S.M. STEEL,NAGAPATTINAM V. ITO, WARD-1, KUMBAKONAM

ITA 2947/CHNY/2024

AI Insights

The case involves S.M. Steel, the appellant, who faced scrutiny from the Income Tax Department for unexplained cash deposits amounting to \\u20b91,03,88,000 and interest income of \\u20b97,704 for the assessment year 2017-18. The Assessing Officer treated these as unexplained money under section 69A of the Income Tax Act, 1961, due to the assessee's failure to respond to notices and provide evidence of the source of these deposits. The Commissioner of Income Tax (Appeals) upheld this decision. The Tribunal, considering the appellant's non-compliance was not willful but due to circumstances beyond control, decided to remand the case for a fresh assessment after the payment of costs.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107569 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.ANITA
• Assessee Lawyers: N. ARJUN RAJ
• Keywords: Unexplained cash credit; TDS
• Section: 148; 142(1); 133(6); 69A

Judgement Text

"आयकर अपीलीय अिधकरण, ’सी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी अिमताभ शुƑा, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Amitabh Shukla, Accountant Member आयकर अपील सं./I.T.A. No.2947/Chny/2024 िनधाŊरण वषŊ/Assessment Year: 2017-18 S.M. Steel, No. 12 A1, Thanthontrieswarar Sannat Street, Nidur Main Road, Mayiladuthurai, Nagapattinam 609 001. [PAN:ACEFS1788D] Vs. The Income Tax Officer, Ward 1, Kumbakonam. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri N. Arjun Raj, Advocate ŮȑथŎ की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 22.01.2025 घोषणा की तारीख /Date of Pronouncement : 23.01.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 25.09.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18. 2. At the outset, we note that the Assessing Officer received information that the assessee made cash deposit in current account with a banking company to the tune of ₹.1,03,88,000/- and as per the TDS I.T.A. No.2947/Chny/24 2 return the assessee received other interest of ₹.7,704/-. The assessee did not file return of income for the F.Y. 2016-17 relevant to the assessment year 2017-18. In response to the notice under section 148 of the Income Tax Act, 1961 [“Act” in short] dated 23.03.2021, the assessee has not filed its ITR for AY 2017-18. The Jurisdictional Assessing Officer issued questionnaire along with notice under section 142(1) of the Act, which was also not complied with. As per details collected from Lakshmi Vilas Bank under section 133(6) of the Act, the Assessing Officer noted that the assessee has credited ₹.1,03,88,000/- by way of cash during the year under consideration which remained unexplained cash credit in the hands of the assessee firm. Since the assessee did not furnish any evidence to substantiate the source of such cash deposit as well as interest income earned of ₹.7,704/-, the Assessing Officer treated the same as unexplained money under section 69A of the Act and added to the total income of the assessee. On appeal, the ld. CIT(A) confirmed the additions made by the Assessing Officer since there was no response to notices issued by the ld. CIT(A). 3. The ld. AR Shri N. Arjun Raj, Advocate submits that non appearance of the assessee before the ld. CIT(A) is neither wilful nor deliberate but due to circumstances beyond its control. He also submits I.T.A. No.2947/Chny/24 3 that the notices sent through email were completely missed out as the employees of the firm were not conversant with the e-proceedings and electronic devises. He also submits that the assessee firm was closed and not functioning during the Covid pandemic period and prayed that one more opportunity may be afforded to the assessee to pursue its case before the authorities below. 4. The ld. DR Ms. R. Anita, Addl. CIT opposed the same and drew our attention to para 5.7 of the impugned order and argues that the ld. CIT(A) has given ample of opportunities to the assessee, but, it was not availed. She vehemently argued that the costs may be imposed in case this Tribunal afford an opportunity by remanding the matter to the file of the ld. CIT(A). 5. Considering the facts and circumstances of the case and submissions of the ld. AR and the ld. DR, in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) subject to the condition of payment of ₹.5,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of receipt of this order and the ld. CIT(A) shall satisfy the payment of cost and decide the issue afresh after considering the written submissions/ I.T.A. No.2947/Chny/24 4 documentary evidence as may be filed by the assessee to substantiate its claim. Thus, the grounds raised by the assessee are allowed for statistical purposes. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 23rd January, 2025 at Chennai. Sd/- Sd/- (AMITABH SHUKLA) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 23.01.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. "