KOTTAIMALAIYAN RAVIKUMAR,TENKASI vs. INCOME TAX OFFICER, WARD -4, TIRUNELVELI

ITA 99/CHNY/2026Status: DisposedITAT Chennai07 October 2026AY 2020-213 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, after examining the bank statements and the assessee's submissions, found that the assessee was indeed involved in DTP and online payment services for various government departments on behalf of customers. The Tribunal agreed that the entire cash deposit could not be treated as the assessee's income and that the assessee deserved an opportunity before the AO to explain his transactions and deduce the correct income. Consequently, the matter was restored to the file of the AO for verification of transactions, with a direction to provide the assessee a proper opportunity of being heard. The assessee was also directed to be cooperative and provide relevant explanations and evidence without seeking adjournments. The grounds raised were allowed for statistical purposes. The Tribunal did not decide on the validity of the Section 148 notice or the specific additions made, as the matter was remanded.

What were the facts?

The assessee, Kottaimalaiyan Ravikumar, filed an appeal against the order of the Ld. CIT(A) dated 12.12.2025 for Assessment Year 2020-21. The Revenue had initiated reassessment proceedings by issuing a notice under Section 148 on 26.02.2024, alleging that the assessee, a non-filer, had deposited cash amounting to Rs. 79,32,250/- in a bank account, along with other payments totaling Rs. 79,82,050/-. The assessee filed a return declaring an income of Rs. 2,45,200/-. The Assessing Officer (AO) made additions under Section 69A amounting to Rs. 79,32,250/-, Rs. 13,69,775/-, and Rs. 56,671/-. The Ld. CIT(A) dismissed the assessee's appeal for lack of documentary evidence.

What were the issues?

1. Whether the bank statements, showing frequent and voluminous transactions with debits for statutory payments, sufficiently demonstrate that the assessee acted as an intermediary and not the owner of the funds, making the addition under Section 69A unsustainable? 2. Whether the assessment order was passed in violation of the principles of Audi Alteram Partem by denying the assessee a real and effective opportunity to be heard? 3. Whether Section 69A was wrongly invoked based solely on bank deposits, without considering that the funds were held in a fiduciary capacity for customers for government fee payments? 4. Whether the Ld. CIT(A) erred in treating the entire gross deposit as income instead of only the service commission earned, failing to consider the assessee's business model as a service provider/intermediary? 5. Whether the AO and CIT(A) relied solely on AIS information without independent verification of the source and nature of the assessee's DTP and online service business? 6. Whether the notice under Section 148 dated 26.02.2024 is invalid and without jurisdiction due to non-compliance with the e-Assessment of Income Escaping Assessment Scheme, 2022, framed under Section 151A? Assessee's Contentions: The bank statements prove the assessee was an intermediary. The assessment violated Audi Alteram Partem. Section 69A was wrongly invoked as funds were held in trust. Only service commission, not gross deposits, should be treated as income. AO/CIT(A) relied only on AIS without independent enquiry. The Section 148 notice is invalid due to non-compliance with the faceless assessment scheme. Revenue's Contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 148,Section 69A,Section 151A,Section 282,Section 139(1)

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: 27.08.2026Pronounced: 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 12.12.2025, for the Assessment Year (hereinafter referred as the ‘AY’) 2020-21. GROUDS OF APPEAL

1.

The learned CIT(A) erred in law and on facts by failing to appreciate that the bank statements o

The order continues below.

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