VENKATACHALAM ELANGOVAN,SALEM vs. ITO, WARD-1(1), SALEM

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ITA 3220/CHNY/2026Status: DisposedITAT Chennai07 August 2026AY 2022-234 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the matter back to the CIT(A) for reconsideration, granting the assessee another opportunity to be heard. This was done because the assessee had participated before the AO, but was absent before the CIT(A).

What were the facts?

The assessee's appeal before the CIT(A) was dismissed for non-prosecution. The assessee had declared agricultural income, but the AO made an addition of Rs. 1,17,70,500/- under Section 69A for cash deposited in the bank.

What were the issues?

Whether the CIT(A) erred in dismissing the appeal for non-prosecution without providing adequate opportunity, and whether the addition made by the AO under Section 69A was justified without proper evidence.

Which sections of the Income-tax Act were involved?

Section 69A,Section 10(1),Section 115BBE,Section 143(3),Section 144B,Section 282

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: HONOURABLE SHRI GAGAN GOYAL & SHRI MANU KUMAR GIRI

Hearing: 23.07.2026Pronounced: 07.08.2026

आयकर अपीलीय अधिकरण ’डी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI माननीय श्री गगन गोयल लेखा सदस्य के समक्ष एवं श्री मनु कुमार गगरर, न्यागयक सदस्य BEFORE HONOURABLE SHRI GAGAN GOYAL, ACCOUNTANT MEMBER AND SHRI MANU KUMAR GIRI, JUDICIAL MEMBER आयकर अपील सं./ITA No.3220 & 3121/Chny /2026 ननिाारण वर्ा /Assessment Years: 2022-23 Venkatachalam Elangovan, v. Income Tax Officer, No.293, Thandavan Nagar, Ward-1(1), Puthumariamman Kovil Street, Salem. Salem, Tamil Nadu-636 003. [PAN: AAGPE9702P] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. Hitesh, Advocate, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Ms. Sita Krishnamoorthy, JCIT, Ld. DR सुनवाईकीतारीख/Date of Hearing : 23.07.2026 घोषणाकीतारीख /Date of Pronouncement : 07.08.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of Ld. Commissioner of Income Tax (A) / NFAC, (hereinafter referred as the ‘Ld. CIT(A)’), Delhi dated 18.03.2026, for the Assessment Year (hereinafter referred as the ‘AY’) 2022-23.

GROUDS OF APPEAL 1. The order of the National Faceless Appeal Centre (NFAC), is wrong, illegal and opposed to facts of the instant case. 2. The order passed by the National Faceless Appeal Centre (NFAC), is erroneous in law, contrary to facts on record, vitiated by non-application of mind, and liable to be set aside. 3. The National Faceless Appeal Centre (NFAC) erred in disposing the appeal without providing adequate opportunity to the appellant. The said order is opposed to the provision of law and principles of natural justice.

ITA No.3220 & 3121/Chny/2026 (2022-23) Venkatachalam Elangovan 4. The NFAC ought to have seen that the impugned addition has been sustained purely on suspicion, conjectures, and surmises, without bringing on record any positive material to disprove the agricultural activity or to establish that the receipts were non-agricultural in nature. 5. The NFAC erred in confirming the addition of Rs. 1, 17, 70,500/- as unexplained money u/s 69A of the Act, despite the fact that the appellant is the owner of agricultural lands and has carried on agricultural operations thereon during the relevant previous year. 6. The NFAC erred in law and on facts in denying exemption under section 10(1) of the Act in respect of agricultural income solely on the alleged insufficiency of third-party documentation, without appreciating the nature of agricultural operations and the prevailing trade practices. 7. The NFAC erred in placing an excessive, unrealistic and impracticable burden on the Appellant to furnish formal sale bills, confirmations and vouchers, ignoring the settled legal position that agricultural transactions in rural India are predominantly cash-based and do not ordinarily involve formal documentation. 8. The NFAC erred in law and on facts in sustaining the impugned addition by disregarding the settled principle of consistency despite the Appellant's agricultural income having been examined and accepted in scrutiny assessments for earlier assessment years. 9. The NFAC erred in law in failing to appreciate that once ownership of agricultural land and cultivation activity is established, the onus shifts to the Revenue to disprove the claim of agricultural income, which onus has not been discharged in the present case. 10. The NFAC erred in law and on facts in confirming the impugned addition for the year under appeal in the absence of any material change in facts and without bringing on record any cogent, credible or positive evidence to disprove the agricultural activity or to establish that the receipts were non-agricultural in nature. 11. The NFAC erred in law and on facts in sustaining the addition under section 69A despite the Appellant having furnished a plausible, consistent and bona fide explanation as to the nature and source of the receipts, thereby rendering section 69A inapplicable, and consequently erred in upholding the application of section 115BBE, which being purely consequential, cannot survive in the absence of a valid addition under section 69A. 12. For these and such other grounds as may be urged at the time of hearing, it is most respectfully prayed that this Hon'ble Tribunal may be pleased to allow the appeal of the Appellant and render justice.

2.

The brief facts of the case are that the assessee under consideration filed his return of income on 30.12.2023 declaring total income at Rs. 60,76,970/-. The case of the assessee was selected for complete scrutiny under the CASS. After detailed deliberations between the assessee and AO the case of the assessee was assessed u/s. 143(3) r.w.s. 144B of the Act after making addition of Rs. 1, 17, 70,500/- u/s. 69A of the Act being amount of cash deposited in his bank account. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), who in turn dismissed the appeal of the assessee on the ground of non-prosecution of the same. The assessee being further aggrieved preferred the present appeal before us. Page 2 of 4

ITA No.3220 & 3121/Chny/2026 (2022-23) Venkatachalam Elangovan 3. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee alongwith grounds taken before us. It is observed that the assessee was totally absent in the proceedings before the Ld. CIT (A) and no substantive order is there for our consideration. Further, there is no evidence/explanation adduced before us to prompt our adjudication. But, as the assessee has fully participated before the AO, we deem it fit to give another opportunity of being heard to the assessee before the Ld. CIT (A). In view of the above, we restore the matter back to the file of the Ld. CIT(A) for reconsideration after giving a proper opportunity of being heard in view of section 282 of the Act and the assessee is also directed to be vigilant and cooperative enough this time without delay and seeking any adjournment. This relief to the assessee by the bench is subject to a cost of Rs. 5,000/- (Rs. Five Thousand Only) to be deposited with the Tamilnadu State Legal Services Authority within 15 days of receiving this order and the receipt of the same is to be presented before the Registry for verification. In view of the above observations and directions grounds raised by the assessee are allowed for statistical purposes only. 4. In the result, the appeal of the assessee is allowed for statistical purposes only with above observations and directions. The ITA No. 3121/Chny/2026 is rejected as the same is duplicate appeal of the ITA No. 3220/Chny/2026, already discussed and disposed of (supra).

Order pronounced on the 7th day of August, 2026 in Chennai.

Sd/- Sd/- (मनु कुमार गिरर) (गगन गोयल) (MANU KUMAR GIRI) (GAGAN GOYAL) न्याययक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, ददनाांक/Dated: 7th August, 2026. KB

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ITA No.3220 & 3121/Chny/2026 (2022-23) Venkatachalam Elangovan आदेश की प्रयतललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रयतयनधि/DR 5. गार्ड फाईल/GF K Digitally signed by K BABU BABU Date: 2026.08.12 09:13:28 +05'30'

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