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

ITA 1408/CHNY/2026Status: DisposedITAT Kolkata24 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, as indicated by the Form No. 35 and the condonation of delay application. The assessee had sought 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 between the Section 144 assessment order and the Section 154 rectification 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. The Tribunal concluded that the CIT(A) had rightly dismissed the appeal and found no 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 return of income for Assessment Year 2017-18. Based on information regarding cash deposits of 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 the Rs. 11,42,500/- as unexplained money due to the lack of explanation. Subsequently, the AO passed a rectification order on March 19, 2020, concerning surcharge. The assessee appealed to the CIT(A) against the assessment order. However, the CIT(A) dismissed the appeal, holding that the additions made 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 regarding additions made under Section 69 without calling for books of account or seeking explanations for cash deposits. 2. Whether the CIT(A) erred in dismissing the appeal against the original assessment order under Section 144 by adjudicating on the rectification issue, which was only a corollary to the assessment, and failing to grant an effective opportunity to present the case. 3. Whether the CIT(A) failed to appreciate that cash deposits of Rs. 7,82,500/- were out of sale proceeds of school/sport uniforms already offered to tax, and cash deposits of Rs. 3,60,000/- were from relatives for the appellant's husband's artificial limbs. Assessee's Contentions: The CIT(A) should have adjudicated the substantive contentions on merits, including that additions under Section 69 were made without proper procedure. The appeal was filed against the Section 144 assessment order, not just the rectification order. Cash deposits were explained as out of business income and funds from relatives. The dismissal without effective opportunity violated natural justice. Revenue's Contentions: The revenue 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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