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 Kolkata24 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, considering it a bonafide and reasonable cause, citing M.Kalappa Sethi Vs. M.V.Laxmi Narain Rao. On merits, the Tribunal held that the solitary issue was whether the CIT(A) was justified in rejecting the explanation that cash deposits were made from earlier cash withdrawals, out of which savings were made. The Tribunal noted that the assessee consistently maintained that the deposits were from past savings from salary income and that Rs.33,42,658/- was withdrawn over five years preceding demonetization. The Tribunal opined that this explanation could not be ruled out without contrary evidence and directed the Assessing Officer to delete the addition. Consequently, the grounds of appeal were allowed. The issue of interest under Sections 234A and 234B was indirectly confirmed by the CIT(A) and would be deleted consequent to the deletion of the addition.

What were the facts?

The assessee, represented by their legal heir, filed an appeal against an order passed by the Additional/Joint Commissioner of Income Tax (Appeals) on 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. The assessee contended that these deposits were sourced from their own funds withdrawn from bank accounts in preceding years.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 cash deposits. The appeal before the ITAT was filed with a delay of 660 days, attributed to the assessee's demise and the legal heir's 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 Act 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 Learned Commissioner of Income Tax(Appeals) ought to have accepted the explanation that the cash deposits were made out of past savings from amounts withdrawn (Rs.33,42,658/-) prior to demonetization. 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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