N RAJAMONI,NAGERCOIL vs. INCOME TAX OFFICER , NAGERCOIL

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ITA 522/CHNY/2026Status: DisposedITAT Chennai04 June 20265 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, while deprecating the assessee's non-compliance, restored the matter to the AO for fresh adjudication as a last opportunity, subject to payment of costs.

What were the facts?

The assessee failed to respond to notices from the AO and FAA, leading to ex-parte best judgment assessments. The AO treated cash deposits into the assessee's bank account as unexplained money under Section 69A.

What were the issues?

Whether the cash deposits into the assessee's bank account were unexplained and could be treated as income, and if the assessee should be granted another opportunity to present their case.

Which sections of the Income-tax Act were involved?

Section 69A,Section 144,Section 144B,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI INTURI RAMA RAO

Hearing: 03.06.2026Pronounced: 04.06.2026

आदेश/ O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: These appeals filed by the assessee are directed against two orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 14.11.2025 & 18.11.2025 passed under section 250 of the Income Tax Act, 1961

:- 2 -: ITA No.522 & 553/CHNY/2026 N. Rajamoni (hereinafter called ‘the Act’). The relevant Assessment Years are 2018-19 & 2020-21.

2.

At the very outset, we notice that the orders of First Appellate Authority (FAA) are ex-parte, since there were no compliance from the assessee to the notices issued from the office of the First Appellate Authority. Further, we also note that the assessments have been completed on best judgment basis r.w.s.147 r.w.s. 144 r.w.s.144B of the Act

3.

The Ld. AR submitted that the assessee is engaged in bookkeeping, tax filing and GST compliance facilitation services, operating as a small-scale professional service provider. It was submitted that, in the course of such business, the assessee receives funds from clients for the purpose of making statutory payments such as GST, Income-tax and other government dues on their behalf. According to the Ld. AR, the customers used to hand over cash to the assessee, which was deposited into the assessee’s bank account and subsequently utilized for remittance of statutory liabilities. The Ld. AR further submitted that, during the course of assessment proceedings, the assessee had furnished before the AO copies of bank account statements, computation of income along with schedules, profit and

:- 3 -: ITA No.522 & 553/CHNY/2026 N. Rajamoni loss account with detailed schedules, balance sheet/statement of affairs along with supporting schedules and Form 26AS. In support of the said contention, the Ld. AR also furnished screenshots from the e- filing portal evidencing submission of such documents before the AO. However, it is observed that no satisfactory explanation was furnished before the AO regarding the specific source and nature of the cash deposits made into the bank account. Since the assessee did not properly respond to the notices issued during the assessment proceedings, the AO completed the assessment under best judgment by treating the cash deposits in the assessee’s bank account as unexplained money under section 69A of the Act. The Ld. AR, therefore, pleaded that one more opportunity may be granted to the assessee and that the matter may be restored to the file of the AO so as to enable the assessee to effectively substantiate the source of the cash deposits and present his case with supporting evidences.

4.

The Ld.DR submitted that adequate opportunities were provided from the offices of the FAA & AO and there is no violation of principles of natural justice. Therefore, it was submitted that the appeal of the assessee may be dismissed.

:- 4 -: ITA No.522 & 553/CHNY/2026 N. Rajamoni 5. We have heard the rival submissions and perused the material available on record. It is observed that the proceedings before the AO as well as the FAA were completed ex-parte, since the assessee failed to respond to the various notices issued by the offices of the AO and the FAA. Before us, the Ld. AR submitted that one more opportunity may be granted to the assessee to properly represent his case before the AO and undertook that the assessee would duly appear and furnish all necessary details and evidences as and when called for. At the outset, we strongly deprecate the nonchalant attitude of the assessee in not responding to the statutory notices issued by the AO and the FAA. Though the assessee claims to have filed certain documents before the AO through the e-portal, no satisfactory explanation with regard to the source of the cash deposits was furnished during the assessment proceedings. However, considering the submissions of the Ld. AR and in the interest of justice and fair play, we are of the considered view that the matter deserves to be restored to the file of the AO for fresh adjudication, as a last opportunity to the assessee, subject to payment of cost. Accordingly, the assessee is directed to pay a cost of Rs.5,000/- (Rupees Five Thousand only) each to the Tamil Nadu State Legal Services Authority at the Hon’ble High Court of Madras. The total amount of Rs.10,000/- shall be paid within one month from the date of receipt of this order and the assessee shall

:- 5 -: ITA No.522 & 553/CHNY/2026 N. Rajamoni produce proof of such payment before the AO. Accordingly, the matter is remitted to the files of the AO for fresh adjudication. The AO shall afford reasonable opportunity of hearing to the assessee. The assessee is directed to co-operate with the Revenue and furnish all requisite details and evidences in support of his claim and shall not seek unnecessary adjournment. It is ordered accordingly.

6.

In the result the appeals filed by the assessee are allowed for statistical purposes.

Order pronounced in the open court on 4th June, 2026 at Chennai.

Sd/- Sd/- (जॉज� जॉज� के) (इंटूर� रामा राव) (INTURI RAMA RAO) (GEORGE GEORGE K) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT चे�ई/Chennai, �दनांक/Dated, the 4th June, 2026 RSR, Sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त /CIT, Madurai 4. �वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF. By Order Digitally signed by REKHA REKHA SENTHIL RAJ SENTHIL RAJ Date: 2026.06.08 16:01:58 +05'30'

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