SELVI,CHENNAI vs. ITO, NCW-19(3), CHENNAI

ITA 1408/CHNY/2026Status: DisposedITAT Chennai24 September 2026AY 2017-186 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the appeal filed before the CIT(A) was against the order passed under Section 154 of the Act, dated March 19, 2020, not the assessment order passed under Section 144 of the Act, dated September 12, 2019. This was evidenced by the Form No. 35, which indicated an appeal against the Section 154 order, and the assessee's request for condonation of delay from the date of the Section 154 order, not the assessment order. The Tribunal noted that there was no change in the assessed income in the Section 154 order compared to the Section 144 order. Therefore, the issue of additions made in the assessment order under Section 144 could only be challenged in an appeal filed against that specific order. Consequently, the Tribunal found that the CIT(A) had rightly dismissed the appeal. The Tribunal did not find any reason to interfere with the CIT(A)'s order. The grounds of appeal raised by the Assessee were dismissed.

What were the facts?

The assessee, an individual, failed to file a regular Income Tax Return for Assessment Year 2017-18. Based on information of cash deposits totaling Rs.11,42,500/- in specified bank notes during demonetization, the Assessing Officer (AO) issued a notice under Section 142(1). The assessee did not respond, leading the AO to frame a best judgment assessment under Section 144 on September 12, 2019, totaling Rs.14,32,890/-. The AO added Rs.11,42,500/- as unexplained money due to the failure to explain the source of cash deposits. Subsequently, the AO passed a rectification order on March 19, 2020, concerning surcharge. The assessee filed an appeal before the CIT(A) against this rectification order, challenging the additions made in the assessment. The CIT(A) dismissed the appeal, holding that the additions in the assessment order could not be challenged in an appeal against the rectification order.

What were the issues?

1. Whether the CIT(A) erred in dismissing the appeal without adjudicating the substantive contentions raised by the Appellant on merits, particularly concerning additions made under Section 69, without calling for books of account or seeking explanations regarding cash deposits. 2. Whether the CIT(A) erred in dismissing the appeal without granting an effective opportunity to the Appellant to present their case, thereby violating principles of natural justice. 3. Whether the CIT(A) erred in dismissing the appeal by holding that the subject matter of addition made in the assessment order under Section 144 could not be challenged in an appeal against the rectification order passed under Section 154. Assessee's Contentions: - The CIT(A) dismissed the appeal on technical reasoning without adjudicating the substantive contentions on merits. - Additions under Section 69 were made without calling for books of account or seeking explanations. - The appeal was filed against the original assessment under Section 144, not just the rectification issue. - Cash deposits of Rs.7,82,500/- were from sale of school/sport uniforms, already offered in ITR. - Cash deposits of Rs.3,60,000/- were from relatives for the appellant's husband's medical expenses. - The CIT(A) failed to grant an effective opportunity, violating principles of natural justice. Revenue's Contentions: - The Learned Sr.DR opposed the assessee's submissions.

Which sections of the Income-tax Act were involved?

Section 139,Section 142(1),Section 144,Section 154,Section 250,Section 69

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 Income Tax(Appeal), Indore dated 16.10.2026 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2017-18. 1 SELVI

2.

The Assessee raised the following grounds of appeal :

“1. The order of the CIT (A), ADDL/JCIT (A) INDORE dismissing the appeal is contrary to law erroneous and unsustainable on the facts of the case.

2.

The CIT(A) erred in

The order continues below.

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