ALAGESAN SHANTHI,ATTUR vs. ITO, WARD-1(6), SALEM

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ITA 1963/CHNY/2026Status: DisposedITAT Chennai30 June 2026AY 2017-187 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) was not justified in refusing to condone the delay, citing a High Court judgment that allows invoking appellate jurisdiction even after availing revisional jurisdiction. The Tribunal directed the CIT(A) to condone the delay and decide the appeal on merits.

What were the facts?

The assessee filed an appeal before the CIT(A) with a significant delay of 502 days. The delay was attributed to the pendency of a revision petition filed under section 264 of the Income Tax Act. The CIT(A) refused to condone the delay, dismissing the appeal in limine.

What were the issues?

Whether the CIT(A) was justified in refusing to condone the delay in filing the appeal, and whether availing revisional jurisdiction bars the assessee from filing an appeal.

Which sections of the Income-tax Act were involved?

Section 264,Section 250,Section 147,Section 144,Section 144B,Section 139(1),Section 148,Section 142(1),Section 151,Section 115BBE,Section 246

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI

Before: SHRI INTURI RAMA RAO & SHRI S.S.VISWANETHRA RAVI

Pronounced: 30.06.2026

आयकर अपील�य अ�धकरण, चे�नई पीठ�, चे�नई INCOME TAX APPELLATE TRIBUNAL, CHENNAI BENCHES, CHENNAI BENCH: A BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA No.1963/CHNY/2026 िनधा�रण वष�/Assessment Year: 2017-18) ALAGESAN SHANTHI ITO, WARD-1(6) 237, THERKKUKADU, PUDUPET, - ATTUR, SALEM-636141, TAMIL SALEM-636007, TAMIL NADU Vs. NADU अपीलाथ� Appellant ��थ� Respondent

Permanent Account Number of Assessee: BKLPS1431H

अपीलाथ� �ारा/Appellant represented by: Mr.T.S.Lakshmi Venkataraman, F.C.A. ��थ� �ारा/Respondent represented by: Ms.R.Anita, CIT सुनवाई की तारीख / Date of conclusion of hearing: 16.06.2026 घोषणा की तारीख / Date of pronouncement: 30.06.2026 आदेश / ORDER PER INTURI RAMA RAO, ACCOUNTANT MEMBER: This appeal filed by the Assessee directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], dated 27.02.2026 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2017-18.

2.

The Assessee raised the following grounds of appeal :

“1. On the facts and circumstances of the case the order of first appellate authority dated 27.02.2026 in dismissing the appeal of the appellant is bad in law and is not legally justified. 2. On the facts and circumstances of the case, the first appellate authority is not justified in not condoning the delay in filing the appeal which is due to pendency of revision proceedings under section 264 of the Act before the PCIT-1, Coimbatore. 3. On the facts and circumstances of the case, the first appellate authority is not justified in sustaining the order of the Ld Assessing officer, where the reasons recorded for issuance of Notice u/s 148 of the Act has to be verified whether the same provide scope of initiation of proceedings u/s 148 of the Act. 4. On the facts and circumstances of the case, the first appellate authority is not justified in sustaining the order of the Ld Assessing officer, where the satisfaction note in terms of section 151 has to be verified whether due application of mind applied by the competent authority before giving such approval. Satisfaction note on mechanical manner is fatal to assessment and bad in law. 5. On the facts and circumstances of the case, the first appellate authority is not justified in sustaining the order of the Ld Assessing officer, where the actual cash deposits made during the F.Y.2016-17 is only Rs.2,75,68,700/- and not Rs.6,05,07,900/- taken by the AO in framing the assessment. 6. On the facts and circumstances of the case, the first appellate authority is not justified in sustaining the order of the Ld Assessing officer, where the assesse is into sago business and there is routine withdrawal of cash from the bank to make payments to agriculturalist for purchase of tapioca roots. Any surplus cash on hand is subsequently deposited into the bank account. Almost there is corresponding cash withdrawals to match the deposits in the bank account. 7. On the facts and circumstances of the case, the first appellate authority is not justified in sustaining the order of the Ld Assessing officer, where the assessee in order to maintain the bank requirements and also to maintain the loan limit frequent withdrawals and deposits were made in the bank account. The Learned AO in all fairness should have applied the "Peak Credit Concept" in framing the assessment instead of assessing the entire cash deposits as income. 8. On the facts and circumstances of the case, the lower authorities are not justified in invoking the provisions of section 115BBE of the Act for the A.Y.2017-18 when the above section came into operation from 01.04.2017 and it is not applicable for the above A.Y. In this connection following case laws are relied upon, a. Decision of Hon'ble Madras High Court in the case of S.M.I.L.E Microfinance Limited Vs. ACIT in W.P NO. 2078 of 2020 and 1742 of 2020 by order dated 19.11.2024. b. Decision of ITAT Delhi Bench in the case of DCIT, Circle 19(1), Delhi Vs. Rai Bhadur Narainsingh Sugar Mills Limited in ITA No.3027/DEL/2024 reported in 213 ITD 222. c. Decision of ITAT Chennai Bench in the case of Comal Ramachandran Gayathri Vs. DCIT, Non-Corporate Circle 10(1), Chennai in ITA No: 1268/CHNY/2025. d. Decision of Hon'ble Apex Court in the case of Karimtharuvi Tea Estate Limited Vs. State of Kerala reported in 60 ITR 262 (SC) wherein it has been held that any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force. 9. The assessment has been completed u/s 144 of the Act by order dated 19.03.2022. First appeal has been dismissed in limine for non-condonation of delay. In view of the above facts appeal filing fee of Rs.500 is paid. In connection with the payment of the above filing fee, reliance is placed on the order of ITAT Chennai, 'B' Bench, in the case of Aasife Biriyani Private Limited vs. ITO in ITA No. 2460/Chny/2024 by order dated 10.12.2024. 10. In view of the above grounds and other submissions to be made at the time of Appeal hearing, the order U/S 250 passed by Commissioner of Income Tax (Appeals), NFACmay be cancelled and justice rendered.”

3.

Briefly, the facts of the case are that the appellant is an Individual. No regular Return of Income under the provisions of section 139(1) of the Income Tax Act, 1961 was filed for the Assessment Year 2019-20. However, based on the information that the appellant made cash deposit of Rs.6,05,047,900/- in the bank account. The Jurisdictional Assessing Officer formed an opinion that the income got escaped assessment from tax, accordingly, a notice u/s.148 of the Act was issued on 30.03.2021. The appellant neither complied with notice u/s.148 of the Act, nor notices u/s.142(1) of the Act. In the circumstances, the National Faceless Assessment Centre (hereinafter called ‘AO’) had proceeded with framing the best judgment assessment vide order dated 19.03.2022 passed u/s.147 r.w.s 144 read with section 144B of the Income Tax Act, 1961 at a total income of Rs.6,05,07,900/-. While doing so, the Assessing Officer made addition of cash deposit in the bank account treating cash deposits in the bank account as unexplained money of the appellant for the failure of the appellant to discharge the onus of proving the source of cash deposits.

4.

Being aggrieved by the above assessment order, the appellant preferred an appeal before ld.CIT(A), with a delay of 502 days before the ld.CIT(A) who had refused to condone the delay and dismissed the appeal in limine on the grounds of delay.

5.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal. The learned Counsel submits that having regard to the explanation filed before the ld.CIT(A) explaining reasons for the delay in filing of appeal, the ld.CIT(A) ought to have condoned the delay.

6.

On the other hand, learned CIT-DR had vehemently opposed the above submissions submits that having regard to the provisions of sub-section 4 of section 264, the ld.CIT(A) had rightly refused to condone the delay.

7.

We heard rival submissions and perused the material available on record. The solitary issue that arises for our consideration is whether ld.CIT(A) was justified in refusing to condone the delay of 502 days in filing of appeal before him. Admittedly, there is a delay 502 days in filing of appeal before ld.CIT(A). The appellant had filed a petition seeking to condonation of delay by stating that the delay had occurred on account of the fact that the appellant had preferred revision petition u/s.264 before Pr.CIT, Coimbatore against the assessment order passed u/s.147 r.w.s 144 read with section 144B of the Act. The revision petition came to be rejected vide order dated 17.08.2023. The appeal before the ld.CIT(A) was filed on 05.09.2023 resulting in a delay of 502 days. It is submitted that the appellant was under the bonafide impression that the revision petition before ld.CIT(A) u/s.264 of the Act would be allowed, since the appellant was pursuing the alternative remedy, the delay should be condoned. We had carefully perused the explanation filed before the ld.CIT(A) explaining the reasons for delay in presenting the appeal before the ld.CIT(A). Thus, the ld.CIT(A) had refused to condone the delay placing reliance on the provisions of sub-section 4 of section 264 of the Income Tax Act, 1961 providing in the waiver of the right of the appeal before the ld.CIT(A) for availing remedy of revision u/s.264 of the Income Tax Act, 1961. The reasoning of the ld.CIT(A) was reversed by the Hon’ble Jurisdiction High Court in the case of CIT Vs. D.Lakshmi Narayana 250 ITR 187 wherein the Hon’ble High Court considering the provisions of section 264 of the Act and the provisions of section 246 held that in the absence of provisions in the Act dealing with the appellate authorities barring appellant from invoking appellate jurisdiction, if he had invoked revisional jurisdiction. Although, it is a precondition for invoking revisional jurisdiction that the appellate jurisdiction should have been invoked. The relevant paragraph of the judgment is as under :

“The argument advanced before us is that by inferential reasoning we D should hold that if there is a limitation on exercise of revisional power a similar limitation should be read into the exercise of the appellate power. It does not require any authority to hold that it is not the province of the court to rewrite the law on the ground that the provision should have been worded in a different manner in order to make it seemingly con-sistent with some other provision.

Moreover, it is wholly unnecessary for Parliament to impose the same kind of restriction for invoking different kinds of jurisdiction. It is open to the law-maker to provide more than one remedy to the aggrieved party and so long as such remedies are available, the aggrieved parties can certainly invoke them.”

8.

In view of the above binding judgment of Hon’ble High Court of Madras, the reasoning of the ld.CIT(A) cannot be sustained, therefore, we direct the ld.CIT(A) to condone the delay and decide the issue in appeal on merits after affording an opportunity of being heard to the appellant.

9.

In the result, appeal filed by the assessee stands partly allowed for statistical purpose. Order pronounced in the open Court on 30th June, 2026.

Sd/- Sd/- (SS VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai; िदनांक / Dated : 30th June, 2026 SGR, Sr.PS आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT Chennai/Madurai/Coimbatore/Salem. 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, चे�नई / DR, ITAT Chennai. गाड� फ़ाइल / Guard File. 5. GANGADHARA Digitally signed by GANGADHARA RAO SALEELA RAO SALEELA Date: 2026.07.03 18:11:15 +05'30'

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