SRI KAMADHENU ENTERPRISES,TIRUCHENGODE V. ITO, WARD-1(1), TIRUCHENGODE

ITA 485/CHNY/2025

AI Insights

The case involves Sri Kamadhenu Enterprises, a firm engaged in the business of hydraulic hoses, which did not file a return of income for the assessment year 2017-18. The Income Tax Department noted cash deposits of Rs. 32,35,000 during the demonetization period and issued a notice under section 142(1) of the Income Tax Act, requiring the filing of a return and details of the deposits. The Assessing Officer (AO), unsatisfied with the response, made an addition of Rs. 32,35,000 as unexplained money under section 69A and estimated business income at 8% of total turnover. The CIT(A) upheld the AO's decision due to non-compliance by the assessee. The assessee appealed to the Tribunal, which decided to set aside the CIT(A)'s order and remand the case back to the AO for a fresh assessment, citing the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126659 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITHA
• Assessee Lawyers: T.S. LAKSHMI VENKATRAMAN
• Keywords: Set aside; Business income; Principle of natural justice; Total Turnover; Commissioner; Partners; Commissioner of Income Tax; Statistical purposes; Restored; Department; Explanation; Services

Judgement Text

" आयकर अपीलीय अिधकरण, ‘सी’ \u000fा यपीठ, चे\u0014ई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘C’ BENCH, CHENNAI \u0016ी मनु क ुमा र िग\u001bर ,\u000fा ियक सद एवं \u0016ी एस . आर . रघुना था , लेखा सद क े सम& BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.485/Chny/2025 (िनधा\u0005रण वष\u0005 / Assessment Year: 2017-18) Sri Kamadhenu Enterprises, Door No.38-C Rana Lodge Opposite, Workshop line -1, Sankari Road, Tiruchengode-637 211. Vs The Income Tax Officer, Ward-1(1), Tiruchengode. PAN : ABPFS-6265-B (अपीलाथ\u000f/Appellant) (\u0010\u0011यथ\u000f/Respondent) अपीलाथ\u000fक\u0014ओरसे/ Appellant by : Mr.T.S.Lakshmi Venkatraman, FCA \u0010\u0011यथ\u000fक\u0014ओरसे/Respondent by : Ms. Anitha, Addl.CIT सुनवाईक\bतारीख/Date of hearing : 22.04.2025 घोषणाक\bतारीख /Date of Pronouncement : 23.04.2025 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. Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 24.12.2024 for Assessment Year 2017-18. 2. Brief facts are as under: The assessee firm is engaged in the business of hydraulic hoses for rig units on retail basis under partnership. The assessee has not filed return of income for the year under consideration. As per information available with the department, Assessee had deposited cash of Rs.32,35,000/- in bank accounts during demonetization period. Therefore, notice u/s.142(1) was issued to the assessee requiring the assessee to file return of income and requisite details. 2 ITA No. 485/Chny/2025 The AO being not satisfied with the reply furnished by the assessee proceeded to pass ex-parte order on best judgement basis and made addition of Rs.32,35,000/- on account of cash deposits made during demonetization period as unexplained money u/s.69A of the Act and estimated the business income @ 8% of total turnover amounting to Rs.34,62,382/-. 3. Aggrieved, the assessee challenged the assessment order before the CIT(A). However, the CIT(A) confirmed the order of the AO for non-compliance of the notices issued by CIT(A). 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 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. 3 ITA No. 485/Chny/2025 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. 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 23rd April, 2025 Sd/- Sd/- (एस . आर . रघुनाथा) ( मनु क ुमार िग\u001bर ) ( S.R.Raghunatha ) ( 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:23.04.2025 DS आदेश क\u0007 \bितिलिप अ\u000eेिषत/Copy to: 1.Appellant 2.Respondent 3. आयकर आयु\u0012/CIT Chennai/Madurai/Coimbatore/Salem 4. िवभागीय \bितिनिध/DR 5. गाड\u001b फाईल/GF. "