SRI VISHNU CHIT FUNDS,COIMBATORE V. ITO, NCW-1(4), COIMBATORE

ITA 2076/CHNY/2025

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The case involves Sri Vishnu Chit Funds, a partnership firm engaged in the chit fund business, which did not file its income tax return for the assessment year 2017-18. The Income Tax Department selected the case for scrutiny under section 148 of the Income Tax Act due to a significant cash deposit of Rs. 1,07,82,000. The assessee failed to respond to multiple notices and did not provide documentary evidence to substantiate its claims, leading the Assessing Officer to treat the amount as unexplained income under section 68 of the Act. The assessee's appeal to the CIT(A) was dismissed due to a substantial delay in filing. The Tribunal, after considering the circumstances, decided to remit the case back to the Assessing Officer for a de novo assessment, emphasizing the need for the assessee to be diligent in providing necessary documents and submissions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773057 (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: R. ANITHA
• Assessee Lawyers: Y. SRIDHAR; N.V.MANOHAR REDDY
• Keywords: Condonation of delay; Set aside

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.: 2076/Chny/2025 \u001aनधा$रण वष$ / Assessment Year: 2017-18 Sri Vishnu Chit Funds, No. 1D, 12th Street, Jothi Nagar, Uppilipalayam, Coimbatore – 641 015. vs. ITO Non – Corp Ward -1 (4), Coimbatore. [PAN: AAQFS-8744-M] (अपीलाथ&/Appellant) ('(यथ&/Respondent) अपीलाथ& क) ओर से/Appellant by : Mr. Y. Sridhar, C.A. & Mr. N. V. Manohar Reddy, C.A. '(यथ& क) ओर से/Respondent by : Ms. R. 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 12.06.2025. Printed from counselvise.com :-2-: ITA. No:2076/Chny/2025 2. The brief facts of the case are that the assessee was a partnership firm engaged in the business of chit fund company and had not filed the return of income for the A.Y 2017-18. The case was selected for scrutiny u/s.148 for the A.Y.2017-18 with the issue that “cash deposit of Rs.1,07,82,000/-.” The assessee had neither filed the return of income u/s.139 of the Act nor u/s.148 of the Act for the A.Y 2017-18. The assessee was asked to file the return by issuing notice u/s.142(1) of the Act along with a detailed questionnaire. However, the assessee did not file return of income. Further, the AO issued statutory notices to the assessee. Since, the assessee did not respond to any notices and to the draft assessment order and filed the written submission without any supporting documents. On perusal of the written submission, the AO not convinced with the reply without documentary evidence and made an addition of Rs.1,07,82,000/- as unexplained income u/s.68 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. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), NFAC. 4. At the outset, we observed that the ld.CIT(A) found that there was a substantial/huge delay of 424 days in filing appeal which has been acknowledged by assessee in Form No.35 and the ld.CIT(A) was not convinced with reasons for condonation of delay and dismissed the assessee’s appeal in limine as not maintainable by passing an order dated Printed from counselvise.com :-3-: ITA. No:2076/Chny/2025 12.06.2025. In view of the above, the ld.AR prayed for one more 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. 5. 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). 6. 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. 7. 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 Printed from counselvise.com :-4-: ITA. No:2076/Chny/2025 AO to denovo frame the assessment order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so. 8. 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 "