NADARAJAN KALYANI,CHENNAI vs. ITO, CIRCLE 1, NAMAKKAL, NAMAKKAL

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ITA 885/CHNY/2023Status: DisposedITAT Chennai17 October 2023AY 2016-175 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, while acknowledging the assessee's failure to comply, decided to grant one last opportunity to substantiate the case before the Assessing Officer to meet the ends of natural justice.

What were the facts?

The assessee's case was selected for limited scrutiny due to high cash on hand. Despite multiple notices from the Assessing Officer and CIT(A), the assessee failed to furnish any details or explanations.

What were the issues?

Whether the addition of unexplained cash in hand was justified given the assessee's non-compliance, and whether a further opportunity should be granted.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 144,Section 69A

AI-generated summary — verify with the full judgment below

Before: Shri V. Durga Rao & Shri Manjunatha, G.

Hearing: 17.10.2023Pronounced: 17.10.2023

अपीलीय अिधकरण, ’ए’ "ायपीठ, चे"ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI "ी वी दुगा" राव "ाियक सद" एवं "ी जी. मंजुनाथा, लेखा सद" के सम" Before Shri V. Durga Rao, Judicial Member & Shri Manjunatha, G., Accountant Member आयकर अपील सं./ Year: 2016-17 Mrs. Nadarajan Kalyani, Vs. The Income Tax Officer, 47-A, S.N.D. Road, Ward 1(6), Tamil Nadu 637 211. Chennai. [PAN: ANZPK3272G] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant by : Shri T.S. Lakshmi Venkataraman, FCA ""थ" की ओर से/Respondent by : Shri AR V Sreenivasan, Addl. CIT सुनवाई की तारीख/ Date of hearing : 17.10.2023 घोषणा की तारीख /Date of Pronouncement : 17.10.2023 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, dated 20.06.2023 relevant to the assessment year 2016-17. 2. Brief facts of the case are that the case of the assessee was selected for Limited Scrutiny for the assessment year 2016-17 through CASS for the following reason:

High cash on hand shown in balance sheet as compared to preceding year and return of income filed after 07.11.2016: whether cash in hand shown in return of income is correct.

Notice under section 143(2) of the Income Tax Act, 1961 [“Act” in short] was issued and duly served on the assessee and asked to submit details and mode of payment, bank statement, details of sundry credits along with confirmation, cash book and ledger account. However, the assessee failed to furnish any of the details as called for. Various notices issued under section 142(1) of the Act for furnishing the details, but, the assessee did not comply with any of the notices issued by the Assessing Officer. Finally, the Assessing Officer communicated draft assessment order dated 04.12.2018 to the assessee to file the reply on or before 07.12.2018. However, there was no response from the assessee. In the absence of any reply and supporting details despite ample opportunities were afforded, the Assessing Officer proceeded to complete best judgement assessment under section 144 of the Act dated 10.12.2018 by treating the cash in hand to the tune of ₹.22,48,834/- as shown by the assessee as unexplained money under section 69A of the Act and added back to the returned income of the assessee.

3.

The assessee carried the matter in appeal before the ld. CIT(A). Despite ample opportunities by way of hearing notices issued, the assessee has not complied to furnish any submissions/evidences. Accordingly, the ld. CIT(A) confirmed the addition made by the Assessing Officer.

4.

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that since the assessee was prevented by reasonable cause, he was unable to furnish any details before the authorities below and prayed that one more opportunity may be afforded to substantiate his case.

5.

On the other hand, the ld. DR strongly supported the orders of authorities below.

6.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Despite various notices issued by the Assessing Officer, the assessee has neither put his appearance nor furnished any details with supporting evidence in response to the notices issued under sections 143(3)/142(1) and also to the draft assessment order dated 04.12.2018. The ld. CIT(A) has also afforded ample opportunities by issuing various hearing notices, but the 4 assessee has not complied with by furnishing any explanation in support of evidences. Thus, the appeal filed by the assessee is liable to be dismissed. However, in order to meet the ends of natural justice, we are of the considered opinion that the assessee shall be afforded one more opportunity of being heard to substantiate its case before the Assessing Officer. Accordingly, we set aside the appellate order and remit the matter back to the file of the Assessing Officer to afford one more opportunity of being heard to the assessee to substantiate his case with suitable explanation and evidences and thereafter decide the issue in accordance with law subject to the condition that the assessee should pay ₹.2,000/- to the State Legal Aid Authority, Hon’ble Madras High Court and produce necessary proof of payment of cost before the Assessing Officer.

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