SATHIYAMOORTHY ,CUDDALORE vs. ITO, WARD-2,, CUDDALORE

ITA 3584/CHNY/2026Status: DisposedITAT Chennai07 October 2026AY 2022-234 pages
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What did the Tribunal hold?

The Tribunal observed that the assessee had made significant cash deposits and had substantial sundry creditors, and claimed agricultural income. The CIT(A) had given the assessee five opportunities to present their case, but the assessee never appeared, leading to the dismissal of the appeal. Similarly, no explanation was furnished before the ITAT. However, as the ITAT is the final fact-finding authority, it aims to decide matters on merits rather than ex-parte. Therefore, the Tribunal restored the matter to the file of the CIT(A) with a direction to adjudicate the appeal afresh after giving the assessee a fresh opportunity of being heard. The assessee is directed to participate without fail and provide relevant explanations and evidence. This direction is subject to the assessee depositing Rs. 10,000/- with the Tamil Nadu State Legal Service Authority. The grounds raised by the assessee are allowed for statistical purposes, and the delay in filing the appeal before the ITAT is condoned.

What were the facts?

The assessee, Sathiyamoorthy, filed an appeal against the order of the Commissioner of Income Tax (Appeals) / NFAC, Delhi, for Assessment Year 2022-23. The assessee had declared a total income of Rs. 23,27,790/- and agricultural income of Rs. 10,00,000/-. The case was selected for scrutiny due to high value cash deposits and high liabilities compared to low income. The Assessing Officer (AO) made additions of Rs. 58,00,000/-, Rs. 1,09,00,000/-, and Rs. 10,00,000/- under Section 68 of the Income Tax Act. The CIT(A) dismissed the assessee's appeal. The assessee filed a further appeal before the ITAT with a delay of 176 days.

What were the issues?

1. Whether the CIT(A) erred in dismissing the appeal without providing sufficient opportunity to the Appellant, violating principles of Natural Justice, as per Ground 2. 2. Whether the AO erred in adding Rs. 1,67,00,500/- (comprising Rs. 58 Lacs and Rs. 1.09 Cr.) as unexplained credit under Section 68 of the Act, and whether the CIT(A) erred in upholding this addition, as per Grounds 3 and 4. 3. Whether the CIT(A) erred in upholding the AO's action of treating Rs. 10,00,000/- declared as agricultural income as unexplained money under Section 69A of the Act, as per Ground 5. 4. Whether taxing the additions at the rate prescribed under Section 115BBE of the Act is illegal, as per Ground 6. 5. Whether the CIT(A) erred in upholding the levy of interest under Sections 234A, 234B, and 234C of the Act, as per Ground 7. Assessee's Contentions: The assessee argued that the CIT(A) dismissed the appeal without sufficient opportunity, violating natural justice. The additions made by the AO under Section 68 and Section 69A were unjustified and arbitrary. Taxing under Section 115BBE and levying interest under Sections 234A, 234B, and 234C were illegal. Revenue's Contentions: The judgment records no specific contentions from the revenue. However, the AO's actions, as detailed in the facts, indicate the revenue's stance that the credits and agricultural income were unexplained.

Which sections of the Income-tax Act were involved?

Section 68,Section 69A,Section 115BBE,Section 234A,Section 234B,Section 234C,Section 282

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: HONOURABLE GEORGE GEORGE K & SHRI GAGAN GOYAL

Hearing: 19.08.2026Pronounced: 07.10.2026

PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of Ld. Commissioner of Income Tax (A) / NFAC, (hereinafter referred as the ‘Ld. CIT(A)’), Delhi dated 30.10.2025, for the Assessment Year (hereinafter referred as the ‘AY’) 2022-23. GROUDS OF APPEAL

1.

The order of CIT (A) is erroneous, bad in law and liable to be annulled as the same is opposed to the fact

The order continues below.

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