RAJENDRAN,COIMBATORE V. ITO, NCW-3(1), COIMBATORE

ITA 549/CHNY/2025

AI Insights

The case involves Shri Rajendran, an individual engaged in the jewellery business, who appealed against the order of the Commissioner of Income Tax (Appeals) confirming the addition of Rs. 34,36,500 as unexplained money under section 69A of the Income Tax Act, 1961. This amount was deposited in cash during the demonetization period. The Assessing Officer (AO) had issued a notice under section 142(1) to verify the nature and source of these deposits, to which the assessee failed to provide satisfactory explanations. The CIT(A) upheld the AO's decision due to the absence of any submissions or evidence from the assessee. The Tribunal, considering the principles of natural justice, decided to grant another opportunity for the assessee to present his case before the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126072 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: ABHISHEK MURALI
• Keywords: Set aside; Principle of natural justice
• Section: 20

Judgement Text

" आयकर अपीलीय अिधकरण, ‘सी’ \u000fा यपीठ, चे\u0014ई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘C’ BENCH, CHENNAI \u0016ी मनु क ुमा र िग\u001bर ,\u000fा ियक सद एवं \u0016ी एस . आर . रघुना था , लेखा सद क े सम& BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.549/Chny/2025 (िनधा\u0005रण वष\u0005 / Assessment Year: 2017-18) Shri Rajendran, 51, Sri Vasantham, Srinivasaraghavan Street, R.S.Puram, Coimbatore-641 002. Vs The Income Tax Officer, Non-Corporate Ward-3(1) Coimbatore. PAN : AEFPR-2842-Q (अपीलाथ\u000f/Appellant) (\u0010\u0011यथ\u000f/Respondent) अपीलाथ\u000fक\u0014ओरसे/ Appellant by : Mr. Abhishek Murali, CA \u0010\u0011यथ\u000fक\u0014ओरसे/Respondent by : Ms. Anitha, Addl.CIT सुनवाईक\bतारीख/Date of hearing : 23.04.2025 घोषणाक\bतारीख /Date of Pronouncement : 24.04.2025 आदेश आदेश आदेश आदेश / O R D E R PER MANU KUMAR GIRI, JM: The captioned appeal preferred by the assessee is against the impugned order dated 18.01.2024 passed by the ld. Commissioner of Income Tax (Appeals), (NFAC) Delhi [CIT(A)] dated 18.01.2024 for Assessment Year 2017-18. 2. The registry has noted delay of 331 days in filing the appeal. Considering the reasons stated in the affidavit by the Assessee, we condone the delay and treat the reasons as ‘sufficient cause’ and admit the appeal for adjudication. 3. Brief facts are as follows:- 2 ITA No.549/Chny/2025 The assessee is an individual engaged in jewellery business for the past 20 years filed his return of income declaring Rs.7,61,550/- for the AY 2017-18. During the course of assessment proceedings, AO noticed that assessee has deposited cash of Rs.34,36,500/- during demonetization period. In order to verify nature and source of cash deposits, the AO issued notice u/s.142(1) to the assessee on 01.05.2019, requiring the assessee to prove source of cash deposits. Since the assessee failed to substantiate the source of cash deposits made during demonetization period, the AO has made addition of the entire cash deposit amounting to Rs.34,36,500/- u/s.69A as unexplained money. 4. Aggrieved, the assessee challenged the assessment order before the CIT(A). However, before the CIT(A), the assessee neither filed written submissions nor furnished documentary evidence in support of its claim. Therefore, the CIT(A) confirmed the addition made by the AO u/s.69A of the Act. Aggrieved, now the assessee is in appeal before us. 5. The learned counsel for the assessee pleaded for one more opportunity of hearing before the CIT(A) to prove the nature and source of cash deposits by filing confirmation letters. The Ld. CIT- DR pleaded for dismissal of the appeal. 3 ITA No.549/Chny/2025 6. We have heard rival submissions and perused material on record. Though we concur with the submissions of Ld. DR, however, keeping in mind the principle of natural justice, we deem it appropriate to grant another opportunity of hearing to the assessee. We also find that assessee has not represented before the ld.CIT(A) despite notices for the reasons stated above. Even, assessment has been done on the basis of no explanation by the assessee. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. CIT(A) for de novo adjudication, after affording proper opportunity of hearing to the assessee, subject to cost of Rs.5,000/- 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 the CIT(A), who shall proceed for fresh adjudication, after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents etc. if any, forthwith without any fail, failing which CIT(A) shall be at liberty to proceed with the proceedings as per law. The ld. AR, who appeared also assured the bench that he will ensure that the assessee will prosecute his case diligently before the CIT(A). 4 ITA No.549/Chny/2025 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 24th April, 2025 Sd/- Sd/- (एस . आ . रघुनाथा) ( मनु क ुमार िग\u001bर ) ( S.R.Raghunatha ) ( Manu Kumar Giri) लेखा लेखा लेखा लेखा सद\u0003य सद\u0003य सद\u0003य सद\u0003य / Accountant Member \u000fाियक सद / Judicial Member चे\u0019ई/Chennai, \u001bदनांक/Date:24.04.2025 DS आदेश क\u0007 \bितिलिप अ\u000eेिषत/Copy to: 1.Appellant 2.Respondent 3. आयकर आयु\u0013/CIT Chennai/Madurai/Coimbatore/Salem 4. िवभागीय \bितिनिध/DR 5. गाड फाईल/GF. "