LATE MR. SYED IMAM SYED ISMAIL (REPRESENTED) BY HIS LEGAL HEIR- SYED ISMAIL JAWAHAR,THOOTHKUDI vs. ITO, WARD-4, TUTICORIN, TUTICORIN

ITA 3997/CHNY/2025Status: DisposedITAT Chennai24 September 2026AY 2017-188 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay of 660 days in filing the appeal, accepting the explanation that the delay occurred due to the assessee's demise and the legal heirs' lack of awareness of the proceedings, deeming it a bonafide and reasonable cause. On the merits, the Tribunal considered the solitary issue of whether the CIT(A) was justified in rejecting the assessee's explanation for cash deposits. The Tribunal noted that the assessee consistently claimed the deposits were from past savings out of withdrawals totaling Rs. 33,42,658/- in the five years preceding demonetization. The Tribunal held that this explanation could not be ruled out without contrary evidence. Therefore, the Assessing Officer was directed to delete the addition of Rs. 5,86,110/-. Consequently, all grounds of appeal were allowed. The issue of interest under Sections 234A and 234B was implicitly decided by the deletion of the addition.

What were the facts?

The assessee, represented by their legal heir, filed an appeal against the order of the Additional/Joint Commissioner of Income Tax (Appeals), Panaji, dated December 15, 2023, for Assessment Year 2017-18. The Assessing Officer had made an addition of Rs. 5,86,110/- under Section 68 of the Income Tax Act, 1961, for cash deposits made during the demonetization period, treating them as unexplained money. The assessee contended that these deposits were sourced from their own funds withdrawn from bank accounts in preceding years. The CIT(A) dismissed the appeal, holding that the assessee failed to provide a proper explanation for the source of these deposits. The appeal to the ITAT was filed with a delay of 660 days, attributed to the assessee's demise and the legal heirs' lack of awareness of pending proceedings.

What were the issues?

1. Whether the Learned Commissioner of Income Tax(Appeals) erred in passing an ex-parte order and indirectly upholding the additions of Rs. 5,86,110/- under Section 68 of the Income Tax Act, 1961. (Mixed law and fact) 2. Whether the Learned Commissioner of Income Tax(Appeals) erred in confirming the addition of Rs. 5,86,110/- under Section 68 of the Income Tax Act, 1961, in respect of cash deposits made during the demonetization period, without appreciating that the said cash deposits were sourced from the appellant's own funds withdrawn from the bank account immediately prior to the relevant Assessment Year. (Mixed law and fact) 3. Whether the Learned Commissioner of Income Tax(Appeals) failed to appreciate that the appellant had withdrawn an amount of Rs. 33,42,658/- from his bank accounts in the preceding years, which adequately explains the source of the cash deposits made during the demonetization period. (Mixed law and fact) 4. Whether the Learned Commissioner of Income Tax(Appeals) erred in indirectly confirming the levy of interest under Section 234A of the Act. (Mixed law and fact) 5. Whether the Learned Commissioner of Income Tax(Appeals) erred in indirectly confirming the levy of interest under Section 234B of the Act. (Mixed law and fact) Assessee's Contentions: The cash deposits were made out of past savings from salary income, sourced from amounts withdrawn prior to demonetization. The appellant had withdrawn Rs. 33,42,658/- over five years preceding demonetization, out of which savings were made and deposited. The CIT(A) should have accepted this explanation. Revenue's Contentions: The Learned Sr.DR relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 68,Section 234A,Section 234B,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES,

Before: SHRI INTURI RAMA RAO & SHRI MANU KUMAR GIRI

Pronounced: 24.09.2026

PER INTURI RAMA RAO, ACCOUNTANT MEMBER :

This is an appeal filed by the Assessee directed against the order passed by learned Additional / Joint Commissioner of 1 LATE MR.SYED IMAM SYED ISMAIL (REPRESENTED) BY HIS LEGAL HEIR - SYED ISMAIL JAWAHAR

Income Tax(Appeal), Panaji dated 15.12.2023 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2017-18. 2. The Assessee raised the following grounds of appeal :

“1. The order of the Le

The order continues below.

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