SRI KUMARAN TRADERS,TRICHY vs. ITO WARD 1(1), TRICHY, TRICHY

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ITA 229/CHNY/2026Status: DisposedITAT Chennai03 June 2026AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and set aside the CIT(A)'s order, remitting the matter back to the CIT(A) for fresh adjudication on merits. A cost of Rs. 50,000/- was levied on the assessee for negligence.

What were the facts?

The assessee, a partnership firm, had unexplained cash deposits of Rs. 44,78,500/- during demonetization and unaccounted purchases of Rs. 14,42,377/-. The Assessing Officer made additions under Sections 68 and 69C, which were confirmed by the CIT(A) due to the assessee's non-participation.

What were the issues?

Whether the CIT(A) order passed without assessee's participation should be set aside, and if the delay in filing the appeal can be condoned.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA

Hearing: 28.04.2026Pronounced: 03.06.2026

आयकर अपीलीय अधिकरण, ‘सी’ न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI श्री एस एस विश्वनेत्र रवि, न्याविक सदस्य एिं श्री एस. आर. रघुनाथा, लेखा सदस्य के समक्ष BEFORE SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं/.ITA No.229/Chny/2026 ननिाारण वर्ा / Assessment Year: 2017-18 Sri Kumaran Traders, The Income Tax Officer, No.120, Melavadugapatti vs. Ward-1(1), Collages Road, Musiri, Trichy. Trichy – 621 211. [PAN: ACRFS-4471-Q] (प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/Appellant by : Mr. TS Lakshmi Venkataraman, CA (Virtual) प्रत्यर्थी की ओर से/Respondent by : Ms. R. Anitha, Addl. CIT सुनवाई की तारीख/Date of Hearing : 28.04.2026 घोर्णा की तारीख/Date of Pronouncement : 03.06.2026 आदेश/ O R D E R PER S. R. RAGHUNATHA, AM : This appeal by the assessee is arising out of the order dated 17.10.2023, passed by the Learned Commissioner of Income Tax (Appeal), NFAC, Delhi (in short “ld.CIT(A)”) for the assessment year (A.Y) 2017-18 against the reassessment order u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the AO, dated 19.09.2019.

2.

At the threshold, we observe that there is a delay of 751 days in the filing of the present appeal by the assessee. The assessee has furnished an affidavit explaining that the assessee was not aware of the hearing notices issued by the

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first appellate authority during appellate proceedings due to the notices being served to e-mail ID of Mr. Dinesh, Chartered Accountant, and he did not inform the assessee due to change of Auditor. Mr.Veeramani, Tax Consultant who took over the case from Auditor, also failed to inform the assessee about the issue due to lack of professional knowledge in the appeal proceedings of the Income Tax. The assessee became aware of the impugned order passed by the first appellate authority only after receiving the receipt of letter from income tax department for recovery proceedings. Later, the assessee approached Mr.T.S.Lakshmi Venkataraman, CA to care for the issue and he immediately filed the appeal on 20.01.2026. Upon perusal of the affidavit and after affording due opportunity of hearing from both parties, we are satisfied that the assessee has demonstrated sufficient and reasonable cause for not presenting the appeal within the statutory period prescribed under law. Accordingly, in the interest of justice, the delay in filing the appeal is hereby condoned, and the appeal is admitted for adjudication on merits.

3.

Brief facts of the case are that the assessee is a partnership firm, engaged in the business of buying different brands packed oil from manufacturers and selling to retail shops on wholesale basis and has filed its return of income on 28.12.2017 for AY 2017-18, admitting total income of Rs.84,300/-. The case was selected for scrutiny, accordingly statutory notices issued to the assessee and by calling for details. In response, the assessee furnished the reply along with its supporting documents for verification. On perusal of the statement of bank accounts and cash book submitted by the assessee, the AO found that the assessee has made cash deposits to the tune of Rs.44,78,500/- during the demonetization period and cash deposits to the extent of Rs.21,42,500/- stands unexplained. Subsequently, on verification of purchase ledger, the AO found that the unaccounted purchases to the extent of Rs.14,42,377/-(GP ratio at 13.22%) was assessed as unexplained expenditure. Since the assessee failed to furnish valid explanation with supporting evidence, the AO completed the assessment by passing an order u/s.143(3) of the Act dated 19.09.2019 by making additions of Rs.21,42,500/- as unexplained cash credits u/s.68 of the Act and amount of

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Rs.14,42,377/- as unexplained expenditure u/s.69C of the Act and by arriving total income of Rs.36,60,955/-.

4.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 24.01.2020.

5.

At the outset, we observed that ld.CIT(A) has provided three opportunities to the assessee to appear for hearings as detailed in paragraph 5.2 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A), NFAC dismissed the appeal filed by the assessee by confirming the order of the AO by passing an order dated 17.10.2023. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.

6.

The ld.AR submitted that the ld.CIT(A) has passed order by dismissing the appeal of the assessee without participation of the assessee in the appellate proceedings. The Assessing Officer also has passed the assessment order without consideration of the documents filed by the assessee. In view of the above, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively.

7.

Per contra, the ld.DR submitted that the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

8.

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 order by considering the submission made by the assessee and the information available with the department and the same has been confirmed by the ld.CIT(A), NFAC due to non-participation of the assessee. Since the assessee

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has failed to participate both before the Assessing Officer as well as the ld.CIT(A) and also delay of 751 days in filing the appeal before us, we levy the cost of Rs.50,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the assessee shall satisfy the payment of cost before the authorities.

Therefore, in the present facts and circumstances of the case and to meet 9. the ends of justice, we are deeming it fit to provide one more opportunity to the assessee and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh on merits in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.

10.

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

Order pronounced in the open court on 03rd June, 2026 at Chennai.

Sd/- Sd/- (एस एस विश्वनेत्र रवि) (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) (S.S. VISWANETHRA RAVI) लेखा सदस्य/Accountant Member न्याविक सदस्य/Judicial Member

चेन्नई/Chennai, वदनांक/Dated, the 03rd June, 2026 Devadas आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. ववभागीय प्रनतननधि/DR 5. गार्ा फाईल/GF

DEVADAS Digitally signed by DEVADAS GOPALANACHARY GOPALANACHARY Date: 2026.06.08 16:50:58 +05'30'

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