SELVARAAJ PRABHU PREMPRASHAD,COIMBATORE vs. ITO, NCW-1(4), COIMBATORE

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ITA 155/CHNY/2026Status: DisposedITAT Chennai11 May 2026AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal before the CIT(A), setting aside the CIT(A)'s order. The matter was restored to the AO to frame the assessment denovo after providing the assessee an opportunity to be heard.

What were the facts?

The assessee, a partner in a firm that faced closure due to financial difficulties, did not file an income tax return for AY 2017-18. The Assessing Officer (AO) made additions under Section 69A and for deemed business income under Section 144 best judgment assessment.

What were the issues?

Whether the delay in filing the appeal before the CIT(A) was justifiable, and if the AO's best judgment assessment was to be sustained without further opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 144,Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI ABY T VARKEY & SHRI S. R. RAGHUNATHA

Hearing: 25.03.2026Pronounced: 11.05.2026

आयकर अपीलीय अधिकरण, ‘बी’ न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI श्री एबी टी वर्की, न्याययर्क सदस्य एवं श्री एस. आर. रघुनाथा, लेखा सदस्य के समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 155/Chny/2026 ननिाारण वर्ा / Assessment Year: 2017-18 Selvaraaj Prabhu Premprashad, Income Tax Officer, 339, R.G. Street, vs. Non-Corporate Ward -1(4), Coimbatore – 641 001. Coimbatore. [PAN: AMJPP-9100-H] (अपीलाथी/Appellant) (प्रत्यथी/Respondent) अपीलाथी की ओर से/Appellant by : Ms. Aishwariya, Ra, CA प्रत्यथी की ओर से/Respondent by : Ms. V. Supraja, Addl. CIT (Virtual) सुनवाई की तारीख/Date of Hearing : 25.03.2026 घोर्णा की तारीख/Date of Pronouncement : 11.05.2026 आदेश / O R D E R PER S.R.RAGHUNATHA, AM:

The present appeal is filed by the assessee against the order dated 03.11.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 26.09.2019 passed u/s.144 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), pertaining to Assessment Year (A.Y.) 2017-18.

:-2-: ITA No. 155/Chny/2026

2.

The brief facts emanating from the records are that the assessee is an individual, a partner of M/s.Sree Pethanachi Stores, which faced business closure during assessment year 2017-18 due to financial difficulties in repaying the loan from PNB resulting in a firm being classified as a NPA. The assessee did not have any source of income, apart from share of losses from the firm and hence, did not file return of income for the assessment year 2017-18. The AO issued notice u/s. 142(1) of the Act requesting the assessee to file his return of income and the assessee did not respond for the same. Further, the AO proceeded to assess the income of the assessee under best judgment u/s. 144 of the Act and passed an order dated 26.09.2019 by making the following additions:

(i) unexplained money u/s. 69A r.w.s. 115BBE of the Act at Rs.25,72,500/- being deposits made in cash during demonetization period (ii) deemed income from business of Rs.36,93,912/- being 10% of the total credits of Rs.3,69,39,119/- found in the bank account held by the assessee. 3. Aggrieved by the order of the AO, the assessee filed an appeal before the ld.CIT(A) on 26.06.2024 with a delay of 4 years 9 months. The assessee filed petition for condonation of delay before the ld.CIT(A) explaining the reasons for delay in filing the appeal. However, the ld.CIT(A) has dismissed the appeal of the assessee in limine without condoning the delay by stating that the assessee has not given plausible reason demonstrating sufficient cause for such huge delay by passing an order dated 03.11.2025.

4.

Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us.

5.

The ld.AR for the assessee submitted that the assessee was a partner in partnership firm which has faced financial difficulties and the borrowings in the firm has become NPA, which made the firm business to be closed during the assessment year 2017-18. Hence, the assessee could not comply with the notices during the assessment proceedings and subsequent to passing of an order was also missed due to financial stress of the assessee on account of the

:-3-: ITA No. 155/Chny/2026

closure of business of the firm, which was the only source of income. Further, the assessee had filed the condonation petition before the ld.CIT(A) explaining the reasons for delay in filing the appeal. Since, the ld.CIT(A) has dismissed the appeal in limine and the AO has passed an exparte order u/s.144 of the Act, the assessee pleaded for one more opportunity in the interest of nature justice before the AO to furnish all the details and to conclude the assessment.

6.

Per contra, the ld.DR submitted that the ld.CIT(A) has rightly dismissed the appeal of the assessee without condoning the huge amount of delay of 4 years 9 months. 7. We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an exparte order by considering the information available with the department and on appeal the same has been dismissed in limine by the ld.CIT(A), NFAC without condoning the delay in filing of the appeal before the first appellate authority.

8.

In the facts and circumstances of the present case, and in order to meet the ends of justice, we consider it appropriate to afford one more opportunity to the assessee. Accordingly, the delay in filing the appeal before the ld.CIT(A) is hereby condoned, the explanation furnished in Form 35 constituting sufficient cause for such delay. Consequently, the impugned order of the ld.CIT(A) is set aside, and the matter is restored to the file of the AO, who is directed to frame the assessment denovo in accordance with law, after providing a reasonable opportunity of being heard to the assessee. Needless to say that the assessee shall act with due diligence and shall file necessary written submissions and relevant documentary evidence, as may be advised.

9.

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

:-4-: ITA No. 155/Chny/2026 Order pronounced in the court on 11th May, 2026 at Chennai. Sd/- Sd/- (एस. आर. रघुनाथा) (एबी टी वर्की ) (S.R.RAGHUNATHA) (ABY T VARKEY) लेखासदस्य/Accountant Member न्याययर्क सदस्य/Judicial Member चेन्नई/Chennai, ददनांक/Dated, the 11th May, 2026 JPV आदेश की प्रतिलिपि अग्रेपिि/Copy to: 1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. ववभागीय प्रनतननधि/DR 5. गार्ा फाईल/GF

DEVADAS Digitally signed by DEVADAS GOPALAN GOPALANACHARY Date: 2026.05.13 ACHARY 17:00:35 +05'30'

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