VSG MOTORS,CHENNAI V. ACIT, CIRCLE-1, TIRUPPUR

ITA 3220/CHNY/2024

AI Insights

The case involves VSG Motors, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The original assessment by the Assistant Commissioner of Income Tax for the assessment year 2017-18 under section 144 of the Income Tax Act, 1961, was based on large cash deposits during demonetization, amounting to Rs.1,25,25,900. The assessee's failure to respond to multiple notices led to the addition of this amount under section 69A read with section 115BBE of the Act. Both the Assessing Officer and the CIT(A) upheld this addition due to non-response from the assessee. The Tribunal, while acknowledging the assessee's lack of response, decided to set aside the order and remand the case for a fresh assessment, citing the need to uphold natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472397 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASWATHY
• Assessee Lawyers: BADRINARAYANAN
• Keywords: Set aside; Principle of natural justice
• Section: 142(1); 143(2); 69A

Judgement Text

" आयकर अपीलीय अिधकरण ‘सी’ Ɋायपीठ चेɄई मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI माननीय ŵी मनोज क ुमार अŤवाल ,लेखा सद˟ एवं माननीय ŵी मनु क ुमार िगįर, Ɋाियक सद˟ क े समƗ। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER AND HON’BLE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER आयकरअपील सं./ ITA No.3220/Chny/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-2018) VSG Motors, 1L, Gandhi Road, Annuppurapalayam, Pudur, Anupparapalayampudur, Tiruppur, Anuppapalayam S.O. 641652. [PAN: AAJFV 8353N] Vs. The Assistant Commissioner of Income Tax, Circle 1, Tirupur. (अपीलाथȸ/Appellant) (Ĥ×यथȸ/Respondent) अपीलाथȸ कȧ ओर से/ Appellant by : Shri Badrinarayanan, Advocate Ĥ×यथȸ कȧ ओर से /Respondent by : Ms. Aswathy, JCIT. सुनवाई कȧ तारȣख/Date of Hearing : 24.02.2025 घोषणा कȧ तारȣख /Date of Pronouncement : 24.02.2025 आदेश / O R D E R PER MANU KUMAR GIRI (Judicial Member) This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in order No.ITBA/NFAC/S/250/2024-25/1064223620 (1) dated 19.04.2024. The assessment was framed by the Assistant Commissioner of Income Tax, Circle 1, Tirupur for the assessment year 2017-18 u/s.144 of the Income Tax Act, 1961 (hereinafter the ‘Act’), vide order dated 23.12.2019. 2 ITA No. 3220/Chny/2024 2. Brief facts of the case are that the assessee firm furnished its return of income on 06.12.2017 for the AY. 2017-18 declaring total income of Rs.25,32,710/-. The case was selected for scrutiny through CASS for the reason, \"Large value cash deposit during demonetization\". The ld. AO found that assessee had deposited in demonetization cash of Rs.1,25,25,900/-. Notice u/s. 143(2) of the Act dated 22.09.2018 was issued and served to the appellant on 26.09.2018. Further, Notice u/s 142(1) of the Act dated 21.11.2019, was issued and served to the assessee. Since, the appellant had not filed any requisite response, in the interest of justice, the ld. AO issued a final show cause notice and served on 07.12.2019. The appellant had not filed any response to the show cause notice dated 07.12.2019 also. Hence, the ld. AO made an addition of Rs.1,25,25,000/- under section 69A r.w.s.115BBE of the Act. Aggrieved, assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) issued eight notice to the assessee, since there was no response from assessee, the ld. CIT(A) confirmed the action of the Assessing Officer. Aggrieved, assessee preferred an appeal before the Tribunal. 3. Before us, the ld. Authorized Representative submitted that that the AO has not given sufficient time to file evidence and documents to substantiate its explanation and requested to send the appeal back to the file of the Assessing Officer for fresh adjudication. On the other hand, the ld. Departmental Representative argued that the assessee were given opportunities to substantiate its case before the ld. AO as well as the ld. CIT(A). however, 3 ITA No. 3220/Chny/2024 assessee has not utilized the opportunity and hence he prayed that no lenient view is to be taken in this case and prayed for dismissal of appeal. 4. Though we concur with the submissions of Ld. Sr. DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. We also find that assessee has not represented before the ld. AO despite notices. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. AO for denovo assessment after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence, confirmations and documents, if any, forthwith without any fail, failing which Ld. AO shall be at liberty to proceed with the assessment proceedings on merits as per law. 5. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 24th day of February, 2025 Sd/- Sd/- (मनोज क ुमार अŤवाल) (मनु क ुमार िगįर) (MANOJ KUMAR AGGARWAL) लेखा सद˟ / ACCOUNTANT MEMBER (MANU KUMAR GIRI) Ɋाियक सद˟ / JUDICIAL MEMBER चेɄई Chennai: िदनांक Dated : 24-02-2025 KV आदेश कȧ ĤǓतͧलͪप अĒेͪषत /Copy to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Coimbatore 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF "