SOOSAI MANICKAM THERASA,SALEM vs. THE INCOME TAX OFFICER, WARD-1(2), SALEM

ITA 3433/CHNY/2025Status: DisposedITAT Chennai07 October 2026AY 2017-185 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s finding on the addition of Rs. 2,55,500/- as unexplained investment under Section 69A read with Section 115BBE of the Act, dismissing the assessee's grounds related to this issue. The Tribunal noted the assessee's failure to furnish satisfactory evidence regarding the source of these deposits. Regarding the rate of tax, the Tribunal followed the jurisdictional High Court's decision in SMILE Microfinance Ltd. v. ACIT, which held that the enhanced rate of tax under Section 115BBE applies only to transactions occurring on or after April 1, 2017. Since the cash deposits in question occurred prior to April 1, 2017, the Tribunal directed the AO to apply the pre-amended rate of 30% under Section 115BBE on the sustained addition of Rs. 2,55,500/- and recompute the tax liability. The ratio decidendi is that the enhanced tax rate under Section 115BBE is prospective and not retrospective for AY 2017-18 if the transactions occurred before April 1, 2017.

What were the facts?

The assessee, Soosai Manickam Therasa, is an individual engaged in the business of trading in Garlic and Turmeric. For Assessment Year 2017-18, the assessee did not file her return of income. The Assessing Officer (AO) noted cash deposits of Rs. 23,60,500/- in Specified Bank Notes (SBNs) and Rs. 25,87,834/- in non-SBNs during the demonetization period in her Axis Bank account. The AO issued notices, but the assessee remained silent. After obtaining bank statements, the AO passed an ex-parte assessment order under Section 143(3) of the Income Tax Act, 1961, making an addition of Rs. 23,60,500/- as unexplained investment under Section 69 read with Section 115BBE, and an addition of Rs. 2,07,027/- as business income. The assessee appealed to the CIT(A), who, after a remand report, confirmed an addition of Rs. 2,55,500/- as unexplained investment, allowing part of the original addition.

What were the issues?

1. Whether the Commissioner of Income Tax (Appeals) erred in confirming additions without specifying the section under which the addition was sustained, especially when the AO made additions under Section 69 read with Section 115BBE and the JAO recommended addition under Section 69A? Assessee's Contention: The learned Authorized Representative (AR) for the assessee argued that the CIT(A) erred in confirming additions without specifying the relevant section, noting discrepancies between the AO's and JAO's proposed additions. Without prejudice, the AR contended that if any addition is sustained, the tax rate should be restricted to 30%, as the higher rate under Section 115BBE is not applicable to AY 2017-18, relying on the decision in S.M.I.L.E Micro Finance Limited. Revenue's Contention: The learned Departmental Representative (DR) relied on the orders of the authorities, stating that the assessee failed to explain the source of cash deposits. The DR prayed for confirmation of the CIT(A)'s order and contended that the higher tax rate under Section 115BBE is applicable to the impugned AY.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144,Section 69,Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA

Hearing: 09.09.2026Pronounced: 07.10.2026

PER S.R.RAGHUNATHA, AM:

The present appeal is filed by the assessee against the order dated 18.07.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 26.09.2019 passed u/s.143(3) of the Income Tax Act,

:-2-: 1961 (hereinafter

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 69

All 9,011 judgments and leading authorities on Section 69 →

Recent GST High Court judgments

Search GST case law →