KARUNANITHI SENTHIL KUMAR,THANJAVUR vs. ITO, WARD-1,, KUMBAKONAM

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ITA 852/CHNY/2026Status: DisposedITAT Chennai05 May 2026AY 2020-214 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the CIT(A)'s order and remitted the matter back to the AO for de novo assessment. The assessee was directed to be diligent and provide necessary documents and submissions.

What were the facts?

The assessee, engaged in buying and selling old cars, failed to respond to notices from the AO and CIT(A) regarding cash deposits and business income. The AO passed an ex-parte reassessment order, which was confirmed by the CIT(A) due to the assessee's non-participation.

What were the issues?

Whether the ex-parte assessment and appellate orders passed due to the assessee's non-participation should be set aside to provide a reasonable opportunity for a fresh assessment.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148,Section 133(6),Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

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

Hearing: 16.04.2026Pronounced: 05.05.2026

आदेश / O R D E R PER S. R. RAGHUNATHA, AM:

This appeal by the assessee is arising out of the order dated 05.01.2026, passed by the Learned Commissioner of Income Tax (Appeal), NFAC, Delhi (in short “ld.CIT(A)”) for the assessment year (A.Y) 2020-21 against the reassessment order u/s.147 r.w.s 144B of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the AO, dated 04.02.2025.

2.

Brief facts of the case are that the assessee is an individual, engaged in the business of buying and selling old cars and has filed his return of income on 06.03.2021 for AY 2020-21, declaring a gross total income of Rs.5,62,183/-and total income of Rs.4,04,110/-. Based on the information available with the department, the AO found that the assessee has made cash deposits to the bank account of

2 ITA No.852/Chny/2026 Rs.59,29,171/- during the assessment year. Hence, the case was re-opened u/s.147 of the Act, accordingly, a notice u/s.148 of the Act issued to the assessee. In response, the assessee filed his return of income on 02.12.2024 for AY 2020-21, declaring total income of Rs.5,62,183/- but the same is not reflected in the income tax system. Further, the AO issued statutory notices to the assessee and by calling for details. The assessee chose to be silent and did not respond to any of the notices. In the meanwhile, the AO issued notices u/s.133(6) of the Act and obtained statement of accounts from the bank. On perusal of the documents received from the bank, the AO observed that total credit entries in the bank account to the tune of Rs.1,73,26,296/- including the total cash credits to the tune of Rs.56,98,171/- during the assessment year. Since, the assessee failed to respond the any of the notices, the AO completed the reassessment by passing an exparte order u/s.147 r.w.s 144B of the Act dated 04.02.2025 by making the addition to the tune of Rs.11,62,812/- as estimated income of 10% from business and cash deposit to bank account of Rs.56,98,171/- as unexplained money u/s.69A r.w.s 115BBE of the Act.

3.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 05.03.2025.

4.

At the outset, we observed that ld.CIT(A) has provided six opportunities to the assessee to appear for hearings as detailed in paragraph 6.0 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 05.01.2026. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.

5.

The ld.AR submitted that the assessee did not regularly check the email and income tax portal during the appellate proceedings, and hence, the assessee was not aware of the hearing notices issued passed by the ld.CIT(A). Hence, the assessee could not participate in the appellate proceedings. Further, the ld.AR also stated that the assessee could not submit the documentary evidence during the assessment proceedings also. In view of the above, the ld.AR prayed that the Tribunal may be

3 ITA No.852/Chny/2026 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.

6.

Per contra, the ld.DR submitted that both the AO and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

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 ex-parte order by considering 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.

8.

In view of the above and to meet the ends of justice we set aside the order of ld.CIT(A) and remit the matter back to the file of AO and direct the AO to denovo frame the assessment order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee to be diligent and file written submissions and relevant documents if advised so.

9.

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

Order pronounced in the open court on 05th May, 2026 at Chennai.

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

चेन्िई Chennai: दििधंक Dated : 05th May, 2026 *Devadas

4 ITA No.852/Chny/2026 आदेश की प्रतिलिपि अग्रेपिि/Copy to: 1. अपीलधर्थी/Appellant 2. प्रत्यर्थी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. ववभधगीय प्रनतनिधर्/DR 5. गधर्ा फधईल/GF DEVADAS Digitally signed by DEVADAS GOPALA GOPALANACHARY Date: 2026.05.11 NACHARY 15:05:53 +05'30'

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