SHRI RANGAIYA GOWDER SHANMUGASUNDARAM,COIMBATORE vs. DCIT, CIRCLE-1,, OOTY

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ITA 1228/CHNY/2026Status: DisposedITAT Chennai13 May 2026AY 2014-155 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing the appeal and, considering the peculiar circumstances and the conflicting statements, remitted the matter back to the CIT(A) for a fresh examination of evidence. The assessee was directed to provide proper documentary evidence and cooperate with the proceedings.

What were the facts?

The Assessing Officer treated an unexplained increase in the assessee's capital account of Rs. 1,62,00,000/- as income under Section 68. The assessee's appeal before the CIT(A) was dismissed as the person who allegedly provided the advance payment later stated the document was forged.

What were the issues?

Whether the addition made by the AO under Section 68 for unexplained capital was justified, and whether the assessee deserved another opportunity to present their case before the CIT(A) due to circumstances beyond their control.

Which sections of the Income-tax Act were involved?

Section 68,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

Before: MS. PADMAVATHY.S & SHRI MANU KUMAR GIRISHRI RANGAIYA GOWDER

For Respondent: Mr. Gautam S.Mukundan, JCIT

आदेश / O R D E R

PER PADMAVATHY.S, A.M:

This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 31.12.2022 for Assessment Year (AY) 2014-15.

ITA No.1228/Chny/2026 Shri Rangaiya Gowder Shanmugasundaram :- 2 -:

2.

The assessee is an individual and filed the return of income for AY 2014-15 on 27.03.2016 declaring a total income of Rs.13,18,850/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. The A.O noticed that the assessee is having a substantial increase in the capital account and called on the assessee to provide details with regard to the same. Since the assessee could not produce the details, the A.O treated the entire amount of Rs.1,62,00,000/- as an addition u/s. 68 of the Act. Aggrieved, the assessee filed further appeal before the CIT(A). The CIT(A) dismissed the appeal stating that:

“The assessee come in appeal against the order u/s 143(3) wherein he has submitted a copy of the above-mentioned Sale Agreement which was not produced earlier before the Assessing Officer. The Assessing Officer was asked to consider the fresh evidence submitted by the assessee and to submit a Remand Report in this regard... The AO has given the remand report that the assessee had previously claimed that Sh. A. Srinivasa Raghavan had given him an advance of Rs. 1,22,00,000/- for the purchase of agricultural land located at S. No: 554/1A 1B 1C, Thekkampatty Villages St. No.3, Mettupalayam. The copy retum of income of Sh. A. Srinivasa Raghavan is income in the case of Sh. A. Srinivasa Raghavan and the so-called sale agreement available on the record. Apparently, difference in signature made in the return of claimed to be made with him by the assessee, was noticed. Moreover, as per the Balance Sheet filed along with the return of income in the case of Sh. A. Srinivasa Raghavan the land advance paid by him during that year was Rs 1,00,00,000 and not Rs 1,22,00,000. Subsequently, summons u/s 131(1A) of the IT Act, 1961 was issued to Sh. A Srinivasa Raghavan. He appeared before AO on 26.09.2019 and a statement u/s 131 was recorded from. In the statement, he initially stated that he had paid Rs. 1,22,00,000/- as advance payment for the purchase of agricultural land owned by the assessee located at Thimmampalayam Village, Mettupalayam. On further perusal, it was seen that there is a difference between the signature done by Sh. A. Srinivasa Raghavan on his return of income and that on the sale agreement. When this difference was shown to him, he accepted that the signatures were different and he did not sign on the sale agreement presented by the assessee before the

ITA No.1228/Chny/2026 Shri Rangaiya Gowder Shanmugasundaram :- 3 -:

CIT(A). He also stated that he did not have any idea about the transaction and did not know the assessee beforehand. Only when the summons u/s 131(1A) was served on him, he came to know about the agreement. Sh. A. Srinivasa Raghavan finally concluded that somebody created forged document by using his name.”

The assessee is in appeal before the Tribunal against the order of the CIT(A).

3.

There is a delay of 1098 days in filing the appeal by the assessee. The assessee has filed condonation petition/affidavit stating the reasons for delay in filing the appeal. The assessee in the affidavit has stated that he is not qualified to understand online income tax proceedings and completely dependent on tax consultant who failed to participate the appellate proceedings. The assessee further states that only when the assessee received a call from the Department in the month of September, 2025 came to know that the appeal has been dismissed by the CIT(A). accordingly, the assessee submitted that the delay is beyond the control of the assessee and the reasons are bonafide. Having heard both the parties and perused the material on record, we are of the view that there is a reasonable and sufficient cause for the delay in filing the appeal before the Tribunal. Therefore following the Hon’ble Supreme Court decision in the case of Collector, Land Acquisition Vs. MST.Katiji & Ors., (167 ITR 471) (SC), we condone the delay in filing the appeal and admit the appeal for adjudication.

4.

We have heard the parties, and perused the material available on record. The Ld. Authorized Representative (AR) of the assessee submitted that the assessee is not aware of the income tax proceedings and completely relied on his counsel for handling the tax matters. The Ld. AR further

ITA No.1228/Chny/2026 Shri Rangaiya Gowder Shanmugasundaram :- 4 -:

submitted that the counsel of the assessee did not provide proper professional support and therefore the assessee did not represent the case properly before the CIT(A). The Ld. AR accordingly prayed for one more opportunity. Considering the facts and circumstances peculiar to assessee's case, we are inclined to give one more opportunity to the assessee in the interest of natural justice to represent the case properly by producing the required details. We notice from the perusal of the above findings of the CIT(A) that the person claimed to have made the advance payment to the assessee had subsequently changed his statement stating that the document produced by the assessee is forged. Accordingly, we remit the appeal back to the CIT(A) with a direction to examine the documentary evidence filed by the assessee afresh and call for any further details as may be required to decide the issue in accordance with law. The assessee is required to submit proper documentary evidence explaining the source for the increase in the capital and other details as may be called for and cooperate with appellate proceedings. It is ordered accordingly.

5.

Further, we also levy a cost of Rs.20,000/- (Twenty thousand only) in the appeal since considerable time and efforts have been spent by the Exchequer and for the reason that the assessee being delinquent before the lower authorities. The same shall be paid by the assessee to Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras within a period of one month from the date of receipt of this order and produce the receipt before the CIT(A).

ITA No.1228/Chny/2026 Shri Rangaiya Gowder Shanmugasundaram :- 5 -:

6.

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

Order pronounced on 13th day of May, 2026 at Chennai.

Sd/- Sd/- (मनु कुमार िग#र) (पदमावती यस) (Manu Kumar Giri) (Padmavathy.S) �याियक �याियक सद�य �याियक �याियक सद�य सद�य / Judicial Member सद�य लेखा लेखा सद�य लेखा लेखा सद�य सद�य /Accountant Member सद�य चे�नई/Chennai, �दनांक/Dated: 13th May, 2026. EDN, Sr. P.S आदेश क� �ितिल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकर आयु"/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF

Digitally signed by EJTADA DURGA EJTADA DURGA NARESH NARESH Date: 2026.06.01 12:06:20 +05'30'

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