NATARAJAN RAJKUMAR,CHENNAI V. DCIT NON CORP CIRCLE 19(1), CHENNAI

ITA 3418/CHNY/2024

AI Insights

The case involves Natarajan Rajkumar, who appealed against the order of the Learned Commissioner of Income Tax, National Faceless Appeal Centre, Delhi, concerning the assessment year 2017-18. The primary issue was the addition of unexplained cash deposits amounting to Rs. 27,39,424 in the assessee's bank account during the demonetization period, which the Assessing Officer (AO) treated as unexplained and added under section 69 of the Income-tax Act, 1961. The CIT(A) upheld the AO's decision, noting the lack of convincing evidence from the assessee to substantiate his claim that the deposits were from agricultural income. The Tribunal found that the assessee was not given a fair opportunity to present his case and thus remitted the matter back to the CIT(A) for a fresh hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107094 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A. SASIKUMAR
• Assessee Lawyers: Y. SRIDHAR
• Keywords: Set aside; Principle of natural justice
• Section: 143(3); 69

Judgement Text

"आयकर अपीलीय अिधकरण, ‘डी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI \u0019ी यस यस िव\u001cने\u001e रिव, \u0011ा ियक सद एवं \u0019ी जगदीश, लेखा सद क े सम( BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3418/Chny/2024 िनधा :रण वष: /Assessment Year: 2017-18 Natarajan Rajkumar, No.18/10, Dr. Nagesan Salai, Ashok Nagar, Chennai – 6 00 083 Vs. The Dy. Commissioner of Income Tax, Non Corporate Circle-19(1), Chennai. [PAN: AAHPR 8089B] (अपीलाथ\u0007/Appellant) (\b\tयथ\u0007/Respondent) अपीला थG की ओर से/ Appellant by : Shri Y. Sridhar, FCA IJथG की ओर से /Respondent by : Shri A. Sasikumar, CIT सुनवा ई की ता रीख/Date of Hearing : 25.02.2025 घोषणा की ता रीख /Date of Pronouncement : 28.02.2025 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, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 19.06.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Income-tax Act, 1961 (hereinafter “the Act”) on 22.11.2019. ITA No.3418/Chny/2024 :- 2 -: 2. There is a delay of 122 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 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 brief facts of the case are that the assessee is an individual. The assessee has filed return of income on 28.03.2018, admitting total income of Rs.23,39,910/-. During the course of assessment proceedings, the A.O found that the assessee had deposited cash of Rs.27,39,424/- in his savings bank account during demonetization period. The A.O therefore issued a show cause notice to the assessee. In response to the show case notice, the assessee claimed that the cash deposit of Rs. 27,39,424/- was solely out of the agricultural income. However, the assessee failed to produce documentary proof as the cash deposits were from agricultural income. The AO, therefore, made entire cash deposits as unexplained and made addition u/s. 69 of the Act, assessing total income of Rs.24,39,424/-. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). ITA No.3418/Chny/2024 :- 3 -: 4. On appeal, the Ld. CIT(A) dismissed the appeal of the assessee holding as under: “5.2 As stated earlier in Para-4 of this order that appellant has chosen not to argue his case in the present proceedings. In the statement of fact the appellant has stated that he is basically an agriculturist. However, the very fact that the appellant had income of Rs. 23,39,910/- narrates a different story. Mere owning of land does not by itself mean that agricultural activities were being undertaken on the said parcel of land. The appellant further argues that he had undertaken the agricultural activities on cash basis, wherein the entire receipt was in cash and the expenditure incurred by it was also in cash. However, the pattern of the cash deposited in the bank account does not support the above argument of the appellant. An assessee who otherwise is engaged into other economic activities needs to prove with help of evidences the fact of agricultural activities. The appellant could not either at the time of regular assessment or during the present proceedings produce any document much less any convincing evidence that he had under taken agricultural activities on the said parcel of land from which income to the tune of Rs. 27,39,424/- could have been generated. In the given situation I do not find any error in the decision of the AO who relied upon the estimate provided by Village Administrative Officer and restricted the possible agriculture income to Rs. 3,00,000/- in the period FY 2015-16, 2016-17 and 2017-18. 5.3 I have carefully gone through grounds of appeal, filed by the appellant. These grounds are more like statement of facts. However, the grievance of the appellant only relates to refusal of the AO in accepting that the assessee had earned Rs.27,39,424/- from agricultural activities. This grievance has been adequately discussed an adjudicated in para-5.2 above. Therefore, individual grounds of appeal filed by the appellant is not being adjudicated. The appeal filed by the assessee fails.” 5. The Ld. Authorized Representative (A.R) of the assessee prayed for setting aside the order of the Assessing Officer for re-adjudication, since the case was not prosecuted before the Assessing Officer and ITA No.3418/Chny/2024 :- 4 -: the same has been confirmed by the Ld. CIT(A) without any discussion. 6. The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities. 7. We have heard the rival submissions, and perused the materials available on record. On perusal of the orders, we find that the AO and that of the Ld. CIT(A) have passed the orders without giving proper opportunity to the assessee. We are of the opinion that keeping in view the principles of natural justice, the assessee be provided with another opportunity of hearing to substantiate his case before the Ld. CIT(A). Accordingly, we set aside the order passed by the Ld. CIT(A) and remit the matter back to the file of the Ld. CIT(A) to adjudicate this appeal afresh in accordance with law, after giving reasonable opportunity to the assessee. We also direct the Assessee to appear before the Ld. CIT(A) on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only. ITA No.3418/Chny/2024 :- 5 -: 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 28th February, 2025. Sd/- Sd/- (यस यस िव\u001cने\u001e रिव) (SS Viswanethra Ravi) \u0001याियक \u0001याियक \u0001याियक \u0001याियक सद\bय सद\bय सद\bय सद\bय / Judicial Member (जगदीश) (Jagadish) लेखा लेखा लेखा लेखा सद\u0011य सद\u0011य सद\u0011य सद\u0011य /Accountant Member चे\u0013नई/Chennai, \u0016दनांक/Dated: 28th February, 2025. EDN/- आदेश क\u0019 \bितिल\u001cप अ\u001dे\u001cषत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b\tथ\u0007/Respondent 3. आयकर आयु\u000f/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय \bितिनिध/DR 5. गाड\u0018 फाईल/GF "