MOHAMMED HANIFA SHAKUL,CHENNAI vs. CIT APPEALS CHENNAI, CHENNAI

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ITA 2148/CHNY/2026Status: DisposedITAT Chennai03 September 2026AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal due to the assessee's medical condition and the accountant's abrupt resignation. The case was remitted back to the AO for fresh adjudication to provide the assessee with an opportunity to present necessary details.

What were the facts?

The assessee did not file a return of income. The AO reopened the assessment after receiving information about cash deposits during demonetization. The assessee claimed the source was scrap business, but the AO treated the deposits as unexplained under Section 69.

What were the issues?

Whether the cash deposits made during demonetization are unexplained. Whether the delay in filing the appeal should be condoned.

Which sections of the Income-tax Act were involved?

Section 69,Section 148,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & MS. PADMAVATHY.S

For Respondent: Ms. Samatha M.Mullamudi, JCIT

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 26.11.2024 for Assessment Year (AY) 2017-18.

2.

The assessee is an individual and did not file the return of income. The AO received information that the assessee has made cash deposits amounting to Rs.14,37,597/- during the demonization period in the savings bank account.

ITA No.2148/Chny/2026 Mohammed Hanifa Shakul :- 2 -:

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 assessee in response to notice u/s. 148 of the Act filed the return of income on 27.08.2019 declaring total income of Rs. 10,23,340/-. However, the A.O treated the said return as invalid for the reason that, it is filed beyond the prescribed time limit in the notice issued. The assessee submitted before the AO that the source for the cash deposit is from the proprietorship scrap business carried on by him in the name of Hanifa Steel Traders. The assessee also stated that he has received rental income of Rs. 4,98,126/- and business income of Rs. 5,69,124/- during the year under consideration. The AO held that the assessee has deposited cash in Specified Bank Notes (SBNs) which have become invalid legal tender and therefore the source for cash stated as sale of scrap cannot be accepted. Accordingly, the AO treated the entire cash deposit as unexplained u/s. 69 of the Act. Aggrieved, the assessee filed further appeal before the CIT(A). The assessee did not furnish any further details before the CIT(A) and hence the CIT(A) passed an ex-parte order confirming the addition made by the AO.

3.

There is a delay of 439 days in filing the appeal by the assessee. The assessee has filed condonation petition/affidavit stating the following reasons for delay in filing the appeal: 4. Reasons for Delay: Medical Invalidation: During the relevant period, I was suffering from severe medical ailments, which restricted my physical movement and severely impaired my ability to attend to routine business affairs and legal tax compliance. Abrupt Resignation of Accountant: The accountant who was entrusted with managing the books of accounts, correspondence, and income tax portal scrutinise abruptly left the employment without prior intimation or handover. Crucially, he failed to inform me regarding the

ITA No.2148/Chny/2026 Mohammed Hanifa Shakul :- 3 -:

receipt/communication of the impugned order dated 26.11.2024 passed by the CIT(A). Late Knowledge: On account of my continuous illness and the sudden absence of the accountant, I was completely unaware of the passing of the impugned order. I came to know about the order and the outstanding tax demand only very late, nearly a year after its issuance. Immediate Remedial Action: Immediately upon acquiring knowledge of the order, I took steps to consult legal counsel, compile the requisite records, prepare Form 36, and file the appeal before this Hon'ble Tribunal on 15.04.2026. 5. Bona Fide Intent: The delay of 439 days was neither intentional nor deliberate, but was solely due to factors beyond my control-namely, my medical condition and the unexpected default/departure of my accountant without notice.”

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 assessee is not well educated, and his affairs are managed by the accountant. The Ld. AR further submitted that the accountant suddenly left the organization due to which the assessee did not receive the communication from the CIT(A) regarding the appellate proceedings. The Ld. AR also submitted that the assessee is not well aware of the income tax proceedings and completely relied on his counsel for handling the tax matters, who did not provide proper support. The ld. AR accordingly prayed for one more

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opportunity and providing an undertake that the case would be properly represented. Considering the facts and circumstances peculiar to assessee's case, we are inclined to give one more opportunity to the assessee in the interest of natural justice and fair play to represent the case properly by producing the required details. Accordingly, we remit the impugned issues back to the A.O with a direction to call for necessary details and decide the issue in accordance with law. The assessee is directed to submit the necessary 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 03rd day of September, 2026 at Chennai.

Sd/- Sd/- (एबी टी. वक�) (पदमावती यस) (ABY. T. Varkey) (Padmavathy.S) लेखा सद�य /Accountant Member �या�यक सद�य / Judicial Member चे�नई/Chennai, �दनांक/Dated: 03rd September, 2026. EDN, Sr. P.S EJTADA Digitally signed by आदेश क� ��त!ल"प अ#े"षत/Copy to: EJTADA DURGA DURGA 1. अपीलाथ�/Appellant NARESH Date: 2026.09.04 NARESH 2. ��थ�/Respondent 17:41:40 +05'30' 3. आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF

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