made during the demonetization period. The Tribunal found that both the lower authorities had passed their orders ex-parte without sufficient opportunity for the assessee to explain the source of the deposits. Consequently, the Tribunal remanded the matter back to the Assessing Officer for a fresh assessment, directing that the assessee be given a reasonable opportunity to present his case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772692 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA
• Assessee Lawyers: T.VASUDEVAN
• Keywords: Business income; Principle of natural justice
• Section: 143(3)

Judgement Text

"आयकर अपीलीय अिधकरण, ‘सी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0019ी जॉज जॉज क े, उपा एवं \u0019ी जगदीश, लेखा सद' क े सम BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1729/Chny/2025 िनधा रण वष /Assessment Year: 2017-18 Nalla Thambi, 8F, Elementary School Street, Tiruchirappalli – 620 008. Vs. The Income Tax Officer, Ward-1(2), Trichy. [PAN: ACFPN 9155L] (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीला थG की ओर से/ Appellant by : Shri T. Vasudevan, Advocate IJथG की ओर से /Respondent by : Mrs. R. Anitha, Addl. CIT सुनवा ई की ता रीख/Date of Hearing : 25.08.2025 घोषणा की ता रीख /Date of Pronouncement : 28.08.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax, Appeal, Addl./JCIT(A)-2, Noida [hereinafter “CIT(A)”] dated 24.01.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Income-tax Act, 1961 (hereinafter “the Act”) dated 17.12.2019. Printed from counselvise.com ITA No.1729/Chny/2025 Nalla Thambi :- 2 -: 2. There is a delay of 167 days in filing the appeal by the assessee. The assessee has filed condonation petition stating the reasons for delay in filing the appeal. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned. 3. The assessee is a sole proprietor engaged in the business of dealing in Sun DTH, Dish Infra Services Pvt. Ltd. and also works as a contractor. The assessee filed his return of income declaring total income of Rs. 5,74,600/-. It was noticed that the assessee had deposited cash of Rs. 6,38,000/- in Specified Bank Notes (SBN) during the period of demonetization. In the assessment order passed u/s. 143(3) of the Act, the Assessing Officer made an addition u/s. 69A of the Act treating the said deposits as unexplained money. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A), by passing an ex-parte order, confirmed the addition on the ground that the assessee failed to satisfactorily explain the source of the cash deposits. Printed from counselvise.com ITA No.1729/Chny/2025 Nalla Thambi :- 3 -: 4. The Ld. Authorized Representative (A.R) of the assessee submitted that the assessee is engaged in multiple businesses as a dealer in Sun DTH, Dish Infra Services Pvt. Ltd. and also as a contractor for Goldcrest Services Pvt. Ltd. It was contended that the cash deposits were out of business receipts. The Ld. A.R further submitted that sufficient opportunity was not granted to the assessee either by the Assessing Officer or by the Ld. CIT(A), as both authorities passed their orders ex-parte. Therefore, it was prayed that the matter may be restored to the file of the A.O for fresh consideration in the interest of justice. 5. The Ld. Departmental Representative has relied on the orders of the authorities below. 6. We have heard the rival submissions, and perused the materials available on record. On perusal of the orders of A.O as well as Ld. CIT(A), we find that both the orders have been passed for the non- compliance by the assessee. The Ld. A.R has submitted that the Ld. CIT(A) has not decided the issue on merits, therefore the case may be remanded back to the A.O for adjudication on merits. We are of the opinion that keeping in view the principles of natural justice, the Printed from counselvise.com ITA No.1729/Chny/2025 Nalla Thambi :- 4 -: assessee be provided with another opportunity of hearing to substantiate his case before the A.O. Accordingly, we remit the matter back to the file of the A.O for denovo assessment in accordance with law, after giving reasonable opportunity to the assessee. We also direct the assessee to appear before the A.O on the date of hearing without fail and furnish complete details for his fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 28th day of August, 2025 at Chennai. Sd/- Sd/- (जॉज जॉज क े) (George George K) उपा / Vice President (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 28th August, 2025. EDN/- आदेश क\u0019 \bितिल प अ े षत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF Printed from counselvise.com "