TAMRAPARANI ENTERPRISES AND REALTY PRIVATE LIMITED,CHENNAI vs. ITO CORP WARD 3(1), CHENNAI

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ITA 649/CHNY/2026Status: HeardITAT Chennai11 September 2026AY 2018-198 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, while deprecating the assessee's non-compliance, decided to grant one more opportunity in the interest of justice and fair play. This opportunity is conditional upon the assessee paying a cost of Rs. 1,00,000/- for each assessment year.

What were the facts?

The assessee failed to file income tax returns and respond to notices regarding cash deposits. The Assessing Officer (AO) made additions treating cash deposits as unexplained money. The Commissioner of Income Tax (Appeals) confirmed additions for some years but partly allowed for another.

What were the issues?

Whether the assessee should be granted another opportunity to present its case before the appellate authority, despite previous non-compliance, and the validity of penalty orders.

Which sections of the Income-tax Act were involved?

Section 69A,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA

Hearing: 09.09.2026Pronounced: 11.09.2026

आदेश/ O R D E R PER BENCH: These appeals filed by the assessee are directed against the orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, all dated 31.12.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Years are 2017-18, 2018-19 & 2019-20. The Revenue has also filed an appeal against the order of the CIT(A)-NFAC for the assessment year 2019-20.

2.

The assessee has filed these appeals against the First Appellate Authority (FAA) orders in respect of quantum addition and penalty orders. First, let us deal with appellate orders in respect of quantum additions in ITA No.647, 649 & 651/CHNY/2026 for assessment years 2017-18 to 2019-20.

3.

Brief facts of the case are as follows: The assessee did not file its returns of income for the assessment years 2017-18 to 2019-20.

- 3 - ITA Nos.647 to 652/CHNY/2026 ITA No.1356/CHNY/2026 Tamraparani Enterprises and Realty Pvt Ltd. The assessments were subsequently reopened on the basis of information received by the Department indicating that the assessee had made cash deposits in its bank account during the relevant assessment years. Since the assessee failed to respond to the notices issued in the course of the reassessment proceedings, the AO proceeded ex-parte and completed the assessments by making additions u/s.69A of the Act in respect of the cash deposits, treating the same as unexplained money. For the assessment year 2019- 20, sales reported under GSTR-3B of Rs.3,18,72,836/- was added to total income apart from cash deposits made.

4.

Aggrieved by the orders of the AO, the assessee preferred appeals before the First Appellate Authority (FAA), with a delay in filing the same. The FAA, however, condoned the delay. Since the assessee failed to substantiate its claim, the FAA dismissed the appeals for the assessment years 2017-18 and 2018-19 by confirming the additions made by the AO towards cash deposits as unexplained money u/s.69A of the Act. For the assessment year 2019-20, the FAA partly allowed the appeal. The FAA deleted the additions of sales reported in GSTR-3B.

- 4 - ITA Nos.647 to 652/CHNY/2026 ITA No.1356/CHNY/2026 Tamraparani Enterprises and Realty Pvt Ltd. 5. Aggrieved, the assessee has filed the present appeals before the Tribunal. Before us, the Ld.AR submitted that the assessee is an uneducated person engaged in the business of mining and quarrying and that the cash deposits in the bank account pertain to the business carried on by him. It was submitted that, being not conversant with the income-tax proceedings, the assessee had entrusted the matter to an Income-tax Practitioner, who, however, did not actively participate in the appellate proceedings. In the above circumstances, the Ld.AR pleaded that, in the interest of justice and fair play, one more opportunity may be granted to the assessee to appear before the FAA and place on record the necessary submissions and supporting evidences to substantiate the claim regarding the cash deposits.

6.

The Ld.DR submitted that adequate opportunities were provided from the offices of the FAA & AO and there is no violation of principles of natural justice. Therefore, it was submitted that the appeals of the assessee may be dismissed.

7.

We have heard the rival submissions and perused the material on record. We find that the assessment proceedings before the AO are best judgment assessments. The assessee had neither filed the

- 5 - ITA Nos.647 to 652/CHNY/2026 ITA No.1356/CHNY/2026 Tamraparani Enterprises and Realty Pvt Ltd. return of income nor appeared before the AO nor furnished any explanation or supporting documents in respect of the cash deposits in the bank account. Before the FAA, the assessee emphasized on the condonation of delay in filing the appeals, but did not file any documentary evidence to substantiate its claim that the cash deposits represented the business receipts from mining and quarrying activity. Thus, the assessee has admittedly not availed the opportunities afforded by the lower authorities. We strongly deprecate the nonchalant attitude of the assessee in not responding to the statutory notices issued by the FAA & AO. However, considering the submissions of the Ld.AR that the assessee is an uneducated person and was not conversant with the income-tax proceedings and that the matter had been entrusted to an Income- tax Practitioner, who did not effectively represent the assessee, we are of the considered view that, in the interest of justice and fair play, one more opportunity may be afforded to the assessee. At the same time, having regard to the repeated non-compliance on the part of the assessee, we deem it appropriate to grant such opportunity subject to payment of a cost of Rs.1,00,000/- (Rupees One Lakh only) for each assessment year to the Tamil Nadu State Legal Services Authority at the Hon’ble High Court of Madras. Accordingly, a total amount of Rs.3,00,000/- (Rupees Three

- 6 - ITA Nos.647 to 652/CHNY/2026 ITA No.1356/CHNY/2026 Tamraparani Enterprises and Realty Pvt Ltd. Lakhs only) shall be paid by the assessee within one month from the date of receipt of this order. The assessee shall produce the receipt evidencing such payment before the FAA.

8.

Subject to the above condition, the matters are remitted to the files of the FAA for fresh adjudication in accordance with law. The FAA shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to co-operate with the Revenue and furnish all requisite explanations and documentary evidence in support of its claim and shall not seek unnecessary adjournment. The FAA shall consider the documentary evidence furnished by the assessee and obtain a remand report from the AO thereon. The assessee shall thereafter be afforded reasonable opportunity to file its rejoinder, if any, to the remand report. The FAA shall consider the documentary evidence furnished by the assessee, the remand report of the AO and the rejoinder, if any, filed by the assessee, and thereafter take an appropriate decision in accordance with law. It is ordered accordingly.

ITA Nos.648, 650 & 652/CHNY/2026 9. The assessee has filed these appeals against the appellate orders confirming the penalty levied by the AO u/s.271AAC(1) of

- 7 - ITA Nos.647 to 652/CHNY/2026 ITA No.1356/CHNY/2026 Tamraparani Enterprises and Realty Pvt Ltd. the Act. Since, we have already set aside the quantum appeals in ITA Nos.647, 649 & 651/CHNY/2026 to the files of the FAA for fresh adjudication, we deem it appropriate to set aside the penalty orders also to the files of the FAA to decide along with the quantum appeal afresh. It is ordered accordingly.

Revenue’s Appeal in ITA No.1356/CHNY/2026, AY 2019-20 10. The appeal filed by the Revenue is delayed by 9 days. The AO has filed an affidavit stating therein the reasons for belated filing of the appeal. On perusal of the reasons stated in the condonation petition, we are of the view that there is sufficient cause for late filing of the appeal and no latches can be attributed to the Department. Hence, we condone the delay in filing the appeal and proceed to dispose off the appeal on merits.

11.

The Revenue has filed the present appeal against the order of the FAA partly allowing the addition made by the AO by accepting the sales disclosed in the GST returns. Since, in the assessee’s appeal in ITA No.652/CHNY/2026, we have remitted the matter to the file of the FAA, we deem it appropriate to restore the present appeal also to the file of the FAA for being considered along with the assessee’s appeal. Needless to say, the FAA shall consider the

- 8 - ITA Nos.647 to 652/CHNY/2026 ITA No.1356/CHNY/2026 Tamraparani Enterprises and Realty Pvt Ltd. issues involved in both the appeals together and pass appropriate orders in accordance with law after affording reasonable opportunity of hearing to the assessee as well as the Revenue. It is ordered accordingly.

12.

In the result, the appeals filed by the assessee and Revenue are allowed for statistical purposes.

Order pronounced in the open court on 11th September,2026 at Chennai.

Sd/- Sd/- (एस.आर. रघुनाथा) (जॉज� जॉज� के) (S.R. RAGHUNATHA) (GEORGE GEORGE K) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 11th September, 2026 RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. िनधा�रती /Assessee 2. राज� /Revenue 3. आयकर आयु�त /CIT, Chennai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order REKHA Digitally signed by REKHA SENTHIL RAJ SENTHIL Date: 2026.09.11 RAJ 17:50:10 +05'30'

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