DR. RAHMAN FOUNDATION,CUDDALORE vs. ITO (E), WARD-2, CHENNAI

आयकरअपील�यअ�धकरण ’बी’ �यायपीठ,चे�नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI �ी इंतूरी रामा राव लेखासद� एवं �ी मनु कुमार िग�र, �ाियक सद� BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI MANU KUMAR GIRI, JUDICIAL MEMBER

आयकर अपील सं./ITA No. 3530/Chny/2026 �नधा�रण वष�/Assessment Year: 2018-19 Dr. Rahman Foundation, v. The ITO (Exemptions) 10 Gummath Palli Street, Porto Ward-2, Chennai Novo, Cuddalore, Tamil Nadu-608502 [PAN:AAATD 6046 R] (Appellant) (Respondent)

अपीलाथ� क� ओर से/ Appellant by : Mr. S. Girish Kumar, Adv. !यथ� क� ओर से /Respondent by : Mr. Banoth Akhil Ram Naik, JCIT सुनवाई क� तार�ख/Date of Hearing : 18.08.2026 घोषणा क� तार�ख /Date of : 08.09.2026 Pronouncement आदेश / O R D E R PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "the Ld. CIT(A)"], dated 16.12.2025, confirming the assessment order passed u/s. 147 r.w.s 144 of the Income Tax Act, 1961 ("the Act"), for the Assessment Year ("AY") 2018-19.

ITA No. 3530/Chny/2026 (AY 2018-19) Dr. Rahman Foundation Vs ITO (E) Ward-2 :: 2 :: 2. In the instant appeals, the registry has noted the delay of 114 days in filing the captioned appeal. We have gone through the condonation petition along with affidavit filed, we find that the reasons given by the assessee are sufficient cause for delay in filing the captioned appeal. Hence, we condone the delay and admit the appeal for adjudication. 3. Brief facts of the case are that the assessee received an ex- parte reassessment order dated 22.02.2023 passed u/s. 147 read with sections 144 and 144B of the Income-tax Act, 1961 (“the Act”) by the Assessment Unit (“AU”) vide DIN & Order No. ITBA /AST/S/147/2022-23/1049990248(1), whereby the total taxable income of the assessee was determined at Rs.1,16,64,661/-. 4. The reassessment proceedings were initiated on the basis of information flagged by the Risk Management Strategy formulated by the CBDT regarding the time deposits made by the assessee and the interest earned on securities. The AU passed an order u/s. 148A of the Act on 26.03.2022 and issued notice u/s. 148 of the Act on 29.03.2022. During the reassessment proceedings, notices u/s. 142(1) of the Act were issued calling for details regarding the nature and source of the time deposits and an explanation regarding the interest earned on securities. The AU proposed to treat a sum of Rs.1,15,00,000/- representing renewed time deposits as unexplained money u/s. 69A of the Act and consequently proposed to tax the same at the enhanced rate prescribed u/s. 115BBE of the Act. The AU further proposed to assess Rs.1,64,661/- being interest earned on securities under the head “Income from Other Sources”. Show-cause notices were issued by the AU on 27.12.2022 and 24.01.2023 proposing to complete the reassessment proceedings ex

ITA No. 3530/Chny/2026 (AY 2018-19) Dr. Rahman Foundation Vs ITO (E) Ward-2 :: 3 :: parte and making the aforesaid additions. In the absence of a reply from the assessee, the AU proceeded to complete the reassessment ex parte vide order dated 22.02.2023, determining the total taxable income at Rs.1,16,64,661/-. 5. Aggrieved by the reassessment order, the assessee preferred an appeal before the learned CIT(A). However, the learned CIT(A), observing that several effective opportunities of hearing had been provided to the assessee but the assessee had failed to participate in the appellate proceedings and remained non-compliant, dismissed the appeal and upheld the order passed by the AO/AU. Now revenue is in appeal before the Tribunal. 6. Before us, the learned Authorised Representative submitted that the assessment as well as the first appellate proceedings were concluded without the assessee being able to effectively place the relevant facts and documentary evidence on record. It was submitted that the assessee is now willing to furnish the necessary evidence in support of the nature and source of the time deposits and also explain the interest income earned on securities. The learned Departmental Representative, on the other hand, supported the orders of the lower authorities and submitted that sufficient opportunities had been granted to the assessee, which were not availed of. Accordingly, it was prayed that the appeal be dismissed. 7. We have heard the rival submissions and perused the material available on record. The undisputed facts are that the reassessment was completed ex parte by the Assessment Unit by treating the renewed time deposits of Rs.1,15,00,000/- as unexplained money u/s. 69A of the Act and by assessing interest income of Rs.1,64,661/- under the head “Income from Other Sources”. We

ITA No. 3530/Chny/2026 (AY 2018-19) Dr. Rahman Foundation Vs ITO (E) Ward-2 :: 4 :: further note that the learned CIT(A) dismissed the appeal primarily on account of non-compliance/non-prosecution by the assessee. Thus, the issues relating to the nature and source of the time deposits and the correct treatment of the interest earned on securities have not been effectively adjudicated on merits on the basis of supporting evidence. In our considered view, the addition of Rs.1,15,00,000/- u/s. 69A of the Act is a substantive addition and requires examination of the actual nature and source of the deposits. Likewise, the treatment of interest income of Rs.1,64,661/- requires consideration of the relevant facts and documents. These issues cannot be properly adjudicated without affording the assessee an effective opportunity to substantiate its claims. At the same time, we are conscious of the fact that the assessee did not avail the opportunities granted by the Assessing Authority as well as the learned CIT(A). Therefore, the assessee cannot take the present opportunity as a matter of right to repeatedly seek adjournments or to perpetuate non-compliance. Nevertheless, in the interest of substantial justice, we deem it appropriate to provide the assessee one final opportunity to present its case before the Assessing officer (JAO). Accordingly, the impugned order of the learned CIT(A) is set aside and the matter is restored to the file of the AO (JAO) for de novo adjudication. The AO shall adjudicate the appeal afresh after providing a reasonable and effective opportunity of being heard to the assessee. The assessee shall be at liberty to furnish all relevant documentary evidence in support of its claim regarding the nature and source of the renewed time deposits of Rs.1,15,00,000/- and the interest income of Rs.1,64,661/-. The AO shall examine the evidence furnished by the

ITA No. 3530/Chny/2026 (AY 2018-19) Dr. Rahman Foundation Vs ITO (E) Ward-2 :: 5 :: assessee and adjudicate all issues raised before it. The AO shall pass a speaking and reasoned order on merits in accordance with law. Needless to say, the assessee shall extend full cooperation in the assessment proceedings and shall not seek unnecessary adjournments. If the assessee fails to avail the opportunity so granted, the learned AO shall be at liberty to proceed with assessment proceedings in accordance with law on the basis of material available on record. Since the matter is being restored to the file of the AO, we refrain from expressing any opinion on the merits. All issues are left open for fresh adjudication by the AO (JAO). 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on the 08th day of September, 2026 in Chennai.

Sd/- Sd/- (इंतूरी रामा राव) (मनु कुमार िग�र) (INTURI RAMA RAO) (MANU KUMAR GIRI) लेखा सद*य/ACCOUNTANT MEMBER �या�यक सद*य/JUDICIAL MEMBER चे�नई/Chennai, +दनांक/Dated: 08th September 2026. SNDP, Sr. PS Digitally signed SANDEE by SANDEEP KUMAR P KUMAR Date: 2026.09.11 12:56:21 +05'30'

ITA No. 3530/Chny/2026 (AY 2018-19) Dr. Rahman Foundation Vs ITO (E) Ward-2 :: 6 :: आदेश क� �त,ल-प अ.े-षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF