SHAHULHAMMED THIVANOLI,TIRUNELVELI V. .ITO, WARD-5, , TIRUNELVELI

ITA 2620/CHNY/2024

AI Insights

The case involves Shahulhameed Thivanoli, who appealed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18. The primary issue arose from the assessee's failure to explain the source of a substantial cash deposit of Rs. 1,83,64,770 in his bank accounts during the financial year 2016-17. Initially, the AO added this amount as unexplained cash deposit under Section 68 of the Income Tax Act, treating it as income and taxing it at 60% as per Section 115BBE. The assessee's appeal to the CIT(A) was unsuccessful, leading to the current appeal before the Tribunal. The Tribunal noted the procedural lapses in the handling of the assessee's case, particularly the lack of adequate notice and opportunity to present his case, and thus decided to set aside the CIT(A)'s order and remand the case back to the AO for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472412 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D. KOMALI KRISHNA; IRS
• Assessee Lawyers: R. VENKATA RAMAN
• Keywords: Set aside; Principle of natural justice; Competent authority
• Section: 147; 142(1); 68

Judgement Text

" आयकर अपीलीय अिधकरण ‘बी’’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI माननीय ŵी मनोज क ुमार अŤवाल ,लेखा सद˟ एवं माननीय ŵी मनु क ुमार िगįर, Ɋाियक सद˟ क े समƗ। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER आयकरअपील सं./ ITA No.2620/Chny/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-2018) Shahulhameed Thivanoli, 2/187, Mela Pallivasal Street, Vallam Post, Shencottah Taluk, Tirunelveli 627 817. [PAN: AGIPT 4190N] Vs. The Income Tax Officer, Ward 4, Tirunelveli. (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Shri R. Venkata Raman, C.A., Ĥ×यथȸ कȧ ओर से /Respondent by : Ms. D. Komali Krishna, IRS, CIT. सुनवाई कȧ तारȣख/Date of Hearing : 17.12.2024 घोषणा कȧ तारȣख /Date of Pronouncement : 19.12.2024 आदेश / O R D E R PER 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 28.05.2024 for Assessment Year 2017-18. 2. The registry has noted delay of 79 days in filing the appeal. Considering the period of delay and reasons stated in the condonation application which is 2 ITA No. 2620 /Chny/2024 supported by an affidavit of Assessee, we condone the delay and admit the appeal for adjudication. 3. Brief facts of the case are that the assessee is an individual and had filed his return of income on 23.08.2019 at an income of Rs.3,24,990/- belatedly for the assessment year 2017-18. The case of the assessee re-opened on the basis of information available that the assessee had made cash deposit(credit) of Rs. 1,83,64,770/- in his bank accounts during the F.Y. 2016-17 relevant to A.Y. 2017- 18. In the return of income filed for the Asstt Year 2017-18 the assessee has not shown the banking transaction. The source of income of the cash deposit has not verified. After obtaining necessary approval from the competent authority, notice u/s 148 of the Act was issued on 21.11.2019 to the assessee. The assessee did not comply with the notice. Thereafter, notice u/s 142(1) of the Act was issued on 16.01.2020. No compliance was made by the assessee. Since, the assessee has failed to discharge his onus as laid upon him in the Act and no explanation with regard to source of these cash deposits, it was presumed that the assessee has nothing to say in respect of cash deposit(credit) of Rs. 1,83,64,770/- in his bank account during the year. Accordingly, a sum of Rs.1,83,64,770/- treating as unexplained cash deposit u/s 68 of the Act was added in the total income of the assessee. The amount of tax was calculated @ 60% as per Section 115BBE of the Act. Assessee further challenged the ex-parte order of assessment u/s 147 r.w.s 144 of the Act before the ld.CIT(A) who confirmed the order of the AO on merits. 3 ITA No. 2620 /Chny/2024 Although assessee was not able to represent before the ld.CIT(A) properly in short duration of notices issued. Aggrieved, assessee is in appeal before us. 4. Before the ld. Counsel for assessee submitted that the AO has not served notices or given sufficient time to file evidence and documents to substantiate his explanation. 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. 5. 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 properly 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 on merits 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. 4 ITA No. 2620 /Chny/2024 6. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 19th day of December, 2024 Sd/- Sd/- (मनोज क ुमार अŤवाल) (मनु क ुमार िगįर) (MANOJ KUMAR AGGARWAL) लेखा सद˟ / ACCOUNTANT MEMBER (MANU KUMAR GIRI) Ɋाियक सद˟ / JUDICIAL MEMBER चेɄई Chennai: िदनांक Dated : 19-12-2024 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 "