RAJARAM SEENIVASA RAGAVAN, SIVAKASI, VIRUDHUNAGAR DISTRICT,SIVAKASI, VIRUDHUNAGAR DISTRICT V. .INCOME TAX OFFICER, WARD 4, INCOME TAX OFFICE, VIRUDHUNAGAR, VIRUDHUNAGAR

ITA 2759/CHNY/2024

AI Insights

The case involves Rajaram Seenivasa Ragavan, an individual engaged in the business of fireworks agency, who appealed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18. The assessee failed to file his income tax return on time due to medical reasons and was later found to have made substantial cash deposits in his bank accounts. The Assessing Officer issued notices under section 142(1) of the Income Tax Act, 1961, and upon non-compliance, conducted an assessment under section 144, adding the deposits as unexplained income under section 69A. The assessee's appeal to the CIT(A) was dismissed ex-parte, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472434 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V. ASWATHY; IRS
• Assessee Lawyers: N.V. NARAYANAN
• Keywords: Set aside; Principle of natural justice
• Section: 144; 142(1); 143(2); 44AD; 69A

Judgement Text

" आयकर अपीलीय अिधकरण ‘डी’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI माननीय ŵी मनु क ुमार िगįर, Ɋाियक सद˟ एवं माननीय ŵी अिमताभ शुƑा . लेखा सद˟ क े समƗ। BEFORE HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND HON’BLE SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकरअपील सं./ ITA No.2759/Chny/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-2018) Rajaram Seenivasa Ragavan, No.24, V.K.M. Street, Sivakasi 626 123. [PAN: AVXPS 0467P] Vs. The Income Tax Officer, Ward 4, Virudhunagar. (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Shri N.V. Narayanan, Advocate Ĥ×यथȸ कȧ ओर से /Respondent by : Ms. V. Aswathy, IRS, JCIT. सुनवाई कȧ तारȣख/Date of Hearing : 18.12.2024 घोषणा कȧ तारȣख /Date of Pronouncement : 23.12.2024 आदेश / O R D E R MANU KUMAR GIRI (Judicial Member) This appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 30.08.2024 for Assessment Year 2017-18. 2. Brief facts of the case are that the assessee is an individual engaged in the business of fireworks agency. For the relevant Assessment Year, the assessee could not file the return of income due to medical treatment. The assessing officer received information that the assessee made cash deposits of Rs.38,46,000/- in his two bank accounts and therefore issued notice under section 142(1) of the Income 2 ITA No.2759/Chny/2024 Tax Act, 1961 (in short ‘’the Act’’) dated 29.01.2018 and again on 21.08.2019. In response to the above notice dated 21.08.2019, the assessee filed his return of income on 27.08.2019 admitting total income of Rs.4,48,980/- under section 44AD of the Act on estimate basis. The assessing officer did not issue any notice under section 143(2) after the assessee filed his return of income. The assessing officer conducted enquiry with the bank and found that the cash deposits made was Rs.39,16,000/- and all the credits in the bank accounts including the cash deposits were Rs.1,00,97,981/- and completed the assessment under section 144 on 31.12.2019 on the ground that the assessee did not file his return of income within the time allowed in the notice under section 142(1) dated 29.01.2018. He added Rs.39,16,000/- under section 69A and estimated the income @ 8% on the remaining credits in the bank account statement at Rs.4,90,858/- and thus determined the total income at Rs.44,51,958/-. Aggrieved, assessee further challenged the order of assessment u/s 144 of the Act before the ld.CIT(A) who proceeded ex-parte and dismissed the appeal on merits. Aggrieved, assessee is in appeal before us. 3. Before us, the ld. Counsel for assessee submitted that the assessee has inadvertently not received the notices issued by the AO and the ld.CIT(A) hence, asessee failed to avail opportunity to file evidence and documents to substantiate his explanation regarding deposits. The ld.DR stated that the assessee is habitual defaulter in appearing before the appellate authority hence no lenient view is to be taken in this case and prayed for dismissal of appeal. 3 ITA No.2759/Chny/2024 4. Though we concur with the submissions of Ld. Sr. DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. We also find that assessee has not represented before the ld.CIT(A) despite notices. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. AO for denovo assessment subject to cost of Rs.5000/- which shall be deposited by the assessee within 30 days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before Ld.AO whose shall proceed for denovo assessment after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence, confirmations and documents, if any, forthwith without any fail, failing which Ld. AO shall be at liberty to proceed with the assessment proceedings on merits as per law. 5. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 23rd day of December, 2024 at Chennai. Sd/- Sd/- (अिमताभ शुƑा) (AMITABH SHUKLA) लेखा सद˟ / ACCOUNTANT MEMBER (मनु क ुमार िगįर) (MANU KUMAR GIRI) Ɋाियक सद˟ / JUDICIAL MEMBER चेɄई Chennai: िदनांक Dated :23-12-2024 KV आदेश कȧ ĤǓतͧलͪप अĒेͪषत /Copy to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Chennai/Coimbatore/Madurai/Salem. 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF "