DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 2(1), TRICHY STATIONED AT THANJAVUR, THANJAVUR vs. DHARMARAJAN ARUMAIKKANNU, THANJAVUR

Briefly, the facts of the case are that the respondent-assessee is an Individual. The Return of Income for the Assessment Year 2018-19 was filed by the appellant on 18.07.2018 disclosing total income of Rs.12,06,870/-.

Subsequently, based on the information that the respondent-assessee had purchased an immovable property for a consideration of rs.67,53,308/- and there was a difference of Rs.3,23,292/- of sale consideration declared and value adopted for stamp duty purpose, such difference amount is liable to tax u/s.56(vii)(2)(b) of the Act. The Assessing Officer formed an opinion that the income got escaped assessment from tax. Accordingly, a notice u/s.148 of the Act was issued on 31.03.2022. In response to notice u/s.148 of the Act, the appellant filed Return of Income on 22.04.20022 disclosing a total income of Rs.12,06,870/-. The appellant had not complied with the notice issued u/s.142 of the Income Tax Act, 1961. In the circumstances, e-Assessment Unit of the Department(hereinafter called ‘AO’) had proceeded with framing the best judgement assessment vide order dated 20.03.2023 passed u/s.147 r.w.s 144 read with 144B of the Act at a total income of Rs.1,65,63,331/-. While doing so, the Assessing Officer made addition of Rs.1,35,06,616/- as unexplained investments and also made addition of term deposit of Rs.13,50,000/- as unexplained investment and addition u/s.56(vii)(2)(b) of Rs.3,23,292/-.

Being aggrieved by the above assessment order, the appellant preferred an appeal before ld.CIT(A), who vide impugned order considering the evidence of statement of bank accounts etc. had held that the source for the investment of C.O.No.45/CHNY/2026 immovable property to the extent of Rs.1,35,06,616/- stands explained and accordingly, directed the Assessing Officer to delete the addition. The ld.CIT(A) also delete the addition made u/s.56(vii)(2)(b) of Rs.3,23,292/- by citing that the difference is less than 5%

Challenging these findings of the ld.CIT(A) deleting the addition, Revenue is in appeal before this Tribunal.

The learned Sr.DR submits that the ld.CIT(A) granted the relief by directing the Assessing Officer to delete the addition of Rs.1,35,06,616/- considering the additional evidence filed during the course of proceedings before the ld.CIT(A). Thus, it was clear that the ld.CIT(A) in utter disregard of provisions of Rule 46A granted relief to the appellant.

On the other hand, ld.AR for the Assessee vehemently opposed the above submissions made and submitted that these evidences had part of the record before the Assessing Officer and no additional evidence was filed.

We heard rival submissions and perused the material available on record. We find from the material on record that the assessment order was passed u/s.144 for the failure of the appellant to comply with the notice u/s.142(1) of the Income Tax Act, 1961. The Assessing Officer made addition on account of unexplained investments on immovable property and term deposits and the addition u/s.56(vii)(2)(b) of the Act. However, during the course of proceedings before the ld.CIT(A), the respondent-assessee filed additional evidence in support of the source of the investments made on immovable property. The ld.CIT(A) considering the additional evidence filed before him reached conclusion as to the satisfaction of the source of the investments on immovable property. We are unable to discern from the material on record that the ld.CIT(A) had given an opportunity of rebutting the evidence filed before him before Assessing Officer as the original assessment order was passed ex parte. In terms of the provisions of Rule 46A of the Income Tax Rules, the ld.CIT(A) can admit the additional evidence in the circumstances prescribed therein, once the ld.CIT(A) is satisfied with the reason for admission of additional evidence, the ld.CIT(A) is bound to give an opportunity to the Assessing Officer to rebut the evidence filed before him and call for remand report from the Assessing Officer. In the present case, there is nothing on the record showing the compliance of provisions of Rule 46A by the ld.CIT(A), therefore, we are of the considered opinion that the matter requires a remand to the file of ld.CIT(A) with a direction to comply with provision of Rule 46A of the Income Tax Rules on the additional evidence considered by him.

In the result, appeal filed by the Revenue stands partly allowed for statistical purpose.

The Cross Objection appeal filed by the assessee seeking deletion of addition on term deposits of Rs.13,50,000/- as unexplained investment. It is submitted that the deposits were made out of the maturity proceeds of earlier deposit. It is submitted that the ld.CIT(A) had not adjudicated the grounds of appeal challenging this addition. We had carefully perused the order passed by the ld.CIT(A) and find that the appellant had not raised any grounds of appeal challenging addition of term deposit of Rs.13.50 lakhs as unexplained money. This does not form part of the findings of the ld.CIT(A). It is settled position of law that the cross objection cannot be filed by the assessee seeking additional relief than granted by the ld.CIT(A).

In the result, cross objection appeal filed by the assessee stands dismissed.

To sum up, appeal filed by the Revenue partly allowed for statistical purpose and cross objection appeal filed by the assessee dismissed. Order pronounced in the open Court on 3rd July, 2026. (MANU KUMAR GIRI) ACCOUNTANT MEMBER Chennai; िदनांक / Dated : 3rd July, 2026 SGR, Sr.PS आदेश क" "ितिलिप अ"ेिषत / Copy of the Order forwarded to : अपीलाथ" / The Appellant.