SIVARAM YUVARAJ,COIMBATORE vs. ITO, COIMBATORE

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ITA 2287/CHNY/2026Status: DisposedITAT Chennai13 October 2026AY 2022-234 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal observed that the explanations furnished by the assessee before the AO were not fully supported by relevant evidence. However, the assessee subsequently furnished documents like rental agreements, prior year returns, bank statements, and cash flow statements before the CIT(A). The Tribunal noted that these documents were not admitted or considered by the first appellate authority. The Tribunal emphasized that the powers of the CIT(A) are coterminous with the AO and that the first appellate authority should act as an AO as well, disposing of matters on a substantive basis by considering plausible explanations and evidence. Since the assessee had submitted evidence regarding rental income, advances from tenants, cash flow for opening balance, and sale of gold, the Tribunal deemed it fit to restore the matter back to the file of the AO. The AO was directed to reconsider the matter in light of the adduced evidence after giving the assessee a proper opportunity of being heard. The assessee was also directed to be vigilant and cooperative before the AO. The grounds raised by the assessee were allowed for statistical purposes only.

What were the facts?

The assessee, Sivaram Yuvaraj, filed his return of income for Assessment Year 2022-23 declaring a total income of Rs. 13,82,953/-. His case was selected for scrutiny due to large export values in the Export-Import data and non-business or presumptive business. The Assessing Officer (AO) noted a deposit of Rs. 43.56 Lacs in the assessee's HDFC Bank account. Ultimately, the AO made an addition of Rs. 46.27 Lacs under Section 69A of the Income Tax Act, 1961. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who dismissed the appeal. The assessee then filed the present appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the CIT(A) erred in confirming the addition of Rs. 36,92,600/- towards unexplained cash deposits under Section 69A, when the assessee had provided explanations and supporting documents like cash flow statements, opening balance, rental income, withdrawals, advances from tenants, and sale of jewellery, which were not properly appreciated or considered by the appellate authority? - Assessee's contention: The AO had not brought any material on record to disprove the explanation offered, and the addition was made on surmises and conjectures. The CIT(A) failed to appreciate the facts, evidence, and submissions. - Revenue's contention: Not recorded. 2. Whether the CIT(A) erred in confirming the addition of Rs. 9,35,000/- under Section 69A towards unexplained cash payments based solely on third-party statements without providing an opportunity for cross-examination, thereby violating principles of natural justice? - Assessee's contention: The assessee categorically denied the alleged cash payments, and no independent corroborative evidence was brought on record by the AO to substantiate the addition. The principles of natural justice were violated. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 69A,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: 25.08.2026Pronounced: 13.10.2026

आयकर अपीलीय अधिकरण ’सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI माननीय श्री जॉजज जॉजज के., उपाध्यक्ष एवं श्री गगन गोयल लेखा सदस्य के समक्ष BEFORE HONOURABLE GEORGE GEORGE K, VICE PRESIDENT AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 2287/Chny/2026 ननिाारण वर्ा /Assessment Years: 2022-23 Sivaram Yuvaraj, v. Income Tax Officer, No.300, Sukurvarpet, Non-Corporate Ward-1(4), Coimbatore-641 001. Coimbatore. [PAN: AABPY3417A] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Ms. Swetha & Sugaboshini, Advocates, Ld. ARs. प्रत्यर्थी की ओर से /Revenue by : Mr. S. Manoj Prakash, JCIT, Ld. DR. सुनवाईकीतारीख/Date of Hearing : 25.08.2026 घोषणाकीतारीख /Date of Pronouncement : 13.10.2026 आदेश / O R D E R 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 23.03.2026, for the Assessment Year (hereinafter referred as the ‘AY’) 2022-23.

GROUDS OF APPEAL 1. The order of the Commissioner of Income-tax (Appeals) /NFAC is contrary to law facts and in the circumstance of the case. 2. The CIT (Appeals) erred in confirming the assessment order without properly appreciating the facts, evidences, and submissions made by the Appellant. 3. The CIT (Appeals) erred in confirming the addition of Rs. 36, 92,600/- towards unexplained cash deposits under Section 69A. 4. The CIT (Appeals) erred in not considering the cash flow statement and sources explained by the Appellant, such as opening balance, rental income, withdrawals, advances from tenants, and sale of jewellery.

ITA No.2287/Chny/2026 (2022-23) Sivaram Yuvaraj 6. The CIT (Appeals) ought to have appreciated that the Assessing Officer had not brought any material on record to disprove the explanation offered by the Appellant and that the addition has been made merely on surmises and conjectures. 7. The CIT (Appeals) erred in confirming the addition of Rs. 9, 35,000/- under Section 69A towards unexplained cash payments based solely on third-party statements without providing opportunity for cross-examination, thereby violating principles of natural justice. 8. It is submitted that the Appellant had categorically denied the alleged cash payments and no independent corroborative evidence was brought on record by the Assessing Officer to substantiate such addition. 9. The Appellant craves leave to adduce additional grounds / evidences at the time of hearing. 2. The brief facts of the case are that the assessee filed his return of income on 27.07.2022 u/s. 139(1) of the Act, declaring total income at Rs. 13,82,953/-. The case of the assessee was selected for scrutiny for the reason “Large value of Export shown in the Export-Import data and non-business or presumptive business. As per para 2.3 of the assessment order, the assessee deposited Rs. 43.56 Lacs in his bank account with HDFC Bank vide account no. 43510222913. Ultimately, the case of the assessee was assessed after making addition of Rs. 46.27 Lacs u/s. 69A of the Act. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT(A), who in turn dismissed the appeal of the assessee. The assessee being further aggrieved with the same preferred the present appeal before us. 3. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee in the form of paper book filed before us alongwith grounds taken before us. It is observed that the arguments/ explanations furnished by the assessee before the AO were not fully supported by relevant evidence. Thereafter, the same were furnished before the Ld. CIT(A) in the form of rental agreements, prior year returns, bank statements and supporting documents in the form of cash flow etc. But the same were not admitted/considered by the first appellate authority. 4. In a nutshell, the matter before us is in the nature of ex-parte as the assessee was failed to produce relevant material before the AO and when produced before the Ld. CIT (A), the same were not considered by him as unreasonable. There is an established position of Law that the powers of the Ld. CIT(A) are coterminous with that of AO and what an AO can do, the same can be done by the first appellate

ITA No.2287/Chny/2026 (2022-23) Sivaram Yuvaraj authority also. The role of the first appellate authority is dual, i.e. other than being appellate authority, he is suppose to act as an AO also and his endeavour should always be to dispose the matter on substantive basis to avoid any confusion in the mind of general public and collect taxes on substantive basis after considering plausible explanations of the assessee, instead of simply brushing aside the explanations and/or evidence adduced by the assessee. 5. As the assessee has submitted evidences w.r.t. his claim of rental income, advances received from tenants, cash flow to substantiate opening cash balance and sale of Gold. These documents have to be verified by the authorities below as a matter of duty towards the assessee and also a right to protect the interest the revenue. In view of the evidences adduced, we deem it fit to restore the matter back to the file of the AO with a direction to reconsider the matter in the light of evidences adduced by the assessee after giving a proper opportunity of being heard. The assessee is directed to be vigilant and cooperative enough this time while participating in the proceedings before the AO, without seeking any adjournment and must come forward with relevant explanations and supporting evidences. Resultantly, the grounds raised by the assessee are allowed for statistical purposes only. 6. In the result, the appeal of the assessee is allowed for statistical purposes only.

Order pronounced on the 13th day of October 2026, in Chennai.

Sd/- Sd/- (जॉजा जॉजा के.) (गगन गोयल) (GAGAN GOYAL) (GEORGE GEORGE K.) लेखा सदस्य/ACCOUNTANT MEMBER उपाध्यक्ष /VICE PRESIDENT चेन्नई/Chennai, ददनाांक/Dated: 13th October, 2026. KB

ITA No.2287/Chny/2026 (2022-23) Sivaram Yuvaraj आदेश की प्रततललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रतततनधि/DR 5. गार्ड फाईल/GF K Digitally signed by K BABU BABU Date: 2026.10.16 09:10:32 +05'30'

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