HASWINI LOGISTICS,CHENNAI vs. ITO, CHENNAI

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ITA 2188/CHNY/2026Status: DisposedITAT Chennai03 September 2026AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, relying on the Supreme Court's decision in Tin Box Co. v. CIT, held that the assessee was not afforded a proper opportunity to present its case. Therefore, the matter was restored to the AO for a fresh assessment.

What were the facts?

The assessee, Haswini Logistics, failed to respond to notices from the AO due to incorrect contact information being used. This led to an ex-parte assessment where cash deposits of Rs. 1,03,23,000/- were added as unexplained income.

What were the issues?

Whether the ex-parte assessment order passed without affording proper opportunity to the assessee is valid and whether the cash deposits can be added as unexplained income.

Which sections of the Income-tax Act were involved?

Section 69A,Section 144,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

Hearing: 13.08.2026Pronounced: 03.09.2026

आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as ‘Ld.CIT(A)’), Delhi, dated 07.05.2024 for the Assessment Year (hereinafter referred to as ‘AY’) 2017-18 u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

At the outset, the Ld. AR Mr. V. Padmanabhan, CA of the assessee submitted that the appeal has been filed belatedly before this Tribunal with a delay of 624 days. The assessee is noted to have filed an affidavit

No.2188/Chny/2026 (AY 2017-18) Haswini Logistics :: 2 :: explaining the delay, wherein it has been stated that the notices issued by the authorities below were sent to an incorrect email ID, and that the messages were also sent to an incorrect mobile number. Hence, the assessee remained unaware of the proceedings pending before the authorities below. Further, according to the assessee, since it was even unaware of the assessment proceedings, the AO proceeded to draw an adverse inference against the assessee ex-parte; and added the entire cash deposits amounting to Rs. 1,03,23,000/- as unexplained under section 69A of the Act. Then the AO computed the business income of the assessee at 12% of Rs. 13,70,194/- and made further addition of Rs. 1,64,424/-, thereby making a total addition of Rs. 1,64,87,244/-. Hence, the assessee prayed, relying upon the decision of the Hon’ble Supreme Court in the case TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC), that one more opportunity may be granted to the assessee before the AO.

3.

Per contra, the Ld. DR Smt. Samatha Mullamudi, Addl. CIT opposed the prayer of the assessee and submitted that no interference was called for and doesn’t want us to give one more opportunity to assessee.

4.

Heard both parties. The assessee is a partnership firm engaged in the business of transport and logistics. The AO received information that assessee did not file its return of income for A.Y. 2017-18, but had deposited cash to the tune of Rs. 1,03,29,000/- during the demonetization period in its bank account [maintained with Punjab National Bank]. Therefore, the AO reopened the assessment of the assessee by issuing notice under section 148 of the Act. Pursuant to the said notice also, the assessee did not file its return of income. The AO is noted to have issued several notices calling upon the assessee to explain the nature and source of the cash deposits. However, the AO noted that

No.2188/Chny/2026 (AY 2017-18) Haswini Logistics :: 3 :: the assessee did not respond to any of the six notices issued. Therefore, according to him, there was no other alternative but to complete the assessment under section 144 of the Act. Accordingly, he treated the cash deposits made during the demonetization period amounting to Rs. 1,03,23,000/- as unexplained under section 69A of the Act. Further, the AO noted that there were other credits by way of cash and through banking channels amounting to Rs. 13,73,000/- in its bank account, which were treated as receipts from business activity. Accordingly, he computed the profit thereon at the rate of 12%, amounting to Rs. 1,64,424/-, and assessed the same under the head “Profits and Gains of Business or Profession”. Thus, the AO computed the total income at Rs. 1,04,87,424/- [Rs. 1,03,23,000/- + Rs. 1,64,424/-] by passing the assessment order dated 31.08.2019.

5.

On appeal, the Ld. CIT(A) confirmed the action of the AO. Before us, the main plea of the assessee about the nature and source of the cash deposits was that it is from its business activity. In other words, it is proceeds of business. Be that as it may, as held by the Hon’ble Supreme Court in the case of Tin Box (supra), the assessment needs to be framed by the Assessing Officer after considering the evidence and material furnished by the assessee; and in case, if the assessee didn’t get proper opportunity before AO, then assessment needs to be restored back to his file for framing assessment. In the present case, it is noted that the AO had issued notices to an incorrect email ID and that the messages were also sent to an incorrect mobile number, as noted supra. Hence, the assessment has been framed ex parte qua assessee without affording proper opportunity to it. Hence relying on the decision of the Hon’ble Supreme Court in the case TIN Box Co. v. CIT (supra), we are inclined to grant one more opportunity to the assessee before the AO.

No.2188/Chny/2026 (AY 2017-18) Haswini Logistics :: 4 :: 6. In view of the above, we set aside the impugned order of the Ld. CIT(A) and restore the matter to the file of the AO for de novo assessment. The assessee has undertaken to file all the relevant documents and evidences before the AO. Accordingly, the assessee is directed to file the relevant documents and evidence explaining and substantiating the nature and source of the cash deposits without fail. Thereafter, the AO shall pass the assessment order afresh in accordance with law, after affording reasonable opportunity of being heard to the assessee.

7.

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

Order pronounced on the 03rd day of September, 2026, in Chennai.

Sd/- Sd/- (पदमावती यस) (एबी टी. वक�) (Padmavathy. S) (ABY T. VARKEY) लेखा सद�/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 03rd September, 2026. MM 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

YASHVI Digitally signed by YASHVIR R SINGH Date: SINGH 2026.09.17 23:16:53 -07'00'

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