KRISHNASAMY ANANDARAMAN,COIMBATORE vs. ITO, WARD 1(1), SALEM

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ITA 177/CHNY/2026Status: DisposedITAT Chennai03 June 2026AY 2022-234 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found a violation of natural justice as the AO could have elicited further details instead of drawing an adverse inference. The CIT(A)'s order was also considered non-speaking.

What were the facts?

The assessee declared income and was selected for scrutiny. The Assessing Officer (AO) made an addition of Rs. 26,50,000/- on account of an unsecured loan, finding the assessee's explanation insufficient. The CIT(A) upheld the AO's order ex parte.

What were the issues?

Whether the AO erred in making an addition without providing sufficient opportunity to the assessee and whether the CIT(A) passed a non-speaking order.

Which sections of the Income-tax Act were involved?

Section 69A,Section 139(1)

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: 21.04.2026Pronounced: 03.06.2026

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 ‘Ld.CIT(A)’), Delhi, dated 28.11.2025 for the Assessment Year (hereinafter referred to as ‘AY’) 2022-23.

2.

At the outset, the Ld.AR of the assessee drawing our attention to the Para 8 of the impugned order of the Ld.CIT(A) submitted that the

ITA No. 177 /Chny/2026 (AY 2022-23) Krishnasamy Anandaraman :: 2 :: Ld.CIT(A) has passed a cryptic ex parte order and hence there is a violation of natural justice and prayed for setting aside the impugned order of the Ld.CIT(A). The Ld.AR also brought to our notice that the AO saddled an addition of Rs.26,50,000/- based on assumptions without confronting the assessee and that if he had any doubt about the explanation given by the assessee vide reply dated 04.02.2024, he ought to have given a chance to explain, which he didn’t. Hence, the Ld AR prayed for one more opportunity before the AO because assessee didn’t get proper opportunity during the assessment proceedings and relied on the decision of Hon’ble Supreme Court in the case of Tin Box Company vs. Commissioner of Income-Tax, reported in [2001] 249 ITR 216.

3.

Per contra, the Ld.DR doesn’t want us to give one more innings to the assessee.

4.

Heard both the parties and perused the records. Assessee has filed ITR u/s.139(1) on 29.03.2023 declaring total income of Rs.5,00,390/-, which was selected for scrutiny. The AO asked the assessee to prove the nature and source of the funds which he received to the tune of Rs.41,16,886/- and in response assessee submitted that Rs.26,50,000/- was unsecured loan and Rs.14,66,886/- had been obtained through policy loans. The AO is noted to have accepted the explanation regarding the sums received to the tune of Rs.14,66,886/-; and hence asked the

ITA No. 177 /Chny/2026 (AY 2022-23) Krishnasamy Anandaraman :: 3 :: assessee to substantiate the identity, creditworthiness and genuineness of the unsecured loan received to the tune of Rs.26,50,000/-. The assessee is noted to have filed a reply dated 04.03.2024 without clearly spelling out the details called for by the AO because of which the AO drew adverse inference against the assessee and made the addition of Rs.26,50,000/- u/s.69A of the Act. On appeal the Ld.CIT(A) has recorded a finding of fact that “the appellant has failed to prosecute the appeal and has not responded to multiple hearing of notices. The maxim vigilantibus non dormientibus jura subveniunt applies squarely.” Thereafter, he passed a cryptic order reiterating the action of the AO. The assessee is before us aggrieved by the non-speaking order passed by the Ld.CIT(A) as well as against the action of the AO making addition without properly hearing the assessee by citing the decision of the Hon’ble Supreme Court in the case of Tin Box Company (supra). We find that the assessee had replied to the AO on three (3) occasions and the AO has reproduced the same in the assessment order. However, we find that the AO has drawn adverse inference against the assessee, since he asked for certain specific details which assessee didn’t give/explain, which led to the passing of the assessment order making addition of Rs.26,50,000/-. Considering the overall facts of the case, we find that the AO could have elicited further details from the assessee rather than drawing adverse inference against the assessee when there was time left for framing assessment. Hence, we

ITA No. 177 /Chny/2026 (AY 2022-23) Krishnasamy Anandaraman :: 4 :: find that there was violation of natural justice and hence in the peculiar facts of the case, we are inclined to set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO for de nova assessment. The assessee is directed to file the details of the persons from whom assessee has availed unsecured loan and prove the identity, creditworthiness and genuineness of the creditors in accordance to law. The AO to frame assessment in accordance to law after hearing the assessee.

5.

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

Order pronounced on the 03rd day of June, 2026, in Chennai.

Sd/- Sd/- (इंटूरी रामा राव) (एबी टी. वक�) (INTURI RAMA RAO) (ABY T. VARKEY) लेखा सद�/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 03rd June, 2026. YS 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 YASHVI Digitally signed by YASHVIR SINGH R SINGH Date: 2026.06.20 15:59:54 +05'30'

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