SIRAJ SUHAIL AHMEED,CHENNAI V. ITO, WARD-1, KRISHNAGIRI

ITA 44/CHNY/2025

AI Insights

The case involves Mr. Siraj Suhail Ahmeed, the appellant, who contested the order of the CIT(A) confirming the AO's addition of Rs.54,92,500 as unexplained cash deposit under section 68 of the Income Tax Act, 1961. The AO had initially issued a notice under section 148 due to non-declaration of a substantial cash deposit in the assessee's bank account for the assessment year 2017-18. Despite notices under sections 142(1) and 154, the assessee failed to provide satisfactory explanations, leading to the addition being treated as unexplained income. The CIT(A) confirmed this addition ex-parte as the assessee did not appear. The Tribunal, considering the principles of natural justice, decided to grant a fresh opportunity of hearing to the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29855 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMANTHA MULLAMUDI
• Assessee Lawyers: R.K.V. SUNDAR
• Keywords: Set aside; Principle of natural justice; Rectification of order
• Section: 154

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ \u000fा यपीठ, चे\u0014ई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘A’ BENCH, CHENNAI \u0016ी मनु क ुमा र िग\u001bर ,\u000fा ियक सद एवं \u0005ी अिमता भ शु#ा , लेखा सद यक े सम\u0011 BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.44/Chny/2025 (िनधा\u0005रण वष\u0005 / Assessment Year: 2017-18) Mr.Siraj Suhail Ahmeed, C/o. Shri T.N.Seetharaman, Advocate #384 (old No.196), Lloyds Road, Chennai-600 086. Vs Income Tax Officer, Ward-1, Krishnagiri. PAN : CHWPS-5773-F (अपीलाथ\u000f/Appellant) (\u0010\u0011यथ\u000f/Respondent) अपीलाथ\u000fक\u0014ओरसे/ Appellant by : Mr. R.K.V. Sundar, Advocate \u0010\u0011यथ\u000fक\u0014ओरसे/Respondent by : Mrs.Samantha Mullamudi, Addl. CIT सुनवाईक\bतारीख/Date of hearing : 25.03.2025 घोषणाक\bतारीख /Date of Pronouncement : 01.04.2025 आदेश आदेश आदेश आदेश / O R D E R PER MANU KUMAR GIRI, JM: The captioned appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 27.09.2024 for Assessment Year 2017-18. 2. The registry has noted delay of 39 days in filing the respective 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 under: The assessee is an individual filed his return of income for assessment year 2017-18, admitting income of Rs.3,11,440/-. The AO noted that an information (ITS DATA) has been received from Ward-1. Krishnagiri that assessee had made cash deposit 2 ITA No. 44 /Chny/2025 amounting to Rs.54,92,500/- in his bank account maintained with KVB, Krishnagiri relevant to the AY 2017-18. However, the assessee failed to declare the same in return of income and difference in income of the assessee of Rs.54,92,500/- escaped assessment. Therefore the AO issued notice u/s.148 of the Act dated 31.03.2021 for which assessee had filed return of income. Subsequently, the AO issued notice u/s.142(1) of the Act on 28.02.2022 requiring the assessee to furnish certain details, but the assessee failed to furnish any reply. Therefore, the AO concluded that the assessee failed to prove the source of cash deposit amounting to Rs.54,92,500/- and hence, made addition of said amount treating the same as unexplained cash deposit u/s.68 of the Income Tax Act, 1961. Further, the AO while completing assessment has not taken into account tax special rate of 60% u/s.115BBE and surcharge 25%. In order to rectify the mistake apparent on record, notice u/s.154 of the Act dated 18.11.2022 was issued to assessee proposing rectification. The assessee has failed to give any reply. Thus, the AO has passed rectification order dated 22.12.2022 computing tax at special rate @ 60% u/s.115BBE and surcharge of 25% on the addition made against the assessee. Assessee challenged the order of rectification passed u/s 154 of the Act before the ld.CIT(A) who proceeded ex-parte and confirmed the order of the AO. 4. Aggrieved by the CIT(A) order, assessee is in appeal before us. 5. Before us, the ld. Counsel for assessee submitted that the CIT(A) has sent the notices which were inadvertently not received by the assessee, hence the assessee was prevented from 3 ITA No. 44 /Chny/2025 appearance on the purported dates. Therefore, he prayed that the assessee may be provided an adequate and proper representation time to file evidence and documents, if any, to substantiate his explanation regarding addition. The ld.DR stated that the assessee has defaulted in appearing before the appellate authority hence, no lenient view is to be taken in this case and prayed for dismissal of appeal. 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. AO for de novo assessment hearing, 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 Ld.AO whose shall proceed for fresh assessment hearing 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 Ld.AO shall be at liberty to proceed with the assessment 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 ld.AO. 4 ITA No. 44 /Chny/2025 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 1st April, 2025 Sd/- Sd/- (अिमताभ शु#ा) ( मनु क ुमार िग\u001bर) ( Amitabh Shukla ) ( 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:01.04.2025 DS आदेश क\u0007 \bितिलिप अ\u000eेिषत/Copy to: 1.Appellant 2.Respondent 3. आयकर आयु\u0013/CIT Chennai/Madurai 4. िवभागीय \bितिनिध/DR 5. गाड फाईल/GF. "