DINESH KUMAR,CHENNAI vs. ITO, NCW-4(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 of the ld. Commissioner of Income Tax (Appeals), Chennai-18, dated 21.08.2025 for the Assessment Year 2015-16.

ITA No. 4058/Chny/2025 (AY 2015-16) Dinesh Kumar Vs ITO NCW 4(1) :: 2 :: Air Intelligence Unit, New Delhi, that the assessee, who was travelling from New Delhi to Chennai by Jet Airways Flight No. 9W- 0832 in Seat No. 35E, was carrying cash of Rs.10,00,000/-. Based on the said information, the assessee was intercepted by the Air Intelligence Unit, Chennai, at Chennai Airport, and was found to be in possession of cash amounting to Rs.10,00,000/-. 2.1 During the course of enquiry u/s. 131 of the Act, the statement of the assessee was recorded on oath. The assessee stated that he had carried the said cash from Chennai to Ludhiana for the purpose of purchasing garments and for making a distributorship deposit with M/s. Sel Mfg. Company, G.T. Road, Khandari Khurd, Ludhiana. According to the assessee, as the proposed transaction could not be finalised, he brought back the cash from Ludhiana to Chennai via New Delhi. 2.2 During the assessment proceedings, the assessee filed certain documents, including a copy of the rental agreement, details of share trading transactions, particulars of business income, and both manually prepared and typed cash books/fund flow statements. However, the AO observed that the assessee had not filed his returns of income for Assessment Years 2010-11 to 2015-16 until 22.11.2016. According to the Assessing Officer (AO), the basis on which the cash book and fund flow statements had been prepared was not established. Since the returns of income had not been filed within the prescribed time, the alleged source of cash could not be verified from the returns. 2.3 The AO further observed that the cash book and fund flow statements produced during the assessment proceedings could not be relied upon, as the opening cash balance, closing cash balance, income and expenditure reflected therein had never been disclosed

ITA No. 4058/Chny/2025 (AY 2015-16) Dinesh Kumar Vs ITO NCW 4(1) :: 3 :: before the Income-tax Department or any other authority. The assessee also failed to establish the authenticity of the entries recorded therein or furnish any corroborative evidence to substantiate the availability of cash. The AO, therefore, held that the cash book and fund flow statements were self-serving documents and did not satisfactorily explain the source of the cash of Rs.10,00,000/- found in the possession of the assessee. Accordingly, the AO treated the said amount as unexplained money u/s. 69A of the Act and brought it to tax in accordance with the provisions of section 115BBE of the Act. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the ld. Commissioner of Income-tax (Appeals). However, the ld. CIT(A) dismissed the appeal. It was observed that the Authorised Representative had appeared on one occasion and sought an adjournment, but thereafter there was no compliance with the notices of hearing issued on 26.06.2025, 07.07.2025 and 01.08.2025. In the absence of any further appearance or supporting evidence, the ld. CIT(A) confirmed the addition made by the AO. Aggrieved by the said order, the assessee is now in appeal before this Tribunal. 4. Before us, the ld. Authorised Representative sought to explain the source of the cash with reference to certain documentary evidence and submitted that sufficient opportunity had not been granted to the assessee to substantiate his claim before the lower authorities. It was further contended that the ld. CIT(A) confirmed the addition without adjudicating the issue on merits. 5. The ld. Departmental Representative, on the other hand, supported the orders of the lower authorities and submitted that the assessee had failed to avail himself of the opportunities granted

ITA No. 4058/Chny/2025 (AY 2015-16) Dinesh Kumar Vs ITO NCW 4(1) :: 4 :: during the appellate proceedings. It was, therefore, prayed that the appeal be dismissed. 6. We have considered the rival submissions and carefully perused the material available on record. We find that the ld. CIT(A) dismissed the appeal primarily on account of non-prosecution without examining the documentary evidence or adjudicating the issue on merits. Though the assessee had failed to effectively participate in the appellate proceedings, considering the nature of the addition made u/s. 69A read with section 115BBE of the Act and the explanation now sought to be supported by documentary evidence, we are of the view that the matter deserves to be reconsidered by the first appellate authority. 7. The principles of natural justice require that a reasonable and effective opportunity of being heard be afforded before an adverse decision is taken. Therefore, in the interest of substantial justice, and without expressing any opinion on the merits of the addition, we set aside the impugned order of the ld. CIT(A) and restore the matter to his file for fresh adjudication. The ld. CIT(A) shall decide the appeal afresh after affording adequate opportunity of hearing to the assessee and after considering all the documentary evidence and submissions that may be placed on record as per law. 8. The assessee is directed to extend full cooperation in the appellate proceedings and file all relevant documents and explanations within the time stipulated by the ld. CIT(A). It is made clear that in the event of any failure on the part of the assessee to comply with the notices or directions issued, the ld. CIT(A) shall be at liberty to dispose of the appeal in accordance with law on the basis of the material available on record.

ITA No. 4058/Chny/2025 (AY 2015-16) Dinesh Kumar Vs ITO NCW 4(1) :: 5 :: 9. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the 08th day of July 2026 in Chennai.

Sd/- Sd/- (एस. आर. रघुनाथा) (मनु कुमार िग�र) (S.R.RAGHUNATHA) (MANU KUMAR GIRI) लेखा सद)या/ACCOUNTANT MEMBER �या�यक सद)य/JUDICIAL MEMBER चे�नई/Chennai, *दनांक/Dated: 08th July, 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 SANDEE Digitally signed by SANDEEP KUMAR P KUMAR Date: 2026.07.08 16:17:41 +05'30'