VIKRAM REDDY,CHENNAI V. ITO, NCW-18(5), CHENNAI

ITA 311/CHNY/2025

AI Insights

The case involves Vikram Reddy, a salaried employee, who faced scrutiny over substantial cash deposits made in his accounts during and prior to the demonetization period. The Income Tax Officer assessed these deposits, totaling ₹3,88,93,360, and brought them to tax under section 69 of the Income Tax Act due to the absence of a filed return or explanation for the source of these deposits. Reddy's appeals against the initial assessment and the subsequent penalty for non-disclosure were initially dismissed by the CIT(A) due to a significant delay in filing, attributed to the COVID-19 pandemic and employer-related delays. The Tribunal found merit in Reddy's reasons for the delay and remitted the case back to the CIT(A) for a fresh evaluation on the merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107927 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• 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: A. SASIKUMAR
• Assessee Lawyers: T.V. MUTHU ABIRAMI
• Keywords: Condonation of delay; Opportunity of being heard
• Section: 144; 142(1); 69

Judgement Text

"आयकर अपीलीय अिधकरण,‘डी’ Ɋायपीठ,चेɄई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ŵी जॉजŊ जॉजŊ क े., उपाȯƗ एवं ŵी एस.आर.रघुनाथा, लेखा सद˟ क े समƗ BEFORE SHRI GEORGE GEORGE K., VICE-PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./ITA Nos.: 310 & 311/Chny/2025 िनधाŊरणवषŊ / Assessment Year: 2017-18 Vikram Reddy, 202, Lotus Serviced Apartments 15, Venkataraman Street, Thiyagaraya Nagar, Chennai 600 017. [PAN: AQZPV5520B] Vs. Income Tax Officer, Non Corporate Ward - 18(5), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Ms. T.V. Muthu Abirami, Advocate ŮȑथŎ की ओर से/Respondent by : Shri A. Sasikumar, CIT सुनवाई की तारीख/ Date of hearing : 19.03.2025 घोषणा की तारीख /Date of Pronouncement : 20.03.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER: Both the appeals filed by the assessee are directed against the order passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, both dated 29.11.2024 and pertains to assessment year 2017-18. The appeal in ITA No. 310/Chny/2024 deals with quantum addition and the appeal in ITA No. 311/Chny/2025 is filed against confirmation of penalty levied under section 270A of the Income Tax Act, 1961 [“Act” in short]. :-2-: ITA. Nos:310 & 311/Chny/2025 2. First, we shall take up the appeal filed against quantum addition in ITA No. 310/Chny/2025 for adjudication, wherein, the assessee challenged the exparte order passed by the ld. CIT(A) without condoning the delay in filing the appeal. 3. At the outset, we note that the assessee is an individual and no return of income filed. According to the Assessing Officer, the assessee is a salaried employee and made cash deposits prior to demonetization period as well as during demonetization period totaling to ₹.3,88,93,360/-. Despite various notices issued by the Assessing Officer under section 142(1) of the Act requiring the assessee to file the return of income as well as to explain the source for the cash deposits made, there was no response from the assessee to file the return of income or furnishing details for the cash deposit, but, however, simply informed the Assessing Officer that the assessee is out of India. Since the assessee did not explain the source for the cash deposits in various bank account, the entire cash deposits of ₹.3,88,93,360/- is brought to tax under section 69 of the Act vide his order under section 144 of the Act dated 29.11.2019. 4. The assessee carried the matter in appeal before the ld. CIT(A) with a delay of 660 days in filing the appeal. The assessee filed a condonation petition before the ld. CIT(A) explaining the reasons for the :-3-: ITA. Nos:310 & 311/Chny/2025 delay. However, by rejecting the condonation petition, the ld. CIT(A) dismissed the appeal. On being aggrieved, the assessee carried the matter in appeal before the Tribunal. 5. The ld. AR for the assessee submits that the assessee duly submitted petition for condonation of delay in filing the appeal before the ld. CIT(A). The ld. AR explained the reasons for the delay in filing the appeal before the ld. CIT(A) was covered by Covid-19 pandemic and the balance No. of 90 days was due to waiting for his employer’s instructions to handle the matter about cash deposits made to his bank account on behalf of the employer. The ld. AR prayed for condoning the delay and remits the matter to the file of the ld. CIT(A) to adjudicate the issue on merits. 6. The ld. DR fairly conceded that the filing of appeal during Covid-19 pandemic period has been dispensed with the limitation by the Hon’ble Supreme Court. 7. Heard both the parties and perused the material available on record. Against the assessment order under section 144 of the Act, the assessee preferred an appeal before the ld. CIT(A). The assessee has filed a petition for condonation of delay in filing the appeal before the ld. CIT(A), which is reflected at page 4 of the impugned order. Before us, the ld. AR explained the reasons for the delay in filing the appeal before the ld. CIT(A) was covered by Covid-19 pandemic and the balance No. of 90 days was due to :-4-: ITA. Nos:310 & 311/Chny/2025 waiting for his employer’s instructions to handle the matter about cash deposits made to his bank account on behalf of the employer. We note that in the impugned order, there was no mention of issuing any notice of hearing to the assessee by the ld. CIT(A) calling explanation from the assessee, but, however, simply rejected the condonation petition filed by the assessee and dismissed the appeal. Under the above facts and circumstances, in the interest of justice, we deem it proper to remit the matter to the file of the ld. CIT(A) with a direction to condone the delay and adjudicate the issue on merits in accordance with law by affording reasonable opportunity of being heard to the assessee. Thus, the grounds raised by the assessee are allowed. I.T.A. No. 311/Chny/2025 8. Against the quantum addition, the Assessing Officer issued notice under section 270A of the Act requiring the assessee to explain as to why penalty should not be levied under section 270A of the Act. Since there was no response from the assessee, the Assessing Officer levied penalty of ₹.1,50,22,560/- being 50% of the assessed income of the assessee. On appeal, the ld. CIT(A) dismissed the appeal filed by the assessee. 9. On being aggrieved, the assessee is in appeal before the Tribunal against levy of penalty under section 270A of the Act. Since the quantum addition made by the Assessing Officer under section 144 of the Act has :-5-: ITA. Nos:310 & 311/Chny/2025 not attained its finality as the Tribunal, herein above, remanded the matter to the file of the ld. CIT(A) to condone the delay in filing the appeal and adjudicate the issue on merits, the penalty levied under section 270A of the Act is liable to be quashed. However, since we have remitted the quantum addition to the file of the ld. CIT(A) for adjudication in accordance with law, the levy of penalty under section 270A is also remitted to the file of the ld. CIT(A) for fresh adjudication after deciding the quantum addition on merits. Thus, the grounds raised by the assessee are allowed for statistical purposes. 10. In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the court on 20th March, 2025 at Chennai. Sd/- Sd/- (जॉजŊ जॉजŊ क े.) (GEORGE GEORGE K) उपाȯƗ /VICE PRESIDENT (एस. आर.रघुनाथा) (S. R. RAGHUNATHA) लेखासद˟/ACCOUNTANT MEMBER चे᳖ई/Chennai, ᳰदनांक/Dated, the 20th March, 2025 Vm/- आदेशकीŮितिलिपअŤेिषत/Copy to: 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3.आयकर आयुƅ/CIT 4. िवभागीय Ůितिनिध/DR 5. गाडŊ फाईल/GF "