SHRI MALAIYALATHAN AYYANARAPPAN,PONDICHERRY vs. ITO WARD-1, PONDICHERRY
What did the Tribunal hold?
The Tribunal held that the issue needs to be re-examined by the AO to provide the assessee with an opportunity to explain the source of the time deposit, particularly in light of the claim that it originated from agricultural income or an agricultural loan.
What were the facts?
The assessee, an agriculturist, did not file a return for AY 2011-12. The AO reopened the assessment under Section 147 due to a Rs. 10 lakh time deposit in a bank account. The assessee failed to appear before the AO or the CIT(A) to explain the source of funds.
What were the issues?
Whether the addition made by the AO on account of unexplained time deposit is sustainable without providing the assessee an opportunity to explain the source of funds, especially when the source is claimed to be agricultural income.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ / ‘SMC’ BENCH: CHENNAI
Before: SHRI MANJUNATHA.G, HON’BLE
आदेश / O R D E R PER MANJUNATHA.G, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre (NFAC), Delhi, dated 21.03.2023, and pertains to assessment year 2011-12.
The brief facts of the case as stated by the assessee are that he is an agriculturist whose source of income is from agricultural activities. The assessee has not filed his return of income for AY 2011-12. The assessment has been re-opened u/s.147 of the Income Tax Act, 1961 (in short “the Act"), for the reasons recorded, as per which, income chargeable to tax had been escaped assessment on account of time deposit into bank account for ITA No.624/Chny/2023 :: 2 ::
an amount of Rs.10 lakhs. Accordingly, notice u/s.148 of the Act, dated 27.03.2018 was served on the assessee. The assessee neither filed return of income nor appeared before the AO and filed any details to explain source for time deposit. Therefore, the AO passed ex parte assessment order u/s.144 r.w.s.147 of the Act on 27.11.2018 and made addition of Rs.10 lakhs towards time deposit into bank for not explaining source for said deposit. The assessee carried the matter in appeal before the First Appellate Authority, but neither appeared nor filed any details, which is evident from Para No.5 of the order of the Ld.CIT(A), where the First Appellate Authority had given ‘seven’ dates of hearing, but no compliance from the assessee. Therefore, the Ld.CIT(A) dismissed the appeal filed by the assessee and sustained addition made towards time deposits.
Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before me.
None appeared for the assessee. I have heard the Ld.DR and perused the materials available on record. I find that the AO has made additions towards time deposit when the assessee could not appear and explain source for said deposit. Although, the assessee has filed appeal before the First Appellate Authority, but could not appear and file any details. From the above, it is very clear that the assessee is not serious in pursuing his appeal with honesty. However, the claim of the assessee before us is that he is an agriculturist and the only source for income is from agricultural activities and source for time deposit with bank is also from agricultural
ITA No.624/Chny/2023 :: 3 :: activities. The assessee also claims to have taken a sum of Rs.34.80 lakhs agricultural loan from Axis Bank. If the claim of the assessee is correct, then, there cannot be any taxable income, because agricultural income is not taxable. But, fact needs to be verified. The assessee neither appeared before the AO nor filed any details before the First Appellate Authority.
Therefore, we are of the considered view that the issue needs to go back to the file of the AO to give one more opportunity of hearing to the assessee, and thus, we set aside the order of the Ld.CIT(A) and restore the issue back to the file of the AO with a direction to re-consider the issue in light of claim of the assessee towards source for time deposit with bank is out of agricultural income earned for relevant assessment years. Needless to say, the assessee shall ensure to submit necessary details without seeking any adjournment.
In the result, appeal filed by the assessee is allowed for statistical purposes.
More judgments on Section 147
- ACIT Central Bilaspur, Bilaspur vs Arun Kumar Agrawal, SaktiITSSA 26/RPR/2025[2018-19]Status: Disposed21 Oct 2026AY 2018-19
- Vinod Agrawal, Kawardha vs Assisstant Commissioner of Income Tax…ITA 666/RPR/2026[2019-20]Status: Heard21 Oct 2026AY 2019-20
- Sar Business Tradelink Private Limited… vs Income Tax Officer, Ward - 1(2), RaipurITA 599/RPR/2026[2014-15]Status: Heard21 Oct 2026AY 2014-15
- Tarunaben Maganlal Bhut, Navagam vs ITO Ward 2(2)(1), RajkotITA 673/RJT/2026[2024-25]Status: Disposed21 Oct 2026AY 2024-25
- Neo Incorporation, Rajkot vs DCIT Circle- 1(2), RajkotITA 471/RJT/2026[2012-2013]Status: Disposed21 Oct 2026AY 2012-2013
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