M KRISHNAMURTHY RAJU,CHENNAI vs. ADDL./J, CHENNAI

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ITA 168/CHNY/2026Status: DisposedITAT Chennai22 June 2026AY 2013-144 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee did not receive a proper opportunity to present their case before the AO due to circumstances including the pandemic and email delivery issues. Therefore, the assessment order was set aside.

What were the facts?

The assessee's assessment was reopened during the COVID-19 pandemic, and the Assessing Officer (AO) made an addition of Rs. 22,80,990/- under Section 69A without providing a proper opportunity for the assessee to be heard. Notices from the AO were reportedly delivered to the assessee's spam email folder.

What were the issues?

Whether the assessee was denied a proper opportunity of being heard during the assessment proceedings, leading to an invalid assessment order.

Which sections of the Income-tax Act were involved?

Section 69A,Section 148,Section 144

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: 22.06.2026

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 06.11.2025 for the Assessment Year (hereinafter referred to as ‘AY’) 2013-14. 2. At the outset, the Ld.AR of the assessee submitted that the Ld.CIT(A) erred in passing the impugned order without giving sufficient opportunity to the assessee to explain the nature and source of Rs.22,80,990/- added by the AO u/s.69A of the Income-tax Act, 1961

ITA No. 168 /Chny/2026 (AY 2013-14) M. Krishnamurthy Raju :: 2 :: (hereinafter referred to as ‘the Act’). Further, according to the Ld.AR the AO had issued notice u/s.148 of the Act on 26.03.2021 (in the midst of COVID 19 Pandemic) and had framed the assessment without hearing the assessee and made an addition of Rs.22,80,990/- u/s.69A of the Act. Relying on the decision of the Hon’ble Supreme Court in the case of Tin Box Co. vs. CIT, reported in [2001] 249 ITR 216, he pleaded for one more opportunity before the AO.

3.

Per contra, the Ld.DR submitted that assessee did not appear even once before the AO hence, he should not be given one more innings.

4.

Heard both the parties. On perusal of the records, it is noted that assessee has filed his return of income on 31.10.2013 for AY 2013-14 declaring total income of Rs.13,85,420/-. The AO is noted to have reopened the assessment by issuing notice u/s.148 on 26.03.2021 (in the midst of COVID 19) and finding no response from the assessee is noted to have framed the assessment u/s.144 (“best judgment assessment”) and finding credit entries including cash deposit appearing in the bank account statement of the assessee amounting to Rs.22,80,990/- added the same u/s.69A of the Act by passing the assessment order on 29.03.2022. On appeal the Ld.CIT(A) has confirmed the action of the AO.

5.

The main grievance as highlighted by the Ld.AR of the assessee is that assessee was in the dark while the assessment proceedings were going on against him, which assertion of the assessee is found to be plausible since it has been brought to our notice that the notices issued by the AO in the e-mail ID of the assessee happened to get delivered in the spam account rather than in the registered e-mail of the assessee. It is common knowledge that due to glitches in the system, possibility of email going to the spam account cannot be ruled out. The assessee does

ITA No. 168 /Chny/2026 (AY 2013-14) M. Krishnamurthy Raju :: 3 :: not gain by not participating during the assessment proceedings. Considering the fact that the assessment proceedings were carried out in the midst of COVID pandemic and the other reason noted (supra), we are of the view that assessee didn’t get proper opportunity before AO, hence we are of the view that assessee be given an opportunity to explain the nature and source of the credit entries including the cash deposits appearing in the bank account statement of the assessee amounting to Rs.22,80,990/-. For taking such an action, we rely on the decision of Hon’ble Supreme Court in the case of Tin Box Co. (supra) wherein the Hon’ble Supreme Court held as under : -

“ORDER 1. It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus: "We will straightaway agree with the assessee's submission that the Income-tax Officer had not given to the assessee proper opportunity of being heard." 2. That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of selling out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard. 3. Two questions were placed before the High Court, of which the second question is not pressed. The first question reads thus: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Income-tax Officer had not given a proper opportunity of hearing to the assessee ?" 4. In our opinion, there can only be one answer to this question which is inherent in the question itself: in the negative and in favour of the asses- see. 5. The appeals are allowed. The order under challenge is set aside. The assessment order, that of the Commissioner (Appeals) and of the Tribunal

ITA No. 168 /Chny/2026 (AY 2013-14) M. Krishnamurthy Raju :: 4 :: are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as aforestated. No order as to costs.” Respectfully, following the ratio of the decision of Hon’ble Supreme Court in Tin Box supra, in the light of the reasons stated above, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of AO for de nova assessment. Assessee is directed to file all the relevant documents to substantiate the nature and source of the Rs.22,80,990/- and the AO to frame assessment in accordance to law after hearing the assessee. 6. In the result, the appeal filed by the assessee is allowed for statistical proposes. Order pronounced on the 22nd 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: 22nd 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

Digitally signed YASHVI by YASHVIR SINGH R SINGH Date: 2026.07.07 12:51:41 +05'30'

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