SANJAI BALASUBRAMANIAM,TIRUCHENGODE V. ITO, WARD-1, , TIRUCHENGODE

ITA 350/CHNY/2025

AI Insights

The case involves Sanjai Balasubramaniam, an individual engaged in the business of cloth export, who appealed against the orders of the Income Tax Officer and the Commissioner of Income Tax (Appeals). The initial assessment for the year 2017-18 was reopened, and an ex parte order was passed estimating the income from business at 8% of turnover and adding Rs. 25,93,632 as interest and duty drawback income. The assessee did not participate in the assessment or the subsequent appeal proceedings, leading to the dismissal of his appeals. The Tribunal, considering the principles of natural justice and the non-participation of the assessee, decided to remit the matter back to the Assessing Officer for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 313094 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: Tin Box Company vs CIT, [2001] 249 ITR 216 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KEERTHI NARAYANAN
• Assessee Lawyers: T.S. LAKSHMI VENKATARAMAN; F
• Keywords: Set aside; Principle of natural justice
• Section: 144

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ᮰ी एबी टी वक᳹, ᭠याियक सद᭭य एवं ᮰ी एस. आर. रघुनाथा, लेखा सद᭭य के समᭃ BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 350/Chny/2025 िनधाᭅरण वषᭅ / Assessment Year: 2017-18 Sanjai Balasubramaniam, No.24/1, New Street, Raja Goundampalayam, Tiruchengode – 637 209. vs. Income Tax Officer - Ward 1, Sri Balaji Towers, No.183, Municipality Area, Bunglow Str., Erode Main Road, Tiruchengode – 637 211. [PAN: AVIPS-3226-M] (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri. T.S.Lakshmi Venkataraman, F.C.A. ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri. Keerthi Narayanan, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 22.04.2025 घोषणा कᳱ तारीख/Date of Pronouncement : 28.04.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER: This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals), ADDL/JCIT (A)-3, National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017- 18, dated 05.12.2024. 2. The assessee is an individual engaged in the business of export of cloth sales and filed his return of income manually for the assessment year 2017-18 on 02.05.2018 declaring total income of :-2-: ITA. No:350 /Chny/2025 Rs.4,40,070/-. The case was reopened accordingly, statutory notices were issued to the assessee. However, the assessee did not participate in the assessment proceedings and hence the assessing officer passed an exparte order under Section 144 r.w.s 147 of the Act dated 27.12.2019 by estimating income from business @ 8% of the turnover and also making an addition of Interest and duty drawback income Rs.25,93,632/- by rejecting the income declared in the return of income. Subsequently, the assessee filed an appeal before the ld. CIT (A), NFAC. However, the assessee did not participate in the appeal proceedings, in spite of providing four opportunities by the ld.CIT(A) from 22.02.2021 to 22.11.2024 as noted in paragraph 3 of the ld.CIT(A) order. Hence, the ld.CIT(A) passed an order dated 05.12.2024 by confirming the Assessing Officer’s order and dismissed the appeal of the assessee. Aggrieved by the order of the ld. CIT (A), the assessee is in appeal before us. 3. The ld.AR submitted that on the facts and circumstances of the case the order of the lower authorities in dismissing the appeal of the assessee is bad in law and is not legally justified. The ld.AR brought to our notice that both the orders of the Assessing Officer and that of ld.CIT(A) are passed without the participation of the assessee and hence prayed for one more opportunity before the Assessing Officer in the interest of natural justice. Further, the ld.AR stated that he :-3-: ITA. No:350 /Chny/2025 undertakes to appear before the Assessing Officer and submit all the required information and documents as and when called for. 4. Per contra, the ld.CIT (A) fairly conceded for remitting the matter back to the Assessing Officer, since the order was passed u/s.144 of the Act. 5. We have heard the rival contentions and perused the material on record and gone through the orders of the lower authorities. We note that the Assessing Officer has passed an exparte order by considering the information available with the department and made an addition and the same has been dismissed by the ld.CIT(A) - NFAC due to non-participation of the assessee in the first appellate proceedings. Therefore, we set aside the order of the ld.CIT(A), to meet the ends of justice we remit the matter back to the file of Assessing Officer by relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Company vs CIT, [2001] 249 ITR 216 (SC) and direct AO to denovo frame the assessment order in accordance to law, after providing reasonable opportunity to the assessee. Since the assessee has failed to participate in the appellate proceedings, we levy the cost of Rs.5,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras and produce proof of payment of cost to the Registry within 30 days from the date of receipt of this order. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so. :-4-: ITA. No:350 /Chny/2025 6. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 28th April, 2025 at Chennai. Sd/- Sd/- (एबी टी वकŎ ) (ABY T VARKEY) Ɋाियक सद˟/Judicial Member (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखासद˟/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated, the 28th April, 2025 sp आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3.आयकर आयुƅ/CIT– Chennai/Coimbatore/Madurai/Salem 4. िवभागीय Ůितिनिध/DR 5. गाडŊ फाईल/GF "