SUDHAKAR VENKAT PRASADH,SALEM vs. THE INCOME TAX OFFICER, WARD - 1(1), SALEM

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ITA 2343/CHNY/2026Status: DisposedITAT Chennai08 September 2026AY 2017-185 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal. It further held that the issue of cash deposits, which was initially treated as unexplained by the AO and sustained by the CIT(A), should also be remitted back to the AO for fresh consideration.

What were the facts?

The assessee, an individual, did not file a return of income. The Assessing Officer (AO) reopened the assessment and made additions for unexplained cash deposits and estimated business income. The Commissioner of Income Tax (Appeals) partly allowed the appeal, setting aside the addition related to estimated business income and remanding it to the AO for de novo consideration.

What were the issues?

Whether the addition for unexplained cash deposits should be remitted back to the AO for fresh consideration, and whether the delay in filing the appeal should be condoned.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 144,Section 69A,Section 250,Section 270A,Section 271AAC(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: MS. PADMAVATHY.S & SHRI MANU KUMAR GIRI

For Respondent: Ms. P.Sunanda, Sr. DR

आदेश / O R D E R

PER PADMAVATHY.S, A.M:

This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 14.05.2025 for Assessment Year (AY) 2017-18.

2.

The assessee is an individual and did not file the return of income for the year under consideration. The A.O received information that the assessee

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has made cash deposit of Rs.17,45,000/- in the bank account during the year under consideration. Since the assessee did not file the return of income, the A.O reopened the assessment by issue of notice u/s. 148 of the Act. The A.O made an addition towards cash deposit treating the same as unexplained. The AO also consider the other credits in the bank account and estimated income at 8% to make an addition as the business income of the assessee to the tune of Rs.5,79,761/-. Aggrieved, the assessee filed further appeal before the CIT(A). The CIT(A) partly allowed the appeal for statistical purpose by holding as under: “Decision: I have carefully considered the submission made by the appellant as above, the facts of the case as well as gone through the observation and findings of the AO 's assessment order. It is observed from the assessment order that the appellant, despite getting opportunity to substantiate the source of cash deposit to bank during demonetization, miserably failed to substantiate the said source with supporting documents before the AO though the appellant claimed to have inadequate opportunity of hearing. It is observed from the assessment order that the AO, on account of non filing of return and non submission of supporting documents by 1) N.Sudhakar (HUF) 2) N.Sudhakar (HUF) marriage gift 3)Shri N.Sudhakar 4) Grand Mother C.Gomati 5) Sister S. Gaythri vide para 4.1 to 4.6 of Rs. 17,47,850/- was unable to verify the creditworthiness of the said persons& and genuineness of transaction and accordingly drawn inference of source of cash deposit being unexplained Therefore I find merit in the findings of the AO in as much as it is treated as source being unexplained and found the additions made are in accordance with the law. Accordingly the relating grounds are dismissed.

Regarding the other ground relating to estimated addition of Rs. 5,79,761/-i.e 8% of turnover of Rs. 72,47,018/- and the cash withdrawal of Rs. 3,58,000/-from HDFC Bank and the other amount for which source remaining unverifiable, it is observed that the AO has made the addition merely for non satisfactory compliance on the part of the appellant without bringing any cogent material in support of these additions. In view of above considering the entire conspectus of the case, in the given facts and circumstances of the case and also looking to the fact that no speaking order bringing cogent material on record , is passed by the Assessing Officer in relation to the above said additions in this case and in view of new amendment (provision) inserted by the Finance (No. 2) Act ,

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2024 with effect from 01-10-2024 ,I , therefore , Set aside the order of the Assessing Officer(AO) passed u/s 147 r.w.s 144 of the Act vide dated 28- 10-2019on the above mentioned limited issues and remand 1:he case to the AO with the direction that the AO will frame the assessment after considering the issues denovo and after verification of all the evidences before him/her and after allowing the appellant a reasonable opportunity in proper address to explain his case . Thus this grounds taken in appeal by the appellant is treated as allowed for statistical purpose.”.

The assessee is in appeal before the Tribunal against the order of the CIT(A).

3.

There is a delay of 265 days in filing the appeal before the Tribunal and the assessee filed an affidavit/petition where it is stated that: “5. I state that, when the order of CIT(A) dated 14.05.2025 was received by me, it was mentioned that the order of assessment had been set aside. Based on the wording of the said order, both me and my chartered accountant were under bona fide belief that the entire assessment order had been set aside and remanded back to the AO for fresh adjudication. Due to the aforesaid bona fide misunderstanding, no appeal was filed against the order of CIT(A) within the prescribed time limit. 6. I state that, the penalty proceedings u/ss.270A & 271AAC(1) of the Act were reinstated upon issuance of notices dated 08.12.2025. Upon receipt of these notices, I consulted by auditor, who upon detailed scrutiny of CIT(A)'s order dated 14.05.2025, advised that the addition u/s.69A of the Act had been sustained and that an appeal ought to be filed before this Hon'ble Tribunal. 7. I state that, the penalty proceedings u/ss. 270A & 271AAC(1) of the Act were completed vide orders dated 26.12.2025 and on my instructions, appeal against the said penalty orders were duly filed on 08.01.2026. However, the appeal against the order of CIT(A) dated 14.05.2025 was not filed even then, as I was planning for a further consultation. 8. I state and submit that, during the relevant period, I was suffering from severe low back ache which significantly affected my day-to-day activities. On medical advice, I was under rest for a period of 3 months. Due to my medical condition and stringency on my employment related works consequent to my medical condition, I was unable to attend my financial affairs promptly. 9. I state that, it was only upon receiving communication regarding the appeals filed against the penalty orders, my auditor once again urged me

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to file an appeal against the CIT(A) order dated 14.04.2025. However, due to my continued medical condition and work constraints, I could not immediately give my consent. In the end of March, 2026, during the course of my year-end personal financial discussion with my auditor, I was reminded of the appeal which is to be filed. Therefore, upon his advice, I was referred to the present counsel Mr. G. Baskar, who promptly prepared the appeal papers. It then took some additional time for signing the appeal papers and sending to my counsel. 10. I further submit that, the delay in filing the present appeal is neither wilful nor wanton, but due to circumstances mentioned above. I would be put to irreparable loss and hardship if the delay is not condoned. On the other hand, no prejudice will be caused herein by condoning the delay and thus, the balance of convenience thus lies in my favour.”

4.

Having heard both the parties and perused the material on record, we are of the view that there is a reasonable and sufficient cause for the delay in filing the appeal before the Tribunal. Therefore following the Hon’ble Supreme Court decision in the case of Collector, Land Acquisition Vs. MST.Katiji & Ors., (167 ITR 471) (SC), we condone the delay in filing the appeal and admit the appeal for adjudication.

5.

We have heard the parties and perused the material available on record. The Ld. Authorized Representative (AR) of the assessee submitted that the directions of the CIT(A) while setting aside the appeal back to the AO is not clear as to whether all the issues contended before him are sent back or only the issue pertaining to addition made towards business income is sent back. The Ld. AR drew our attention to the finding of the CIT(A) to submit that the CIT(A) has remitted for denovo consideration and that the A.O in the set aside proceedings is calling for details with regard to both the issues. Accordingly, the Ld. AR prayed the issue of addition made towards unexplained money can also be set aside to the A.O. Considering the above observations of the CIT(A) and the submissions of the Ld. AR, we are

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inclined to give one more opportunity to the assessee to contend the issue of cash deposits before the A.O. Accordingly, we remit the issue back to the A.O for consideration afresh by calling for necessary details as may be required to decide the issue in accordance with law. The assessee is directed to furnish the details as may be called for and cooperate with the proceedings. It is ordered accordingly.

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced on 08th day of September, 2026 at Chennai.

Sd/- Sd/- (मनु कुमार िग!र) (पदमावती यस) (Manu Kumar Giri) (Padmavathy.S) �या�यक सद�य / Judicial Member लेखा सद�य /Accountant Member चे�नई/Chennai, �दनांक/Dated: 08th September, 2026. EDN, Sr. P.S Digitally signed by EJTADA DURGA EJTADA DURGA NARESH आदेश क� ��त�ल�प अ�े�षत/Copy to: NARESH Date: 2026.09.15 1. अपीलाथ�/Appellant 12:02:44 +05'30' 2. ��थ�/Respondent 3. आयकर आयु!/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF

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