ITO WARD 1, TVM, TIRUVANNAMALAI vs. RAMAKRISHNAN YOKESH KUMAR, ARNI

ITA 1015/CHNY/2026Status: DisposedITAT Chennai06 October 2026AY 2015-169 pages
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What did the Tribunal hold?

The Tribunal held that the CIT(A) deleted the addition based on documents that were not fully examined by the AO, and the CIT(A) himself did not correlate cash sales with bank deposits or record any factual finding. The Tribunal found no clear evidence substantiating that cash sales were the source of cash deposits, concluding the source was not conclusively explained. In the interest of natural justice and considering the assessee's business, the Tribunal restored the issue to the AO for verification of documentary evidence supporting the claim of cash sales as the source, with a direction to provide the assessee a reasonable opportunity of being heard. The Revenue's appeal was allowed for statistical purposes. Regarding the cross-objection, the Tribunal found that while the notice under Section 148A(b) initially gave less than seven days, the AO passed the order under Section 148A(d) twelve days later, providing the assessee a real opportunity to respond. Since the assessee did not demonstrate any impediment or attempt to respond, the notice was not vitiated, and the cross-objection was dismissed.

What were the facts?

The Revenue filed an appeal and the assessee filed cross objections against the order of the CIT(A) for Assessment Year 2015-16. The assessee, an individual, did not file a return of income. The Assessing Officer (AO) received information about cash deposits of Rs. 63,46,000/-. After reopening the assessment, the AO treated total cash deposits of Rs. 4,65,59,618/- as unexplained under Section 69A of the Income Tax Act, 1961, as the assessee failed to provide details of the source of these deposits. The assessee claimed the deposits were from cash sales of home appliances and submitted supporting documents to the CIT(A). The CIT(A) deleted the addition, holding the source was explained. The Revenue's appeal challenges this deletion, citing the admission of fresh evidence and procedural irregularities.

What were the issues?

1. Whether the CIT(A) erred in deleting the addition of Rs. 4,65,59,618/- made by the AO under Section 69A on account of unexplained cash deposits, despite the assessee failing to prove the source during assessment proceedings, leading to a best judgment assessment under Section 144 r.w.s. 147 (Revenue's contention). The assessee argued that the CIT(A) correctly considered documentary evidence including VAT returns, Balance Sheet, and P&L account, establishing cash sales as the source. 2. Whether the CIT(A) erred in admitting fresh/additional evidence (Audit Report, VAT returns, Balance Sheet, P&L Account) without valid reasons as required by Rule 46A(2) of the Income-tax Rules, 1962, and without affording the AO an opportunity to examine or rebut it, violating Rule 46A(3) (Revenue's contention). The assessee contended that these documents were not entirely fresh and the CIT(A) properly examined them. 3. Whether the notice issued under Section 148A(b) of the Act dated 19.03.2022 was invalid for not providing seven clear days for the assessee to respond (Assessee's contention in CO). The Revenue argued that the AO passed the order under Section 148A(d) on 31.03.2022, giving the assessee more than seven days in substance.

Which sections of the Income-tax Act were involved?

Section 69A,Section 144,Section 147,Section 148,Section 148A,Section 148A(b),Section 148A(d),Section 250,Section 46A,Section 46A(2),Section 46A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

Before: SHRI SS VISWANETHRA RAVI & MS. PADMAVATHY.S&

For Respondent: Ms. R. Anitha, CIT

Heard together (2 matters)

C.O No.98/CHNY/2026
ITA No.1015/Chny/2026

Read from the judgment's own cause title. This page is filed under one of them.

PER PADMAVATHY.S, A.M: This appeal by the Revenue and Cross Objections (COs) by the assessee are against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 15.12.2025 for Assessment Year (AY) 2015-16. ITA No.1015/C

The order continues below.

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