UMAPATHY BALAMURUGAN,CHENNAI vs. ASSESSING OFFICER NON CORPORATE WARD 17(6), CHENNAI

Brief facts of the case are that the assessee is an individual and did not file his return of income for AY 2015-15. As per the information available with the department, the AO observed that the assessee has made cash deposits to the tune of Rs.30,62,500/- in his bank account maintained with Karur Vyasa Bank, Triplicane Branch and has also made a time deposit of Rs.37,00,000/- during the assessment year. The case was re-opened u/s.147 of the Act, accordingly, a notice u/s.148 of the Act and statutory notices were issued to the assessee and by calling for details. However, the assessee chose to be silent and did not respond to any of the notices. Hence, the AO completed the assessment by passing an exparte order u/s.147 r.w.s 144 of the Act dated 27.02.2024 by making an addition of Rs.67,62,500/- as unexplained cash credit u/s.68 of the Act and by arriving total income of Rs. 67,62,500/-.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 20.08.2024.

At the outset, we observed that ld.CIT(A) has provided four opportunities for the assessee to appear for hearings as detailed in paragraph 6 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence the ld.CIT(A) passed an order dated 10.12.2025 by confirming the order of the AO.

The ld.AR submitted that the assessee’s income is below the taxable limit and never filed his return of income and he was unaware of department procedural aspects of response to notices issued and served and hence, the assessee could not participate in the assessment and appeal proceedings. Further, the ld.AR argued that the ld.CIT(A) failed to appreciate that the total deposits in the Karur Vysya bank is only Rs.16,26,200/- from the sale consideration of the immovable property and not Rs.30,62,500/- and the term deposits Rs.17,00,000/- was sourced from the sale of immovable property deposited in the bank account. The assessee along with his family sold his immovable property of Rs.58,10,000/- and received his share and his mother and sister share Rs.21,78,750/- in his account. In view of the above, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO as the assessment order passed without having the complete details of the source. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the authorities complete the proceedings effectively.

Per contra, the ld.DR submitted that both the AO and the ld.CIT(A) provided sufficient opportunity to appear before them. However, the assessee has been negligent in responding to the statutory notices and hence, prayed for confirming the order of the ld.CIT(A).

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an exparte order by considering the details and information available with the department and on appeal the same has been confirmed by the ld.CIT(A), NFAC due to non-participation of the assessee.

We further note that the assessee has sought to raise legal grounds touching upon the validity of the reassessment proceedings. Since such legal

Accordingly, in the interest of substantial justice and fair play, we set aside the impugned order of the ld.CIT(A) and restore the matter to the file of ld.CIT(A) with a direction to adjudicate the appeal afresh in accordance with law after providing adequate opportunity of being heard to the assessee. The assessee is also granted liberty to raise all legal and factual grounds available under the Act, including the grounds challenging the validity of the reassessment proceedings-initiated u/s.147/148 of the Act. The ld.CIT(A) shall consider and adjudicate the same on merits by passing a speaking order. At the same time, we make it clear that the assessee shall extend full cooperation in the appellate proceedings and shall promptly furnish all details, explanations and evidences as may be called for by the ld.CIT(A). Failure to do so would entitle the appellate authority to proceed in accordance with law on the basis of the material available on record.

In the result, appeal filed by the assessee is allowed for statistical purposes.