THANGAVEL,CHENNAI vs. ITO, NON CORP WARD 10(3) CHE, CHENNAI

ITA 3208/CHNY/2025Status: DisposedITAT Chennai20 May 2026AY 2016-175 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that both the AO and CIT(A) passed ex parte orders without proper opportunity to the assessee. In the interest of justice, the Tribunal set aside the CIT(A)'s order and restored the appeal to the AO for de novo assessment.

What were the facts?

The assessee did not file a return of income for AY 2016-17. The AO made a best judgment assessment under Section 144 based on export transactions, and the CIT(A) dismissed the appeal ex parte. The assessee claimed they did not receive notices from the CIT(A).

What were the issues?

Whether the ex parte assessment orders passed by the AO and CIT(A) were valid without providing proper opportunity to the assessee.

Which sections of the Income-tax Act were involved?

Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

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

Hearing: 08.04.2026Pronounced: 20.05.2026

आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as ‘Ld.CIT(A)‘), Delhi, dated 08.09.2025 for the Assessment Year (hereinafter referred to as ‘AY‘) 2016-17.

At the outset, the Ld.AR of the assessee submitted that the Ld.CIT(A) has passed ex parte order qua assessee. The Ld.AR also pointed out that the AO has also passed best judgment assessment [ex

ITA No.3208/Chny/2025 (AY 2016-17) Thangavel :: 2 :: parte order] u/s.144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) and hence, according to the Ld.AR, both the authorities have passed ex parte orders, without hearing the assessee. According to the Ld.AR, the AO didn’t give proper opportunity to the assessee. Hence, relying on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC), she prays that one more opportunity to be given to the assessee in the interest of justice.

Per contra, the Ld.DR doesn’t want us to give one more innings to the assessee.

Having heard both the parties and after perusal of the records, we note that the assessee is an individual who didn’t file the return of income (RoI) for AY 2016-17. The AO noted that the assessee had entered into the transaction given below: Type of transaction Amount Exports (customs-shipping bill) ₹11,64,59,625/- 5. However, since the assessee didn’t file the return, he issued notice u/s.148 on 24.03.2023 for reopening of assessment for AY 2016-17 and finding no response from the assessee, the AO is noted to have passed ‘best judgment assessment’ u/s.144 of the Act by taking note that the assessee has issued shipping bills for exporting amounting to ₹11,64,59,625/-. And, despite notices, the assessee didn’t furnish the details of the said transaction. Hence, the AO was of the view “being

ITA No.3208/Chny/2025 (AY 2016-17) Thangavel :: 3 :: export sale, the amount of shipping bills for export is treated as utilized for business activities and estimated the profit from such business at 12.5% of total export sale which is amount to ₹1,45,57,453/- during the year under consideration is hereby added to the total income as undisclosed/unexplained income of the assessee“. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) which was dismissed by the Ld.CIT(A) finding no response from the assessee despite five (5) notices given to him.

Assailing the action of the Ld.CIT(A), the assessee brought to our notice that even though the Ld.CIT(A) says that he has given five (5) opportunities, however, the assessee didn’t receive single notice from the Ld.CIT(A). Hence, the assessee couldn’t respond to the purported notices of the Ld.CIT(A). In this regard, we note that even though the Ld.CIT(A) says that he has given five (5) opportunities to the assessee, however, we find from perusal of the impugned order that there was no mention about the details of the notices issued to assessee. Hence, the impugned action of the Ld.CIT(A) can’t be per se accepted since without notices being served upon the assessee, assessee can’t be expected to respond to it. Be that as it may. We find that the AO also has passed best judgment assessment [ex parte order qua assessee] which obviously was passed without hearing the assessee. The Ld.AR has undertaken to file all the

ITA No.3208/Chny/2025 (AY 2016-17) Thangavel :: 4 :: relevant details/documents to substantiate the queries raised by the AO provided an opportunity is given to him. Hence, for the interest of justice and fair play, we are inclined to grant one more opportunity to the assessee and for that we rely on decision of the Hon’ble Supreme Court in the case of TIN Box Co. (supra) and set aside the impugned order of the Ld.CIT(A) and restore the appeal back to the file of the AO for de novo assessment. Considering the conduct of the assessee, we deem it fit to levy cost of ₹10,000/-, which assessee to remit at State Legal Aid Authority, Hon’ble Madras High Court within three (3) months of receipt of this order; and produce necessary proof of depositing the same before the AO and thereafter the AO to pass the assessment order after hearing the assessee in accordance to law.

In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 20th day of May, 2026, in Chennai. Sd/- Sd/- (प�ावती .एस) (एबी टी. वक�) (PADMAVATHY. S) (ABY T. VARKEY) लेखा सद�य/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 20th May, 2026. YS

ITA No.3208/Chny/2025 (AY 2016-17) Thangavel :: 5 :: आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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