SYED ZULFIQHAR ALI,VELLORE vs. ITO, WARD-3,, VELLORE

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ITA 894/CHNY/2026Status: DisposedITAT Chennai25 May 2026AY 2018-194 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the Commissioner of Income Tax (Appeals) passed an ex-parte order without considering the merits of the appeal, violating natural justice. The Tribunal also noted that the assessee did not get a proper opportunity before the AO.

What were the facts?

The Assessing Officer (AO) reopened the assessment of the assessee based on information about significant cash withdrawals from a bank account. The AO made a substantial addition to the assessee's income, treating the entire bank credit as unexplained. The assessee claimed not to have received notices from the AO.

What were the issues?

Whether the ex-parte order passed by the CIT(A) was valid and whether the assessee was provided with adequate opportunity to present their case before the AO.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI INTURI RAMA RAO

Hearing: 20.04.2026Pronounced: 25.05.2026

आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeal)/NFAC, (hereinafter referred to as the ‘Ld.CIT(A)‘), Delhi, dated 13.01.2026 for the Assessment Year (hereinafter referred to as the w2q‘AY‘) 2018-19 u/s.147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘).

ITA No. 894 /Chny/2026(AY 2018-19) Syed Zulfiqhar Ali :: 2 :: 2. At the outset, the Ld.AR of the assessee submitted that the Ld.CIT(A) has passed ex parte order qua assessee without going into the merits of the grounds of appeal raised by him. He also pointed out that the AO has passed the assessment without hearing the assessee and made huge addition of Rs.3,68,24,836/-(added entire credit in his bank account maintained at ICICI Bank). by relying on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC), he pleaded for one more opportunity before AO.

3.

Per contra, the Ld.DR does not want to give one more inning to the assessee.

4.

We have heard both the parties and after perusing of the records, it is noted that the AO received information that the assessee has withdrawn cash to the tune of Rs.3,73.63,300/- from his current account maintained at ICICI Bank, but did not file return of income for the relevant A.Y.2018-19. Hence, he reopened the assessment of the assessee by issuing notice u/s.148 of the Income Tax Act (hereinafter referred to as “Act”) on 12.04.2022. Pursuant to which assessee filed return of income declaring an income of Rs.2,95,770/-. The AO asked the assessee to prove the nature and source of the cash deposits/withdrawals which according to the AO assessee failed to respond. Hence, the AO is

ITA No. 894 /Chny/2026(AY 2018-19) Syed Zulfiqhar Ali :: 3 :: noted to have added the entire credit in his bank account maintained at ICICI Bank to the tune of Rs.3,68,24,836/- u/s.69A of the Act. On appeal, finding no response of the assessee to his notices, Ld.CIT(A) dismissed the appeal of the assessee without going into the merits of the grounds of appeal raised by assessee. We do not countenance the action of the Ld.CIT(A) for the reason that the assessee claims to have not received any notices from the Ld.CIT(A). Hence, there is violation of natural justice, hence, we set aside the impugned order of the Ld.CIT(A). Having held so, we also take note of the fact that AO has added entire credit in assessee’s bank account since assessee failed to reply to the notices calling for the nature and source of the bank credit/withdrawals. The assessee claimed that he has not received any notice from AO after he filed his return of income. Be it as may be, since the assessee did not get proper opportunity before the AO, relying on the decision of the Hon’ble Supreme Court in the case of TIN Box supra, we are inclined to grant one more opportunity to the assessee to prove the nature and source of the cash deposit before the AO. The assessee is directed to diligently participate and file relevant documents/material to prove the nature and source of the bank credit and thereafter the AO to pass fresh assessment in accordance with law after hearing the assessee.

ITA No. 894 /Chny/2026(AY 2018-19) Syed Zulfiqhar Ali :: 4 ::

5.

In the result, grounds raised by the assessee are allowed for statistical purposes.

Order pronounced on the 25th day of May, 2026, in Chennai.

Sd/- Sd/- (इंटूरी रामा राव) (एबी टी. वर्की) (INTURI RAMA RAO) (ABY T. VARKEY) लेखा सदस्य/ACCOUNTANT MEMBER न्यानयक सदस्य/JUDICIAL MEMBER

चेन्नई/Chennai, ददनाांक/Dated: 25th May, 2026. KB आदेश की प्रनतललपप अग्रेपर्त/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकरआयुक्त/CIT, Chennai / Madurai / Salem / Coimbatore. 4. विभागीयप्रविविवि/DR 5. गार्डफाईल/GF

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