SRINIVASAN VARATHARAJ,CHENNAI V. ACIT, NCW-10(1), CHENNAI

ITA 579/CHNY/2025

AI Insights

The case involves Srinivasan Varatharaj, who appealed against the order of the Commissioner of Income Tax (Appeals) concerning the assessment year 2017-18. The primary contention was the ex parte order passed by the CIT(A) and issues on merits related to undisclosed income and unexplained investments. The assessee had made substantial cash deposits during the demonetization period, which were scrutinized by the Assessing Officer, leading to additions to the assessee's income. The CIT(A) had dismissed the appeal for want of prosecution, prompting the assessee to approach the Tribunal. The Tribunal found merit in remanding the case back to the CIT(A) to allow the assessee an opportunity to present his case with adequate documentation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312871 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M.P. GURUPRASAD
• Assessee Lawyers: SRICHARAN; SRINITHI
• Keywords: Condonation of delay; Unexplained investment; Income from undisclosed sources; Source of fund
• Section: 148; 142(1); 69

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी जगदीश, लेखा सद˟ क े समƗ । Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Jagadish, Accountant Member आयकर अपील सं./I.T.A. No.579/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2017-18 Srinivasan Varatharaj, 11, Kandan Street, Perambur S.O., Perambur, Chennai 600 011. [PAN:AVJPS1866L] Vs. The Assistant Commissioner of Income Tax, Non Corporate Ward 10(1), Chennai 600 034. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri Sricharan, CA & Ms. Srinithi, Advocate for Shri N.V. Balaji, Advocate ŮȑथŎ की ओर से/Respondent by : Shri M.P. Guru Prasad, Addl. CIT सुनवाई की तारीख/ Date of hearing : 22.04.2025 घोषणा की तारीख /Date of Pronouncement : 30.04.2025 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 08.11.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2017-18. 2. We find that this appeal is filed with a delay of 27 days. The assessee filed a petition for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said petition, we I.T.A. No.579/Chny/25 2 find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication. 3. The assessee mainly challenged the exparte order passed by the ld. CIT(A) besides challenging issues on merits. 4. Brief facts relating to the issue are that the assessee is an individual, running a provision stores and filed his return of income for AY 2017-18 on 31.10.2017 declaring taxable income of ₹.14,51,170/-. As per information available with the Department, the assessee made cash deposits of ₹.4,58,30,000/- during demonetization period in bank account maintained with the Indian Bank. Accordingly, after passing order under section 148A(d) of the Income Tax Act, 1961 [“Act” in short], the Assessing Officer issued notice under section 148 of the Act, besides, issuing notices under section 142(1) of the Act. After verification of details filed against notice under section 142(1) of the Act, the Assessing Officer noted that the assessee made cash deposit during demonetization period to the tune of ₹.1,07,55,000/-, out of which, ₹.46,15,000/- were in SBNs. Since the assessee could not furnish satisfactory explanation with documentary evidence towards source of such cash deposit in SBNs, the Assessing Officer treated an amount to an extent of ₹.46,15,000/- as I.T.A. No.579/Chny/25 3 income from undisclosed sources and added to the total income of the assessee. Further, the Assessing Officer noted that the assessee made payment of ₹.50,00,000/- towards purchase of immovable property (section 194IA of the Act). Since the assessee failed to furnish conclusive documentary evidence for the source of fund for purchase of immovable property against specific statutory notices, the Assessing Officer treated the same as unexplained investment under section 69 r.w.s. 115BBE of the Act. On appeal, the ld. CIT(A) dismissed the appeal of the assessee for want of prosecution. On being aggrieved, the assessee is in appeal before the Tribunal. 5. The ld. AR Shri Sricharan, C.A. submits that the assessee is running a provision store/grocery store, which always generate cash sales as it is a business of cash and carry on a day-to-day basis and moreover, not conversant with the e-proceedings and thereby, unable to respond to the notices issued by the ld. CIT(A). He also submits that the assessee is ready to furnish all details in support of the ground raised before the ld. CIT(A) and prayed to remand the matter to the file of the ld. CIT(A) for fresh consideration by affording opportunity to the assessee. 6. The ld. DR Shri M.P. Guru Prasad, Addl. CIT objected the submissions of the ld. AR by contending that the ld. CIT(A) had given I.T.A. No.579/Chny/25 4 various opportunities to the assessee, but, however, the assessee has not utilized the same in furnishing the details in support of the grounds raised by him. He supported the order of the ld. CIT(A). 7. Having heard both the parties and on perusal of the record, we note that the assessee could not furnish any details in support of the grounds raised by the assessee before the ld. CIT(A). Taking into consideration the facts and circumstances of the case and the issue involved therein, in the interest of justice, we deem it proper to remand the matter to the file of the ld. CIT(A) to decide the issue afresh after considering the written submissions/documentary evidences as may be filed by the assessee to substantiate his claims. The assessee is also directed to furnish complete details in support of the grounds raised before the ld. CIT(A). 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 30th April, 2025 at Chennai. Sd/- Sd/- (JAGADISH) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 30.04.2025 I.T.A. No.579/Chny/25 5 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. "