GUNAPAL MURUGANANDAM,SOMANAIYAKKAN PATTI VILLAGE vs. INCOME TAX OFFICER, VELLORE

PDF · subscribers
ITA 1606/CHNY/2026Status: DisposedITAT Chennai22 July 2026AY 2015-166 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted additional evidence, including invoices and bank statements, finding it relevant to the nature and source of bank deposits. The matter was restored to the Assessing Officer for fresh adjudication, subject to the assessee paying a cost.

What were the facts?

The assessment was completed on a best judgment basis, treating cash deposits as unexplained money because the assessee neither filed a return nor complied with notices. The First Appellate Authority confirmed the addition, finding no documentary evidence for the assessee's claim of business collections.

What were the issues?

Whether the bank deposits represented unexplained money or business collections, and if additional evidence should be admitted at the appellate stage.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & MS PADMAVATHY S

Hearing: 21.07.2026Pronounced: 22.07.2026

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 19.02.2026 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2015-16.

ITA No.1606/CHNY/2026 - 2 - GunapalMuruganandam 2. At the very outset, we notice that the assessment was completed on a best judgment basis u/s.147 r.w.s 144 r.w.s.144B of the Act by treating the cash deposits of Rs.2,16,55,580/- as unexplained money u/s.69A of the Act, since the assessee neither filed the return of income nor complied with the statutory notices issued by the Assessing Officer. We further note that the First Appellate Authority confirmed the addition on the ground that the assessee had merely asserted that he was engaged as a commission agent in the mobile recharge business and that the deposits represented collections belonging to the telecom company and amounts received from customers for online services, without producing any cogent documentary evidence to substantiate such claim.

3.

The Ld. AR submitted that the assessee is an individual engaged in the business of mobile recharge as a commission agent of Vodafone Cellular Ltd. and also facilitates online TNEB bill payments and IRCTC services for customers under the name VGM Agencies. It was contended that the addition made under section 69A of the Act relates to deposits in the assessee's bank accounts, which represent business collections received from customers towards telecom recharges, railway ticket bookings and TNEB bill

ITA No.1606/CHNY/2026 - 3 - GunapalMuruganandam payments, and do not constitute the undisclosed income of the assessee. The Ld. AR further submitted that the assessee has filed a petition under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 seeking admission of additional evidence, comprising Vodafone invoices, bank statement reconciliation and an affidavit explaining the nature of the business activities. It was contended that these documents have a direct bearing on the issue in dispute and establish the nexus between the bank deposits and the business turnover. Therefore, it was prayed that the additional evidence may be admitted and the matter may be restored to the file of the AO for fresh examination and adjudication after providing the assessee with a reasonable opportunity of being heard.

4.

The Ld.DR submitted that adequate opportunities were provided from the offices of the AO & FAA and there is no violation of principles of natural justice. Therefore, it was submitted that the appeal of the assessee may be dismissed.

5.

We have heard the rival submissions and perused the material available on record. It is an admitted fact that the assessment was completed ex parte and the addition under section 69A of the Act was made in respect of the deposits reflected in the

ITA No.1606/CHNY/2026 - 4 - GunapalMuruganandam bank accounts of the assessee. The assessee has filed a petition under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 seeking admission of additional evidence comprising Vodafone invoices, bank statement reconciliation and an affidavit explaining the nature of the business. On perusal of the additional evidence, we find that the same is relevant for examining the nature and source of the bank deposits and has a direct bearing on the issue under consideration. Since these documents were not available before the Assessing Officer and require factual verification, we are satisfied that sufficient cause exists for their admission. Accordingly, in the interest of substantial justice, the additional evidence is admitted and taken on record.

6.

We further note that the proceedings before both the AO as well as the FAA were completed ex-parte on account of the non- compliance by the assessee. We strongly deprecate the nonchalant attitude of the assessee in not responding to the statutory notices issued by the tax authorities. Nevertheless, considering the nature of the additional evidence now placed before us, which requires verification at the assessment stage, and in order to afford one final opportunity to substantiate the claim that the bank deposits represent business collections and not unexplained money, we

ITA No.1606/CHNY/2026 - 5 - GunapalMuruganandam deem it appropriate to set aside the orders of the lower authorities and restore the matter to the file of the AO for fresh adjudication. However, such restoration is subject to the condition that the assessee shall pay a cost of Rs.5,000/- (Rupees Five Thousand only) to the Tamil Nadu State Legal Services Authority, Hon'ble High Court of Madras, within one month from the date of receipt of this order and produce proof of such payment before the AO. The AO shall thereafter examine the additional evidence, verify the nature and source of the impugned bank deposits, and decide the issue afresh in accordance with law after affording a reasonable opportunity of being heard to the assessee. The assessee is directed to co-operate with the Revenue and shall not seek unnecessary adjournment. It is ordered accordingly.

7.

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

Order pronounced in the open court on 22nd July,2026 at Chennai.

Sd/- Sd/- (प�मावती एस) (जॉज� जॉज� के) (PADMAVATHY S) (GEORGE GEORGE K) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�नई/Chennai, �दनांक/Dated, the 22nd July, 2026

ITA No.1606/CHNY/2026 - 6 - GunapalMuruganandam

RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Chennai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.07.24 17:04:33 +05'30'

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →