SOMASUNDARAM ARUMUGASWAMY,COIMBATORE V. ITO, WARD-1(4), COIMBATORE

ITA 3634/CHNY/2025

AI Insights

This case involves an appeal by Somasundaram Arumugaswamy against the order of the Commissioner of Income Tax (Appeals), which confirmed the additions made by the Assessing Officer for the assessment year 2023-24. The primary contention was regarding the disallowances under section 40A(3) of the Income Tax Act, 1961, related to cash payments. The Assessing Officer had added these amounts to the assessee's income, which was upheld by the CIT(A). The Tribunal, upon reviewing the assessment order and the payments in question, found discrepancies in the application of section 40A(3) and remanded the case for a detailed examination of the payments.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 845899 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Chennai
• Assessment Year: 2023-2024
• Appeal Filed On: 01-12-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GOUTHAMI MANIVASAGAM
• Assessee Lawyers: S. SRIDHAR; ERODE
• Keywords: Condonation of delay
• Section: 143(3); 142(1); 40A(3)

Judgement Text

"आयकर अपीलीय अिधकरण, ’बी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI ŵी इंट ूरी रामाराव, लेखा सद˟ एवं ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ क े समƗ । Before Shri Inturi Rama Rao, Accountant Member & Shri S.S. Viswanethra Ravi, Judicial Member आयकर अपील सं./I.T.A. No.3634/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2023-24 Somasundaram Arumugaswamy, No. 20/112, Karamadai Road, Mettupalayam H.O., Mettupalayam, Coimbatore 641 301. [PAN: AAQPA1013K] Vs. The Income Tax Officer, Non Corporate Ward 1(4), Coimbatore. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri S. Sridhar, Advocate (Erode) ŮȑथŎ की ओर से/Respondent by : Ms. Gouthami Manivasagam, Addl. CIT सुनवाई की तारीख/ Date of hearing : 04.03.2026 घोषणा की तारीख /Date of Pronouncement : 24.03.2026 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 27.09.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2023-24. 2. We find that this appeal is filed with a delay of one day. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on an examination of the said affidavit, Printed from counselvise.com I.T.A. No.3634/Chny/25 2 we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admit the appeal for adjudication. 3. The assessee raised 5 grounds amongst which the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer in the facts and circumstances of the case. 4. At the outset, we note that the assessee is an individual and filed return of income declaring total income of ₹.15,78,930/- on 30.09.2023 under section 139(1) of the Income Tax Act, 1961 [“Act” in short]. Under scrutiny, the Assessing Officer, by issuing statutory notices under section 143(2) and under section 142(1) of the Act along with show cause notice, completed the assessment, inter alia, making addition on account of disallowances under section 40A(3) of the Act and determined total income of the assessee at ₹.48,58,249/- vide his order dated 21.03.2025 under section 143(3) r.w.s. 144B of the Act. The ld. CIT(A) confirmed the same. Having aggrieved, the assessee challenged the same before the ld. CIT(A) and the ld. CIT(A) confirmed the addition made by the Assessing Officer and dismissed the appeal of the assessee. Printed from counselvise.com I.T.A. No.3634/Chny/25 3 5. Before us, the ld. AR Shri S. Sridhar, Advocate prayed to remand the matter to the file of the Assessing Officer for his verification as to whether the said cash payments exceeded statutory limit under section 40A(3) of the Act. He drew our attention to page 5, 6, 7 & 8 of the assessment order and submits that the payments were made under wages below ₹.10,000/- and the provisions under section 40A(3) of the Act are not applicable. He vehemently contended that no opportunity was offered by the Assessing Officer in this respect and prayed to remand the matter to the file of the Assessing Officer for fresh consideration. 6. The ld. DR Ms. Gouthami Manivasagam, Addl. CIT reported no objection. 7. Having heard both the parties and on perusal of the material available on record, we note that the Assessing Officer discussed the said issue from page 6 of the assessment order and we find the voucher, which are reproduced at page 7 of the assessment order, on an examination of the same, we note that all payments were below ₹.10,000/- and it is contrary to the findings of the Assessing Officer vide last para in page 6 of the assessment order. Therefore, considering the same, we deem it proper to remand the matter to the file of the Assessing for his fresh consideration and the assessee is at liberty to file evidences, Printed from counselvise.com I.T.A. No.3634/Chny/25 4 if any before the Assessing Officer for his consideration. Thus, the grounds raised by the assessee are allowed for statistical purposes. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 24th March, 2026 at Chennai. Sd/- Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 24.03.2026 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. Printed from counselvise.com "