VASANTHAM SILKS,PALAKKAD V. ITO, WARD-4, PALAKKAD

ITA 582/COCH/2025

AI Insights

The case involves Vasantham Silks, a partnership firm engaged in the textile business, which did not file a return of income for the Assessment Year 2017-18. The Income Tax Officer (ITO) noted substantial deposits in specified bank notes during the demonetization period and issued notices under sections 142(1) and 144 of the Income Tax Act, 1961. The assessee's non-compliance led to an ex parte order adding the cash deposits as unexplained money. The CIT(A) dismissed the appeal for non-prosecution, prompting the assessee to appeal to the Tribunal. The Tribunal found that the CIT(A) had not adequately addressed the appeal on merits and remanded the case for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782015 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 19-08-2025
• Other Referred Cases: PCIT vs. Premkumar Arjundas Luthra 279 CTR 614
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: M. V. VENUGOPAL
• Section: 144; 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 582/Coch/2025 Assessment Year: 2017-18 Vasantham Silks .......... Appellant A H Plaza Agali Post, Mannarkkad Taluk Palakkad 678581 [PAN: AAKFV4469L] vs. The Income Tax Officer, Ward-4, Palakkad .......... Respondent Assessee by: Shri M.V. Venugopal, CA Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 27.10.2025 Date of Pronouncement: 28.10.2025 O R D E R This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-2, Chandigarh [CIT(A)] dated 01.01.2025 for Assessment Year (AY) 2017-18. 2. Brief facts of the case are that the assessee is a partnership firm engaged in the business of Textiles. Return of income for AY 2017-18 was not filed by the assessee. The AO found that the assessee had deposited huge amount in specified bank notes (SBN) during demonetisation period. The AO issued notice u/s. 142(1) of the Income Tax Act, 1961 (the Act) on 09.03.2018 and show cause Printed from counselvise.com 2 ITA No. 582/Coch/2025 Vasantham Silks notice on 08.07.2019. The assessee did not comply with the notice issued u/s. 142(1) of the Act. Therefore, the AO was constrained to pass exparte order u/s. 144 of the Act after making addition of cash deposits as unexplained money of the appellant. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order dismissed the appeal exparte for non prosecution. 4. Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal. 5. I heard the rival contentions and perused the material available on record. I find that the learned CIT(A) dismissed the appeal in limine for non prosecution. As contemplated u/s. 250(6) of the Act the CIT(A) is required to frame points of determination followed by a detailed discussion thereupon before passing the order. It is the settled position of law that the CIT(A), even while disposing of the appeal exparte, is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra 279 CTR 614. Therefore, in the light of the above legal position I am of the considered view that the matter requires to be remanded to the file of the CIT(A) with the direction to dispose of the appeal de novo on merits after affording reasonable opportunity of hearing to the assessee.` Printed from counselvise.com 3 ITA No. 582/Coch/2025 Vasantham Silks 6. In the result, the appeal filed by the assessee is allowed for statistical purposes Order pronounced in the open court on 28th October, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 28th October, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File Assistant Registrar ITAT, Cochin Printed from counselvise.com "