VELUSAMY SURESHKUMAR,COIMBATORE vs. ITO, COIMBATORE

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ITA 2324/CHNY/2026Status: DisposedITAT Chennai29 June 2026AY 2023-245 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal observed the assessee's casual approach but believed in substantive adjudication over ex-parte assessment. It granted a final opportunity to the assessee to represent the case before the AO for a de novo assessment.

What were the facts?

The assessee's return of income was selected for scrutiny due to high-value cash withdrawals. The Assessing Officer (AO) made an ex-parte assessment as the assessee did not explain significant bank credits and withdrawals. The appeal before the CIT(A) was dismissed in limine for being time-barred.

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal in limine due to delay without providing a reasonable opportunity for explanation. Whether the matter should be remanded to the AO for a de novo assessment.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 144,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: HONOURABLE SHRI ABY T. VARKEY & SHRI GAGAN GOYAL

Hearing: 18.06.2026Pronounced: 29.06.2026

आयकर अपीलीय अधिकरण ‘सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI माननीय श्री एबी टी. वर्की, न्याययक सदस्य एवं श्री गगन गोयल लेखा सदस्य के समक्ष BEFORE HONOURABLE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 2324, 2335 & 2336/Chny/2026 ननिाारण वर्ा /Assessment Years: 2023-24 Velusamy Sureshkumar v. The Income Tax Officer, No.1/587, Devarayanpalayam, Chetti Non-Corp Ward-4(1), Thottam, Amman Nagar, Ichipatti, Coimbatore. Somanur S.O, Coimbatore, Tamil Nadu-641 668. [PAN: EGHPS8810M] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. Senthil Kumar, Advocate, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Mr. Chilaka Marthi Vijay Raju, Addl. CIT, Ld. DR सुनवाईकीतारीख/Date of Hearing : 18.06.2026 घोषणाकीतारीख /Date of Pronouncement : 29.06.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: These appeals are preferred by the assessee against the order of Ld. Commissioner of Income Tax (A) / NFAC, (hereinafter referred as the ‘Ld. CIT(A)’) dated 26.03.2026 for the Assessment Year (hereinafter referred as the ‘AY’) 2023- 24.

GROUNDS OF APPEAL ITA 2324 1) The Impugned Order is bad, erroneous and unsustainable in law. 2) The Ld. First Appellate Authority erred in alleging that the Appellant did not file an application for condonation of delay, while the Appellant had filed an application for condonation of delay explaining the reason for delay along with the appeal.

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ITA No.2324, 2325 & 2326/Chny/2026 (2023-24) Velusamy Sureshkumar 3) Without prejudice, the Ld. First Appellate Authority erred in dismissing the appeal on the point that the Appellant did not give a plausible explanation for delay, while the notices issued during the first appeal proceeding sought only for written submissions in support of the grounds of appeal and not regarding the delay in filing the appeal.

4) Without prejudice, the Ld. First Appellate Authority erred in not providing a reasonable opportunity to the Appellant to explain the delay in filing the appeal.

And, for all other reasons and grounds that may be adduced later, the Appellant sincerely prays that the present appeal may be admitted, duly considered and justice be rendered.

ITA 2335

GROUNDS OF APPEAL

1) The Impugned Order is bad, erroneous and unsustainable in law.

2) The Ld. First Appellate Authority erred in stating that Appellant did not comply with the notices during the appellate proceeding, while the Appellant has responded to all the notices issued.

3) Without prejudice, the Ld. First Appellate Authority was totally unfair and unreasonable to state that the Appellant was not interested to pursue the appeal, when the Department had issued only one notice during the entire proceeding which was replied to by the Appellant.

4) Without prejudice, the Ld. First Appellate Authority failed to adjudicate the appeal on merits based on the grounds of appeal and dismissed the appeal only on the ground that the Appellant did not file any submissions.

5) Without prejudice, the Ld. First Appellate Authority erred in not considering the fact that the Appellant had produced enough proof to show that he was only a Business Correspondent, who earns only commission income, which makes him not liable to get his books audited under the Act.

6) Without prejudice, a proper perusal of the order of the Ld. First Appellate Authority would show that there was no application of mind to the facts and the grounds of appeal of the case and that the content was copied and pasted for all the penalty proceeding pertinent to the impugned year, which makes the order obsolete.

And, for other reasons and grounds that may be adduced later, the Appellant sincerely prays that the present appeal may be admitted, duly considered and justice be rendered

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ITA No.2324, 2325 & 2326/Chny/2026 (2023-24) Velusamy Sureshkumar ITA 2336

GROUNDS OF APPEAL

1) The Impugned Order is bad, erroneous and unsustainable in law.

2) The Ld. First Appellate Authority erred in stating that Appellant did not comply with the notices during the appellate proceeding, while the Appellant has responded to all the notices issued.

3) Without prejudice, the Ld. First Appellate Authority was totally unfair and unreasonable to state that the Appellant was not interested to pursue the appeal, when the Department had issued only one notice during the entire proceeding which was replied to by the Appellant.

4) Without prejudice, the Ld. First Appellate Authority failed to adjudicate the appeal on merits based on the grounds of appeal and dismissed the appeal only on the ground that the Appellant did not file any submissions.

5) Without prejudice, the Ld. First Appellate Authority erred in not considering the fact that the Appellant had produced enough proof to show that he was only a Business Correspondent, who earns only commission income, making the assessment and the consequential penalty invalid.

6) Without prejudice, a proper perusal of the order of the Ld. First Appellate Authority would show that there was no application of mind to the facts and the grounds of appeal of the case and that the content was copied and pasted for all the penalty proceeding pertinent to the impugned year, which makes the order obsolete.

And, for other reasons and grounds that may be adduced later, the Appellant sincerely prays that the present appeal may be admitted, duly considered and justice be rendered.

2.

The brief facts of the case are that the assessee filed his return of income on 16.08.2023 declaring total income at Rs. 4,95,550/- u/s. 139(1) of the Act. The case of the assessee was selected for scrutiny under CASS for the reason “High Value Cash Withdrawals reported in SFT or u/s. 194N of the Act”. During the year under consideration the assessee has made total credits in his bank accounts (As mentioned in the assessment order) amounting to Rs. 13,19,43,085/- and also withdrew from his bank accounts Rs. 13,17,62,717/-. As the assessee never came forward to explain this transaction, the case of the assessee was assessed u/s. 144 r.w.s. 144B of the Act and income was assessed after applying 8% on the total

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ITA No.2324, 2325 & 2326/Chny/2026 (2023-24) Velusamy Sureshkumar deposits of Rs. 13,19,43,085/- amounting to Rs. 98,90,786/- (Rs. 1,03,86,336/- (-) 4,95,500/-, i.e. already shown).

3.

The assessee being aggrieved with the same preferred an appeal before the Ld. CIT(A), who in turn dismissed the appeal of the assessee in Limine on the ground of unexplained delay in filing of appeal, as the appeal was time barred by 166 days. The assessee being further aggrieved, preferred the present appeal before us. 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 approach of the assessee was casual throughout the proceedings before the lower authorities and even before us.

4.

As mentioned, (supra) the assessee was never participated in the proceedings before the AO, resulted in an ex-parte assessment. In that situation after filing of the appeal before the Ld. CIT(A), the assessee has to be very vigilant and cooperative other than explaining his delay in filing of appeal also. But, as observed (supra), the assessee neither explained his delay in filing of appeal nor came forward with relevant evidences to explain his transactions as discussed in the assessment order. Now, before us also, the assessee is supposed to demonstrate his willingness and ability to represent the matter before the lower authorities by filing relevant document/explanations and evidences for our perusal.

5.

In case of ex-parte assessment/appeal proceedings, it is always imperative at the end of the appellant that he should come forward with the relevant information alongwith evidences. So that the authority concerned can atleast have a look of the information and intentions of the party to pursue the matter diligently and seriously this time and matter will reach to its logical conclusion. But in the appeal before us the endeavor of the assessee is not found to be as per the procedure laid down by the law. Still, this Tribunal being the final fact-finding authority believes in the theory of substantive adjudication instead of ex-parte assessment. As the matter pertains to levy and consequential recovery of Tax, we deem it fit to give the assessee a final opportunity to represent his case before the AO. In view of this, the matter is restored back to the file of the AO with a direction to carry out the assessment de-

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ITA No.2324, 2325 & 2326/Chny/2026 (2023-24) Velusamy Sureshkumar novo on similar issues as raised earlier after giving the assessee an opportunity of being heard. The assessee is directed to be vigilant enough this time and positively participate in the proceedings before the AO without fail and seeking any adjournment. In the result, grounds raised by the assessee are allowed for statistical purposes.

6.

In view of above, ITA No. 2324/Chny/2026, ITA No. 2335/Chny/2026 and ITA No. 2336/Chny/2026 are allowed for statistical purposes as the ultimate outcome of ITA No. 2335/Chny/2026 and ITA No. 2336/Chny/2026 are based on ITA No. 2324/Chny/2026.

7.

In the result, all the three appeals are allowed for statistical purposes with above observations and directions.

Order pronounced on the 29th day of June, 2026, in Chennai.

Sd/- Sd/- (एबी टी. वर्की) (गगन गोयल) (ABY T. VARKEY) (GAGAN GOYAL) न्याययक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, ददनाांक/Dated: 29th June, 2026. KB आदेश की प्रयतललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रयतयनधि/DR K Digitally signed by K BABU 5. गार्ड फाईल/GF Date: BABU 2026.07.01 09:36:29 +05'30'

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