TAMILSELVAN,VIRUDHUNAGAR vs. ITO, WARD-3,, VIRUDHUNAGAR

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ITA 663/CHNY/2026Status: DisposedITAT Chennai13 May 2026AY 2018-193 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee did not properly respond to notices or provide evidence for the cash deposits. However, considering the peculiar facts, the Tribunal decided to give the assessee one more opportunity to present their case properly.

What were the facts?

The assessee, an individual, did not file an income tax return but deposited a significant amount of cash. Upon reopening of assessment, the assessee filed a return, but failed to provide details for the cash deposits. The Assessing Officer estimated income at 8% of total credits under Section 44AD.

What were the issues?

Whether the income estimation by the AO was justified given the lack of evidence from the assessee, and whether the assessee should be given another opportunity to present their case.

Which sections of the Income-tax Act were involved?

Section 44AD,Section 148,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & MS. PADMAVATHY.S

For Respondent: Mr. D.Balachandar, 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 20.01.2026 for Assessment Year (AY) 2018-19.

2.

The assessee is an individual and did not file the return of income. The A.O noticed that the assessee has deposited cash to the tune of

ITA No.663/Chny/2026 Tamilselvan :- 2 -: Rs.1,11,43,014/- during the year under consideration. Since the assessee did not file the return of income, the A.O reopened the assessment by issue of notice u/s. 148 of the Act. The assessee in response to the notice filed the return of income on 22.06.2023 declaring a total income of Rs. 3,86,700/-. The A.O called on the assessee to furnish further details to which the assessee did not respond. The A.O completed the assessment wherein he made an addition by estimating the income of the assessee at 8% of the total credits u/s. 44AD of the Act. Aggrieved, the assessee filed further appeal before the CIT(A). The CIT(A) confirmed the income assessed by the A.O stating that the assessee neither produced books of accounts nor furnished any cogent evidence to explain the cash deposit inspite of providing multiple opportunities. The assessee is in appeal before the Tribunal against the order of the CIT(A).

3.

We have heard the parties, and perused the material available on record. The Ld. Authorized Representative (AR) of the assessee submitted that the income estimated at 8% of the total credits is not correct. The Ld. AR further submitted that in assessee's business the profit percentage is less than 1%. On perusal of the orders of the lower authorities, we notice that the income has been estimated at 8% for the reason that the assessee did not properly respond to the notices nor filed any evidences to substantiate the claim the cash deposit in the bank account is sourced from the cash sales of the assessee. Further, the contention of the assessee that the profit percentage in the line of business assessee is engaged in is less than 1% needs to the examined factually. 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. Accordingly, we remit the appeal back to the AO with the

ITA No.663/Chny/2026 Tamilselvan :- 3 -: direction to call for necessary details and decide the issue in accordance with law. The assessee is required to submit the necessary details as may be called for and cooperate with assessment proceedings. It is ordered accordingly.

4.

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/- (एबी टी. वक�) (पदमावती यस) (ABY. T. Varkey) (Padmavathy.S) लेखा लेखा सद�य लेखा लेखा सद�य सद�य /Accountant Member सद�य �याियक सद�य �याियक सद�य / Judicial Member �याियक �याियक सद�य 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: 2026.05.20 12:03:03 +05'30'

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