NATESAN KANNAMMAL,PUDUCHERRY vs. INCOME TAX OFFICER, WARD 3, PUDUCHERRY, PUDUCHERRY

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ITA 2375/CHNY/2026Status: DisposedITAT Chennai08 September 2026AY 2022-234 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the additional evidence submitted before the CIT(A) needed to be examined. In the interest of natural justice, the appeal was remitted back to the CIT(A) to admit the additional evidence and examine it on merits.

What were the facts?

The assessee claimed unsecured loans as the source for property purchase. The Assessing Officer (AO) added a significant portion of these loans to the total income due to insufficient explanation. The Commissioner (Appeals) upheld the addition, refusing to admit additional evidence.

What were the issues?

Whether the CIT(A) was justified in not admitting additional evidence, and whether the addition made by the AO under Section 68 was sustainable without examining the full evidence.

Which sections of the Income-tax Act were involved?

Section 68

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. Nayani Swapna, CIT

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 25.03.2026 for Assessment Year (AY) 2022-23.

2.

The assessee is an individual and filed the return of income for AY 2022-23 on 31.11.2022 declaring total income of Rs.1,06,91,190 /-. The case

ITA No.2375/Chny/2026 Natesan Kannammal :- 2 -:

was selected for scrutiny, and the statutory notices were duly served on the assessee. The A.O called on the assessee to furnish details pertaining to the cash deposits in the bank account and the details towards purchase of property. The assessee submitted that the source for purchase of property is unsecured loans obtained from various parties. The A.O called on the assessee to furnish various details pertaining to the unsecured loans borrowed to prove the identity, creditworthiness and genuineness of the parties. The assessee in response filed partial details before the A.O. After considering the details submitted, the A.O added the unsecured loans to the tune of Rs. 5,08,58,000/- as addition u/s. 68 of the Act for the reason that the assessee failed to submit satisfactory explanation and has not discharge the onus. Aggrieved, the assessee filed further appeal before the CIT(A). Before the CIT(A), the assessee furnished further evidence under Rule 46A of the Income Tax Rules. The CIT(A) did not admit the additional evidence stating that the assessee failed to prove that he was prevented by sufficient cause from producing the evidence before the A.O. Accordingly, the CIT(A) considered the issues based on the material already available on record and gave marginal relief to the assessee. The assessee is in appeal before the Tribunal against the order of the CIT(A).

3.

The Ld. Authorized Representative (AR) of the assessee submitted that the lower authorities while making the addition has considered the opening balance also and that the addition u/s. 68 of the Act could be made only towards the credits during the year under consideration. The Ld. AR further submitted that in the additional evidence before the CIT(A) the assessee has furnished all the relevant details including confirmations, bank statements, income tax returns of the parties etc. to prove the identity, creditworthiness

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and the genuineness of the borrowings. The Ld. AR also submitted that the assessee during the assessment proceedings was getting the details from the loan creditors and whatever could be produced before the A.O were already submitted. The Ld. AR argued that the reason for not submitting all the details before the AO was not deliberate and therefore, the CIT(A) is not correct in not admitting additional evidence before him. The Ld. AR also drew our attention to the various details submitted before the A.O and the CIT(A).

4.

The Ld. Departmental Representative (DR), on the other hand, vehemently argued that the assessee was given sufficient opportunities to produce all the relevant details by the A.O which he prayed to do so. Accordingly, the Ld. DR supported the order of the CIT(A) stating that the assessee could not substantiate the reasonable cause for not submitting the details before the A.O.

5.

We have heard the parties and perused the material available on record. The assessee before the AO submitted that the source for purchase of property is the borrowings from 16 parties. The assessee before the A.O submitted partial details to prove the genuineness of the borrowings. It is further noticed that the assessee before the CIT(A) had submitted an application for additional evidence under Rule 46A containing the confirmations, bank statements and ITRs for all the parties except two parties. We also notice that the CIT(A) has rejected the application and has proceeded to confirm the additions made by the A.O stating that sufficient cause for not admission of the evidence was not properly established. The Ld. AR before us submitted that the assessee is an individual not having proper knowledge of income tax proceeding and is completely dependent on the tax consultant. The Ld. AR further submitted that the assessee was collating the details as much as

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possible during assessment proceedings and was submitting the details whatever was available at that point of time. The Ld. AR also submitted that the assessee needed some more time for producing all the details but the assessment was completed without giving that opportunity to the assessee. We notice that the assessee before the CIT(A) has produced some more documents such as confirmations and ITRs pertaining to the loan parties to substantiate the genuineness of the loans which in our views needs to be examined. Therefore, in the interests of natural justice and fair play, we remit the appeal back to the CIT(A) with a direction to admit the additional evidence and examine the same on merits in accordance with law. Needless to say that the assessee be given a reasonable opportunity of being heard. 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 11:58:45 +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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