PALANISAMY LOGANATHAN,KANCHIPURAM vs. ITO, INT. TAXN WARD-1(2), CHENNAI

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ITA 2069/CHNY/2026Status: DisposedITAT Chennai25 August 2026AY 2016-177 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in not adjudicating the jurisdictional grounds and instead remitted the matter. However, the Tribunal dismissed the jurisdictional ground based on a High Court decision. On merits, the Tribunal found no illegality in the CIT(A)'s order to remit the matter for denovo assessment.

What were the facts?

The assessee did not file a return for AY 2016-17. The AO initiated reassessment proceedings and made an addition of Rs. 12 lakhs as unexplained money. The CIT(A) set aside the assessment to the AO for verification of cash deposit sources.

What were the issues?

Whether the CIT(A) erred in setting aside the assessment without adjudicating jurisdictional grounds and whether the addition under Section 69 was justified.

Which sections of the Income-tax Act were involved?

Section 148,Section 142(1),Section 147,Section 144B,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES,

Before: SHRI INTURI RAMA RAO & SHRI SS VISWANETHRA RAVI

Pronounced: 25.08.2026

PER INTURI RAMA RAO, ACCOUNTANT MEMBER :

This is an appeal filed by the Assessee directed against the order passed by learned Commissioner of Income Tax(Appeal), Chennai-16 dated 24.02.2026 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2016-17. 1

2.

The Assessee raised the following grounds of appeal : “1) The Impugned Order is unjust, unreasonable and bad in law.

2) The Learned Commissioner (Appeals) erred in not considering the submissions filed by the Appellant and the legal issues raised, thereby causing prejudice.

3) Without prejudice, the Learned Commissioner (Appeals) also erred in not following binding orders of Hon'ble Karnataka High Court and Chennai ITAT on the principle that SCN under Section 148A(b) should afford time of seven clear days to respond.

4) Without prejudice, the Learned Commissioner (Appeals) also erred in placing reliance on a decision of Hon'ble Madras High Court and in rejecting the legal issue raised by the Appellant without considering:

a) That the Hon'ble High Court itself acknowledged that seven days' time ought to be given in Show Cause Notice under Section 148A(b);

b) That in that case, as Reassessment Proceeding did not conclude, the Hon'ble High Court remitted the matter back to the Assessing Officer to issue another Show Cause Notice under Section 148A(b), acknowledging that reassessment proceeding cannot be founded on an SCN giving time of less than seven days to the Assessee;

c) That in that case, the Hon'ble High Court, being a Constitutional Court and Court of Record, in exercise of powers under Article 226 of the Constitution of India, had remitted the matter back, which cannot be applied to the instant case.

5) Without prejudice, the Learned Commissioner (Appeals) also erred in not deciding the appeal based on documents filed before the Assessing Officer and during appeal, which form part of record and in directing verification by the Assessing Officer, when the Impugned Order was not one under Section 144, but under Section 143(3).

6) Without prejudice, the Learned Commissioner (Appeals) also erred in not deleting the addition made under Section 69 without considering that the Appellant explained the source of Cash Deposits with PAN and Confirmation Letters, ITR Acknowledgments of his father and mother, which were not considered by the Assessing Officer properly.

7) Without prejudice, the Learned Commissioner (Appeals) also erred in not considering that the Appellant discharged his onus by proving identity, genuineness and also credit worthiness of his mother and father, which was rejected without reason and not rebutted, without which invocation of Section 69 is unjustifiable and unsustainable.

And, for other grounds and reasons that may be adduced later, the Appellant humbly prays that the present appeal may be admitted, duly considered and justice be 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 of the Income Tax Act, 1961 was filed by the appellant for the Assessment Year 2016-17. However, based on the information that the appellant was in receipt of income under head “Salaries” from Tata Consultancy Services purchased immovable property and made cash deposits of Rs.10 lakhs in the bank account, the Juri ictional Assessing Officer formed an opinion that income got escaped assessment from tax, accordingly, a notice u/s.148 of the Act was issued on 30.03.2023 calling upon the appellant to file the return of income. The appellant neither complied with the notice u/s.148 of the Act, nor the notice u/s.142(1) of the Act. In the circumstances, e-Assessment Unit of the Department (hereinafter called ÁO’) had proceeded with making best judgment assessment vide order dated 13.03.2024 passed u/s.147 r.w.s 144B of the Income Tax Act, 1961 at a total income of Rs.35,43,120/-. While doing so, the Assessing Officer made addition of Rs.12 lakhs as unexplained money of the appellant for the failure of the appellant to offer any explanation.

4.

Being aggrieved by the assessment order, the appellant filed an appeal before the Learned CIT(A), who vide impugned order considering the explanation offered before him had set- aside the assessment to the file of Assessing Officer for due verification of the source of the cash deposits as explained by the appellant before him. Thus, the appeal filed by the assessee stands partly allowed by the Learned CIT(A).

5.

Being aggrieved by the order of the Learned CIT(A), appellant preferred an appeal before the Tribunal. The Learned Counsel submits that the Learned CIT(A) without adjudicating the juri ictional grounds set-aside the assessment to the file of Assessing Officer, thus, he prayed that the matter may be restored to the file of the learned CIT(A) to decide the juri ictional ground raised before him. However, we find that this ground was specifically rejected by the Learned CIT(A) in para 5.2 placing reliance on the decision of Hon’ble Madras High Court in the case of G.Rav9isanbkar Vs. ITO [2022] 142 taxmann.COM 475 (Madras) and therefore, this ground of appeal is dismissed.

6.

On merits, the Learned CIT(A) considering the explanation offered before him as to the source of the cash deposits remitted the matter back to the file of Assessing Officer for denovo assessment. Therefore, we do not find any illegality or perversity in the order of Learned CIT(A), accordingly, grounds of appeal raised by the assessee are dismissed.

7.

In the result, appeal filed by the Assessee stands dismissed. Order pronounced in the open Court on 25th August, 2026. (SS VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai; िदनांक / Dated : 25th Aug, 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, “सी” ब"च, चे"नई / DR, ITAT Chennai. गाड" फ़ाइल / Guard File.

5.

GANGADHARA RAO SALEELA Date: 2026.09.01 17:41:00 +05'30'

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