ASHOKKUMAR BALAJI,KRISHNAGIRI vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), SALEM

आयकरअपील�यअ�धकरण ’बी’ �यायपीठ,चे�नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI �ी मनुकुमारिग�र, �ाियक सद� एवं �ी एस. आर. रघुनाथा लेखासद� BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER

आयकर अपील सं./ITA No. 1829/Chny/2026 �नधा�रण वष�/Assessment Years: 2017-18 ASHOKKUMAR BALAJI v. The Dy. CIT, Circle-1(1), 1/784/20 Sri Balaji Traders, Salem Krishnagiri Road Rayakotta, Krishnagiri- 635116 [PAN: AIVPB 9158 K] (अपीलाथ�\Appellant) (��यथ�\Respondent)

अपीलाथ� क ओर से/ Appellant by : Ms. A. Nikitha, Advocate ��यथ� क ओर से /Respondent by : Mr. E. Elango, JCIT सुनवाई क तार�ख/Date of Hearing : 11.08.2026 घोषणा क तार�ख /Date of : 14.10.2026 Pronouncement आदेश / O R D E R PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the assessee is directed against the order dated 30.01.2026 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the ld. CIT(A)”], for the assessment year 2017–18, whereby the ld. CIT(A) confirmed the assessment completed by the Assessing Officer (AO) u/s. 144 of the Income Tax Act, 1961 (“the Act”).

ITA No. 1829/Chny/2026 (AY 2017-18) Ashokkumar Balaji Vs DCIT C 411) :: 2 :: 2. The assessee has raised the following grounds of appeal as under: - 1. The order of the CIT(A) is bad in law, contrary to facts and liable to be set aside. 2. The CIT(A) having taken note of the fact that the order of AO is a best judgment, ought to have set aside the order of assessment by exercising his powers u/s.251 (1 )(a) for fresh consideration. 3. The CIT(A) erred in confirming a sum of Rs.1,15,32,460/-u/s.69A as unexplained money without adverting to the facts of the case. 4. The CIT(A) failed to appreciate that the addition was sustained solely on account of non-compliance, without any independent material brought on record to establish that the deposits constituted unexplained income. 5. The CIT(A) failed to appreciate the fact that the nature of business Of the Appellant requires cash deposits and as such the entire cash deposits are business receipts. 6. The CIT(A) erred in upholding the action of AO in treating the cash deposits as unexplained u/s.69A only on the sole premise that the cash was deposited during demonetization period. That apart there is no concurrent finding at all. 7. The CIT(A) failed to consider the fact that the Appellant is subject to audit u/s.44AB and as such the net profit is a very meager sum and erred in treating the entire cash deposits during demonetization as unexplained without application of mind. 8. Alternatively, even if the addition is to be made uts.69A Of the Act, it can only be taxed @30%, the appropriate rate of taxation u/s.115BBE for A.Y.2017-18. 9. The appellant craves leave to add, amend, alter or withdraw any of the above grounds at the time of hearing.

2.1 The assessee has raised several grounds challenging the validity of the order passed by the ld. CIT(A), the confirmation of the addition of Rs.1,15,32,460/- made u/s. 69A of the Act in respect of cash deposits during the demonetisation period, and

ITA No. 1829/Chny/2026 (AY 2017-18) Ashokkumar Balaji Vs DCIT C 411) :: 3 :: the applicability of the provisions of section 115BBE of the Act. The assessee has also contended that the addition was sustained without properly appreciating the nature of its wholesale business and the explanation that the cash deposits represented business receipts. 3. Briefly stated, the assessee is an individual carrying on wholesale business under the proprietary concern M/s Sri Balaji Traders. For the year under consideration, the assessee filed its return of income on 31.03.2018, declaring total income of Rs.12,02,640. The case was selected for scrutiny under the Computer-Assisted Scrutiny Selection (CASS) mechanism. During the course of assessment proceedings, the AO issued notices u/s.s 143(2) and 142(1) of the Act and called upon the assessee to furnish details of bank accounts, cash deposits made during the normal period as well as the demonetisation period, and the nature and source of such deposits. The AO also obtained information from the concerned banks. Based on the information available on record, the AO noted that the assessee had deposited cash aggregating to Rs.1,15,32,460 in three bank accounts during the demonetisation period, comprising Rs.72,12,560 in State Bank of India, Rs.38,06,400 in HDFC Bank and Rs.5,13,500 in LVB. In the absence of an explanation from the assessee, the AO treated the aforesaid amount as unexplained money u/s. 69A read with section 115BBE of the Act and completed the assessment u/s. 144 of the Act, determining the total income at Rs.1,27,35,100.

ITA No. 1829/Chny/2026 (AY 2017-18) Ashokkumar Balaji Vs DCIT C 411) :: 4 :: 4. Aggrieved by the assessment order, the assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A), however, passed the impugned order dated 30.01.2026 ex parte and confirmed the addition made by the AO. The assessee is in further appeal before this Tribunal. 5. We have both the parties, considered the facts and circumstances of the case and perused the material available on record. The principal issue requiring consideration at this stage is whether the impugned order passed by the ld. CIT(A) warrants being set aside for fresh adjudication. 6. We note that the assessment in the present case was completed u/s. 144 of the Act, primarily on account of the assessee's alleged non-compliance with the notices issued by the AO and the absence of an explanation regarding the nature and source of the cash deposits. The addition of Rs.1,15,32,460 was made u/s. 69A of the Act on the basis of the information obtained from the banks and the failure of the assessee to explain the deposits during the assessment proceedings. 7. We further note that the impugned order of the ld. CIT(A) was passed ex parte on account of non-appearance by the assessee. Having regard to the nature of the dispute, the quantum of addition involved and the contentions raised by the assessee, we are of the considered view that the matter requires fresh consideration by the first appellate authority after providing the assessee an effective opportunity to present

ITA No. 1829/Chny/2026 (AY 2017-18) Ashokkumar Balaji Vs DCIT C 411) :: 5 :: its case. The issues relating to the nature and source of the cash deposits, the applicability of section 69A of the Act and the contention concerning section 115BBE of the Act need to be examined and adjudicated in accordance with law, on the basis of the material available and such further material as may be lawfully furnished. 8. We are conscious of the fact that the assessee did not comply with the notices issued during the assessment proceedings, as recorded by the AO and CIT(A). Nevertheless, in the interest of substantial justice, we consider it appropriate to provide the assessee one further opportunity to substantiate its case before the ld. CIT(A). Such opportunity shall be subject to the assessee's diligent cooperation in the appellate proceedings. 9. Accordingly, in the interest of justice and fair adjudication, we set aside the impugned order dated 30.01.2026 passed by the ld. CIT(A) and restore the appeal to the file of the ld. CIT(A) for fresh adjudication in accordance with law. The ld. CIT(A) shall consider the grounds raised by the assessee, examine the relevant facts and supporting material, and pass a speaking order on merits after affording the assessee a reasonable and effective opportunity of being heard. 10. We make it clear that we have not expressed any opinion on the merits of the addition of Rs.1,15,32,460 made u/s. 69A of the Act or on the ground concerning the applicability of

ITA No. 1829/Chny/2026 (AY 2017-18) Ashokkumar Balaji Vs DCIT C 411) :: 6 :: section 115BBE of the Act. All issues are left open for fresh adjudication by the ld. CIT(A) in accordance with law. 11. The assessee is directed to cooperate with the appellate proceedings and furnish the requisite details and supporting evidence as may be necessary for proper adjudication of the appeal. The ld. CIT(A) shall decide the matter independently, on its merits and in accordance with law. 12. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the 14th day of October, 2026 in Chennai.

Sd/- Sd/- (एस. आर. रघुनाथा) (मनु कुमार िग�र) (S.R.RAGHUNATHA) (MANU KUMAR GIRI) लेखा सद*य/ACCOUNTANT MEMBER �या�यक सद*य/JUDICIAL MEMBER चे�नई/Chennai, +दनांक/Dated: 14th October 2026 SANDEEP Digitally signed by SNDP, Sr. PS SANDEEP KUMAR आदेश क ��त,ल-प अ.े-षत/Copy to: KUMAR Date: 2026.10.16 1. अपीलाथ�/Appellant 11:30:09 +05'30' 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF