INCOME TAX OFFICER, WARD-1, DINDIGUL vs. KALAVATHY, PALANI

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ITA 1121/CHNY/2026Status: DisposedITAT Chennai04 August 20264 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(A) erred in admitting additional evidence without giving the Assessing Officer an opportunity to comment, violating Rule 46A. The Tribunal restored the matter to the AO for de-novo assessment.

What were the facts?

The Revenue appealed against the CIT(A)'s order deleting an addition of Rs. 1,22,36,000/- made on account of cash deposits. The assessee, claiming to be an agriculturist, had significant cash deposits which the CIT(A) explained by her past agricultural income.

What were the issues?

Whether the CIT(A) erred by admitting additional evidence without providing an opportunity to the AO, and whether the cash deposits were adequately explained by agricultural income.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144B,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

Before: HONOURABLE SHRI ABY T. VARKEY & SHRI GAGAN GOYAL

Hearing: 09.07.2026

आयकर अपीलीय अधिकरण ‘ए’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI माननीय श्री एबी टी. वर्की, न्याययक सदस्य एवं श्री गगन गोयल लेखा सदस्य के समक्ष BEFORE HONOURABLE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 1121/Chny/2026 ननिाारण वर्ा /Assessment Years: 2016-17 The Income Tax Officer, v. Kalavathy, Ward-1, No.1/54, Karadikootam, Dindigul. Pappampatti, Palani, Dindigul, Tamil Nadu-624 621. [PAN: DJAPK6465H] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. Shrenik Chordia, C.A, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Ms. Anshu Sharawat, Addl. CIT, Ld. DR सुनवाईकीतारीख/Date of Hearing : 09.07.2026 घोषणाकीतारीख /Date of Pronouncement : .08.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: This is an appeal preferred by the Revenue against the order of Ld. Commissioner of Income Tax (A) / NFAC, (hereinafter referred as the ‘Ld. CIT(A)’) dated 19.11.2025 for the Assessment Year (hereinafter referred as the ‘AY’) 2016- 17.

GROUDS OF APPEAL (1) The order of the Ld. CIT (A) is opposed to law on the facts and in the circumstances of the case. (2) The Ld. CIT(A) erred by deleting the addition made in respect of cash deposit of Rs.1,22,36,000/- on account of assessee's failure to provide any plausible explanation supported with documentary evidences. (3) The Ld.CIT(A) erred in deleting the addition of Rs.1,22,36,000/- made u/s 69A of the Income Tax Act 1961 on the basis of additional evidences filed by the assessee during the appellate

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ITA No.1121/Chny/2026 (2016-17) Kalavathy proceedings without providing an opportunity to the Assessing Officer in gross violation of Rule 46A of the Income Tax Rules, 1962. (4) The CIT(A) erred by not satisfying the requirement of Rule 46A by admitting and accepting additional evidences without AO furnishing his comments and without verification, as held in CIT Vs Manish Buildwell (P) Ltd. (2011) 16 taxmann.com 27 (Delhi) dated 15.11.2011. (5) For these and such other grounds that may be adduced at the time of hearing and it is prayed that the order of the Ld. CIT (A) may be reversed and that of the Assessing Officer be restored.

2.

The brief facts of the case are that the assessee was amongst the non-filers of return during the previous year under consideration, but a specific information about the assessee was there with the Revenue, i.e. the assessee deposited cash amounting to Rs. 1,22,36,000/- and T.D.S. on interest amounting to Rs. 83,069/- was also there during the year under consideration. Based on this information a notice u/s. 148 of the Act was issued vide dated: 30.03.2021. In response to the same the assessee filed a return u/s. 148 of the Act vide dated: 22.11.2021 declaring total income at Rs. 83,070/-. Ultimately, case of the assessee was assessed after making addition of Rs. 1,22,36,000/- u/s. 69A of the Act vide order dated: 24.03.2022 u/s. 147 r.w.s. 144B of the Act. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), who in turn allowed the appeal of the assessee, now the Revenue being aggrieved preferred the present appeal before us.

3.

We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of both the sides along with grounds of appeal taken by the Revenue. It is observed that the assessee claimed herself as an agriculturist with a land holding of 32.04 acres. As per the assessee before the Ld. CIT (A), her annual income from agriculture and cattle farming is 23-25 Lacs per annum. It was observed by the Ld. CIT (A) in his order that there was a total credit of Rs. 151.55 Cr. In the bank account of the assessee during the period 01.04.2015 to 31.03.2016, out of this cash deposit was Rs. 1.22 Cr. during the period 01.04.2015 to 31.03.2016.

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ITA No.1121/Chny/2026 (2016-17) Kalavathy 4. The Ld. CIT (A) vide para 5 of the order further observed that from F.Y.s 2009-10 to 2013-14, the assessee has earned Rs. 1.37 Cr. from agricultural activities (vide year wise break-up given in the appeal order) and this sum is enough to explain the source of cash deposit during the year under consideration, i.e. 2015- 16 amounting to Rs. 1.22 Cr. In terms of arithmetic no doubt this figure of Rs. 1.22 Cr. can be claimed explained by virtue of the assessee’s past earnings as mentioned (supra) from F.Y.s 2009-10 to 2013-14. But, in all probabilities of human nature, it looks quite abnormal that someone is maintain cash in hand for 4 years and suddenly decided to deposit the same in her bank account with figures not in round. Another issue is w.r.t. evidence of accumulation of cash in hand, as the assessee is neither liable as per Act nor maintaining any accounting record to corroborate the same. Then, how she can claim and the Ld. CIT (A) accepted the authenticity of the claim of the assessee.

5.

We have gone through the paper-book submitted by the assessee and found that it simply confirms the land holding and agricultural yield, but what about the actual crop and sales thereafter. We have observed the concluding para 6.7 of the appeal order, wherein the Ld. CIT (A), stated that no contrary material has been bring on record by the AO, on this aspect, it is observed that the assessee herself was at fault before the AO and the Ld. CIT (A) has not followed the procedure as prescribed by In Rule 46A of the Income Tax Rules, 1962. In view of the observations above, in all fairness to both the sides, we are of considered opinion that the Ld. CIT (A)’s order was not proper and was in violation of Rule 46A of the Income Tax Rules, 1962. In view of the above, grounds raised by the Revenue are allowed for statistical purposes and matter is restored back to the file of the AO for de-novo assessment on the issue under consideration after giving a proper opportunity of being heard to the assessee in terms of section 282 of the Act and the assessee is also directed to appear before the AO with all evidence and relevant explanation.

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ITA No.1121/Chny/2026 (2016-17) Kalavathy

6.

In the result, the appeal of the Revenue is allowed for statistical purposes in above terms and directions. Order pronounced on the day of August, 2026, in Chennai.

(एबी टी. वर्की) (गगन गोयल) (ABY T. VARKEY) (GAGAN GOYAL) न्याययक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, ददनाांक/Dated: August, 2026. KB आदेश की प्रयतललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रयतयनधि/DR 5. गार्ड फाईल/GF Digitally signed K BABU by K BABU Date: 2026.08.07 10:11:04 +05'30'

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