C. SENTHILKUMAR,CHENNAI vs. DCIT, NON CORPORATE CIRCLE-10(1), CHENNAI

आदेश / O R D E R PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the assessee is directed against the order dated 23.06.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as "the ld. CIT(A)"], for the Assessment Year 2017-18, whereby the assessment framed under section 143(3) of the Income Tax Act, 1961 ("the Act") was confirmed.

ITA No 2316/Chny/2025 (AY 2017-18) C. Senthilkumar Vs DCIT NCC-10(1) :: 2 :: 2. Brief facts of the case are that the assessee is an individual who filed his return of income for A.Y. 2017-18 on 31.10.2017 declaring total income of Rs.73,49,670/-. The case was selected for scrutiny under CASS. During the course of assessment proceedings, the Assessing Officer (“AO”) noticed from the Form 26AS statement that contract receipts were reflected at Rs.16,38,82,180/-, whereas turnover disclosed in the return of income was Rs.14,01,26,114/-. The AO accordingly treated the difference of Rs.2,37,56,066/- as undisclosed income, observing that the assessee had claimed TDS in respect of the receipts but had not disclosed the corresponding receipts in the return. The AO further noticed that employees’ contribution towards PF amounting to Rs.6,60,135/- had allegedly not been deposited within the prescribed due dates and, accordingly, made a further disallowance/addition of Rs.6,60,135/-.Thus, the total additions/disallowances under dispute amounted to Rs.2,44,16,201/-. 3. Since additional evidence had been furnished, the CIT(A) called for a remand report from the AO. The AO submitted the remand report dated 02.01.2025.The CIT(A) recorded that the remand report had been shared with the assessee on 09.05.2025 with a direction to furnish a rejoinder by 20.05.2025. Since no rejoinder was filed by the assessee within the stipulated time, the CIT(A) proceeded to adjudicate the appeal. The CIT(A), while admitting the additional evidence in the interest of natural justice, relied upon the remand report of the AO. It was observed that the assessee had not properly reconciled the difference of Rs.2,37,56,066/- and that, during remand proceedings, different figures had allegedly been

ITA No 2316/Chny/2025 (AY 2017-18) C. Senthilkumar Vs DCIT NCC-10(1) :: 3 :: furnished by the assessee. The CIT(A) therefore held that the assessee had failed to satisfactorily explain the difference in turnover and confirmed the addition of Rs.2,37,56,066/-.As regards employees’ PF contribution of Rs.6,60,135/-, the CIT(A) observed that the assessee had failed to demonstrate before the AO during remand proceedings that the payments were made within the prescribed time. Relying upon the judgment of the Hon’ble Supreme Court in Checkmate Services P. Ltd. v. CIT, the CIT(A) confirmed the said addition/disallowance. Consequently, the appeal was dismissed. 4. None appeared for assessee. 5. The Revenue supported the orders of the AO and CIT(A). It is contended that the assessee had failed to satisfactorily reconcile the substantial difference between the receipts reflected in Form 26AS and the turnover disclosed in the return. The Revenue further relied upon the findings recorded in the remand report and submitted that the assessee had not furnished a proper reconciliation or supporting evidence establishing that the disputed receipts did not represent undisclosed income. In respect of employees’ contribution to PF, the Revenue relied upon the law laid down by the Hon’ble Supreme Court in Checkmate Services P. Ltd. v. CIT and supported the confirmation of the addition. 6. We have considered the submissions of the Ld. DR for the Revenue and the material available on record. We note that the additional evidence furnished by the assessee had been admitted by the CIT(A) and that, consequently, a remand report was called for from the AO. The remand report was submitted by the AO on 02.01.2025. However, the assessee disputed the

ITA No 2316/Chny/2025 (AY 2017-18) C. Senthilkumar Vs DCIT NCC-10(1) :: 4 :: observations/findings contained in the remand report and sought an effective opportunity to explain and rebut the same. We are of the opinion that the principles of natural justice require that when a remand report containing adverse observations is relied upon for deciding an appeal, the assessee should have a meaningful and effective opportunity to meet the contents thereof. Mere communication of the remand report, without ensuring an effective opportunity to furnish a rejoinder and have the same considered before adjudication, would not meet the requirements of fair hearing. We further consider that the controversy concerning the difference in contract receipts involved factual reconciliation and examination of supporting documents. Therefore, the assessee’s explanation/rejoinder to the observations of the AO in the remand report was relevant for proper adjudication of the issue.In these circumstances, without expressing any final opinion on the merits of the additions/disallowances, the we consider it appropriate to restore the matter to the file of the CIT(A).The order of the ld.CIT(A) is accordingly set aside and the matter is restored to his file for fresh adjudication. The CIT(A) shall provide the assessee an effective and reasonable opportunity to file a rejoinder to the remand report dated 02.01.2025, along with supporting documents/evidence, if any. The ld. CIT(A) shall thereafter consider the assessee’s rejoinder, the remand report, the assessment order and all other material available on record and decide the appeal afresh in accordance with law, after affording due and reasonable opportunity of being heard to the assessee.

ITA No 2316/Chny/2025 (AY 2017-18) C. Senthilkumar Vs DCIT NCC-10(1) :: 5 :: 7. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on the 10th day of August,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: 10th August 2026. SNDP, Sr. PS 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

SAND Digitally signed by EEP SANDEEP KUMAR KUM Date: 2026.08.11 AR 17:43:34 +05'30'