What did the Tribunal hold?

The Tribunal found that the CIT(A) passed an ex-parte order without considering the reply filed by the assessee during appellate proceedings. To meet the ends of justice, the Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO.

The assessee, an individual, had substantial cash deposits of Rs. 21,60,000/- during demonetization. The Assessing Officer (AO) added the entire amount as unexplained cash deposits. The CIT(A) dismissed the assessee's appeal ex-parte.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without considering the assessee's submissions. Whether the addition of unexplained cash deposits was justified without proper consideration of evidence.

Pandari Raji, Kanchipuram vs ITO | ITAT Chennai 2026

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI ABY T VARKEY & SHRI S. R. RAGHUNATHA

Hearing: 21.07.2026Pronounced: 01.09.2026

आयकर अपीलीय अधिकरण, ‘ए ’ न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI श्री एबी टी वर्की, न्याययर्क सदस्य एवं श्री एस. आर. रघुनाथा, लेखा सदस्य के समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2699/Chny/2026 निर्धारण वर्ा / Assessment Year: 2017-18 Pandari Raji The Income Tax Officer 902, Viveganandha Street vs. Ward - 1 Anni Velanganni Nagar Kancheepuram. Sandhavellore, Kanchipuram – 602 106. (प्रत्यर्थी/Respondent) [PAN: BFXPR6072L] (अपीलधर्थी/Appellant) अपीलधर्थी की ओर से/Appellant by : Shri. S.Girish Kumar, Advocate प्रत्यर्थी की ओर से/Respondent by : Ms.Anshu Sharawat, Addl.CIT

सुिवधई की तधरीख/Date of Hearing : 21.07.2026 घोर्णध की तधरीख/Date of Pronouncement : 01.09.2026 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : The present appeal is filed by the assessee against the order dated 20.03.2026 passed by the learned Commissioner of Income Tax (Appeals), Addl/JCIT(A)-1, Chandigarh (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 14.12.2019 passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), pertaining to Assessment Year (A.Y.) 2017-18.

:-2-: ITA. No:2699/Chny/2026 2. Brief facts of the case are that the assessee is an individual, deriving income from embroidery and Chumki work on sarees and has filed his return of income for AY 2017-18, declaring total income of Rs.3,35,000/-. The case was selected for scrutiny under CASS to verify the substantial cash deposits to the tune of Rs.21,60,000/- made by the assessee during the demonetization period, accordingly statutory notices were issued to the assessee and by calling for details. In response, the assessee has partly submitted the reply for verification. On perusal of the reply submitted by the assessee, the AO found that the cash deposit of Rs.8,00,000/- has been explained as withdrawn and redeposit of cheque, but no satisfactory explanation for Rs.21,60,000/- was furnished. Therefore, the AO completed the assessment by passing an order u/s.143(3) of the Act dated 14.12.2019 by making an addition of Rs.21,60,000/- as unexplained cash deposits.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 22.01.2020.

At the outset, we observed that ld.CIT(A) has provided four opportunities for the assessee to appear for hearings as detailed in paragraph 1 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A) passed an exparte order dated 20.03.2026 by confirming the order of the AO. Aggrieved by the impugned order of the Ld.CIT(A), the assessee is in appeal before us.

The ld.AR submitted that the assessee has electronically submitted the reply along with supporting documents on 08.03.2021 and the ld.CIT(A) passed an exparte order without considering the reply filed by the assessee during appellate proceedings. was not considered the reply. Therefore, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO. Further, ld.AR assured the bench that the

:-3-: ITA. No:2699/Chny/2026 ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively.

Per contra, the ld.DR submitted that both the AO and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an order by considering the information available with the department and partially reply submitted by the assessee and on appeal the same has been dismissed by the ld.CIT(A) without considering the reply filed by the assessee during appellate proceedings.

In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to frame the assessment denovo and pass the order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file the details and relevant documents if advised so.

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

Order pronounced in the open court on 01st September, 2026 at Chennai.

Sd/- Sd/- (एबी टी वर्की ) (एस. आर. रघुिधर्थध) (ABY T VARKEY) (S. R. RAGHUNATHA) न्याययर्क सदस्य/Judicial Member लेखधसदस्य/Accountant Member

:-4-: ITA. No:2699/Chny/2026 चेन्िई/Chennai, ददिधंक/Dated, the 01st September, 2026. Devadas आदेश की प्रनतललपप अग्रेपर्त/Copy to: 1. अपीलधर्थी/Appellant 2. प्रत्यर्थी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. पवभधगीय प्रनतनिधर्/DR 5. गधर्ा फधईल/GF Digitally signed by DEVADAS DEVADAS GOPALANACHARY GOPALANACHARY Date: 2026.09.03 10:32:12 +05'30'

PANDARI RAJI,KANCHIPURAM vs. ITO, WARD-1, KANCHIPURAM

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