CHARLES SELVARAJ,CHENNAI vs. ITO, NCW-4(3), CHENNAI

ITA 606/CHNY/2026Status: DisposedITAT Chennai06 October 2026AY 2023-246 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the assessee had not clearly explained the bank credits with proper substantiation before the lower authorities. The CIT(A)'s findings and the assessee's submissions to the CIT(A) indicated an attempt to segregate bank credits into various categories. The assessee's Authorized Representative (AR) presented a reconciliation of bank credits during the Tribunal hearing. Considering that the correct details regarding bank credits were not adequately explained, the Tribunal decided to remit the appeal back to the CIT(A) for fresh consideration. The CIT(A) was directed to call for necessary details and decide the impugned additions in accordance with the law. The assessee was directed to furnish the required details and cooperate with the appellate proceedings. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Charles Selvaraj, an individual running a departmental store, filed a return of income for AY 2023-24 declaring Rs. 9,96,960. The Assessing Officer (AO) selected the case for scrutiny and, after reviewing details regarding income and credit card payments, assessed the income at Rs. 19,34,082. The AO added Rs. 1,37,122 for under-reported income, considering the entire turnover as cash receipts, and Rs. 8,00,000 as unexplained expenditure under Section 69C read with Section 115BBE for credit card payments. The assessee appealed to the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi. The CIT(A) enhanced the addition, recomputing the income at Rs. 81,02,916, primarily by treating Rs. 70,67,250 as unexplained money under Section 69A read with Section 115BBE, citing lack of evidence for loan repayment from Mr. Jayaselan Alex.

What were the issues?

1. Whether the CIT(A) could enhance the income of the assessee when the enhancement did not arise from the issues considered in the AO's order? (Question of law and fact, turning on the scope of appellate powers under Section 250). 2. Whether the CIT(A) provided a proper opportunity to the assessee to rebut the contentions regarding unexplained bank credits? (Question of fact, turning on procedural fairness). Assessee's Contentions: - The CIT(A) exceeded his jurisdiction by enhancing the income on issues not considered by the AO. - The assessee was not given a proper opportunity to present evidence against the CIT(A)'s findings on unexplained bank credits. - The total recomputed deposits by the CIT(A) exceeded the entire bank credits, indicating an unsustainable enhancement. Revenue's Contentions: - The enhanced addition by the CIT(A) stemmed from the same issue of explaining credit card payments, making the assessee's legal contention untenable. - The CIT(A)'s conclusion was based on details provided by the assessee, including a cash deposit of Rs. 70,67,250. - The lower authorities' orders were supported.

Which sections of the Income-tax Act were involved?

Section 250,Section 69C,Section 115BBE,Section 270A,Section 271AAC(1),Section 44AD,Section 69A

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. Anshu Sharawat, Addl. CIT

PER PADMAVATHY.S, A.M: This appeal by the assessee is 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 11.11.2025 for Assessment Year (AY) 2023-24. 2. The assessee is an individual and derived income from running a departmental store. The assessee filed the return of income for AY 2023-24 declaring a total income of Rs.9,96,96

The order continues below.

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