SHRI KRISHNA CHIT FUNDS,COIMBATORE V. ITO, NCW-1(4), COIMBATORE

ITA 2075/CHNY/2025

AI Insights

The case involves Shri Krishna Chit Funds, a firm engaged in the business of chit funds, which did not file a return of income for the assessment year 2017-18. The Assessing Officer (AO) made an addition of Rs.1,66,73,250 as unexplained money under section 69A of the Income Tax Act, due to non-response to notices. The CIT(A) upheld this decision, leading to the appeal. The Tribunal noted the assessee's failure to respond previously but decided to remit the case back to the AO for a fresh assessment, emphasizing the need for the assessee to be diligent and participate actively.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793064 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Appeal Filed On: 28-07-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: Y. SRIDHAR; F.; N.V.MANOHAR REDDY
• Keywords: Set aside; Reasonable cause

Judgement Text

" आयकर अपील य अ धकरण, ‘सी’ \u000eयायपीठ, चे\u000eनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI \u0015ी मनु क ुमार ग\u0019र, \u000eया\u001aयक सद य एवं \u0015ी एस. आर. रघुनाथा, लेखा सद य क े सम# BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 2075/Chny/2025 \u001aनधा$रण वष$ / Assessment Year: 2017-18 Shri Krishna Chit Funds, No. 1D, 12th Street, Jothi Nagar, Uppilipalayam, Coimbatore – 641 015. vs. The Income Tax Officer, Non-Corporate Ward 1(4), Coimbatore. [PAN: ACXFS-5615-G] (अपीलाथ&/Appellant) ('(यथ&/Respondent) अपीलाथ& क) ओर से/Appellant by : Mr. Y. Sridhar, F.C.A. & Mr. N.V.Manohar Reddy, C.A. '(यथ& क) ओर से/Respondent by : Ms. Anitha, Addl.CIT सुनवाई क) तार ख/Date of Hearing : 17.09.2025 घोषणा क) तार ख/Date of Pronouncement : 24.09.2025 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), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017-18, vide order dated 20.03.2024. 2. At the outset, we find that there is a delay of 423 days in appeals filed by the assessee. The assessee submitted an affidavit for the delay stating that the assessee is a firm managed by its partner aged around 95 years old and the delay occurred due to illness and age-related medical complications and prayed Printed from counselvise.com :-2-: ITA. No:2075 /Chny/2025 that the delay be condoned. After considering the petition filed by the assessee and after hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeals on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeals and admit appeals filed by the assessee for adjudication. 3. The brief facts of the case are that the assessee was a firm engaged in the business of chit fund company and had not filed the return of income for the A.Y.2017-18. As per information available from the department, the AO found that the assessee made cash deposits and withdrawals from its current account. The assessee was asked to file the return by issuing notice u/s.142(1) of the Act. Further, the AO issued statutory notices to the assessee. Since, the assessee did not respond to any notices, the AO made an addition of Rs.1,66,73,250/- of cash deposit and withdrawals in the bank as unexplained money u/s.69A of the Act and passed an order u/s.147 r.w.s.144 r.w.s.144B of the Act on 25.03.2022. 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC. 5. At the outset, we observed that the ld.CIT(A) has provided two opportunities for the assessee to appear for hearings as detailed in page 10 of the CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld. CIT(A), NFAC was dismissed the assessee’s appeal by confirming the order of the AO dated 25.03.2022. In view of the above, the ld.AR prayed for one more Printed from counselvise.com :-3-: ITA. No:2075 /Chny/2025 opportunity before the AO, since the exparte order has been passed by the AO u/s.144 of the Act. Further, the ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the Assessing Officer to complete the assessment proceedings effectively. 6. Per contra, the ld.DR submitted that both the Assessing Officer and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A). 7. We have heard the rival parties and perused the material available 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, write submission and the same has been dismissed by the ld.CIT(A), NFAC, Delhi due to delay in filing of appeal by the assessee before the first appellate authority. Since the assessee has failed to participate both before the Assessing Officer as well as the appellate authority, 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. 8. In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after providing reasonable Printed from counselvise.com :-4-: ITA. No:2075 /Chny/2025 opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so. 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the court on 24th September, 2025 at Chennai. Sd/- Sd/- (मनु क ुमार ग\u0019र) (MANU KUMAR GIRI) \u000eया\u001aयक सद य/JUDICIAL MEMBER (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखासद य/ACCOUNTANT MEMBER चे\u000eनई/Chennai, -दनांक/Dated, the 24th September, 2025 sp आदेश क) '\u001aत/ल0प अ1े0षत/Copy to: 1. अपीलाथ&/Appellant 2. '(यथ&/Respondent 3.आयकर आयु2त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 0वभागीय '\u001aत\u001aन ध/DR 5. गाड$ फाईल/GF Printed from counselvise.com "