MANJUNATHA GURAPPA,KRISHNAGIRI vs. THE INCOME TAX OFFICER, WARD - 1, HOSUR

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ITA 1848/CHNY/2026Status: DisposedITAT Chennai14 October 2026AY 2018-196 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the appeal was filed against the order of the Ld. CIT(A) who confirmed the assessment order passed by the Assessing Officer u/s. 144 read with Section 147 of the Act. The assessee had raised grounds challenging the ex parte nature of the order, the legality of the reopening, and specific additions made to income. The grounds raised by the assessee included the confirmation of an addition of Rs. 1,31,235/- by estimating income under Section 44AD, sustaining the inclusion of Rs. 1,11,408/- leading to duplication, not appreciating that cash deposits were explained, and confirming an addition of Rs. 10,00,000/- under Section 69 as unexplained investment. The judgment does not record the specific findings or reasoning of the Tribunal on each of these grounds, nor does it mention any operative directions or issues left undecided. The provided text is an excerpt and does not contain the full decision of the Tribunal.

What were the facts?

The assessee, Manjunatha Gurappa, filed an appeal against the order dated 28.01.2026 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The Ld. CIT(A) had confirmed the assessment order passed by the Assessing Officer under Section 144 read with Section 147 of the Income Tax Act, 1961, for the Assessment Year 2018-19. The assessment proceedings were initiated under Section 147 based on information regarding financial transactions during the Financial Year 2017-18. This information included cash deposits of Rs. 38,02,540/- in bank accounts and the purchase of immovable property amounting to Rs. 1,20,00,000/-.

What were the issues?

1. Whether the ex parte assessment order, passed without providing an adequate and effective opportunity of being heard, is bad in law and in violation of the principles of natural justice, thus liable to be deleted in toto? The assessee argued that the order was passed without a proper hearing. The revenue's contentions are not recorded. 2. Whether the reopening of assessment under Section 147 of the Act is wholly illegal and unsustainable, and ought to have been quashed by the CIT(A)? The assessee contended that the reopening was illegal. The revenue's contentions are not recorded. 3. Whether the CIT(A) erred in confirming the addition of Rs. 1,31,235/- by treating 8% of cash deposits and receipts as turnover and estimating income under Section 44AD without proper verification or basis? The assessee argued that the estimation lacked proper basis. The revenue's contentions are not recorded. 4. Whether the CIT(A) erred in sustaining the inclusion of Rs. 1,11,408/- as part of turnover, leading to duplication of income, as it was already considered? The assessee contended that this resulted in double counting. The revenue's contentions are not recorded. 5. Whether the CIT(A) erred in not appreciating that cash deposits represented explained sources, including withdrawals, borrowings, and business circulation, and thus could not be treated as undisclosed turnover? The assessee argued that the deposits were explained. The revenue's contentions are not recorded. 6. Whether the CIT(A) erred in confirming the addition of Rs. 10,00,000/- under Section 69 as unexplained investment, without considering the availability of funds from disclosed income and other explained sources? The assessee argued that funds were available from disclosed sources. The revenue's contentions are not recorded.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 44AD,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA

Hearing: 12.08.2026

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. 1848/Chny/2026 �नधा�रण वष�/Assessment Years: 2018-19 MANJUNATHA GURAPPA v. The Income Tax Officer, No. 412/3 Narasamma Colony, Ward-(1), Alasanatham Hosur Taluk, Hosur-635109 Krishnagiri-635109 [PAN: AJKPM 7409 A] (अपीलाथ�\Appellant) (��यथ�\Respondent)

अपीलाथ� क ओर से/ Appellant by : Ms. Nikitha, Advocate ��यथ� क ओर से /Respondent by : Mr. E. Elango, JCIT सुनवाई क तार�ख/Date of Hearing : 12.08.2026 घोषणा क तार�ख /Date of : 14.10.2026 Pronouncement आदेश / O R D E R PER MANU KUMAR GIRI, JM:

This appeal filed by the assessee is directed against the order dated 28.01.2026 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 2018-19, whereby the Ld. CIT(A) confirmed the assessment order passed by the Assessing Officer u/s. 144 read with Section 147 of the Income Tax Act, 1961 (“the Act”).

ITA No. 1848/Chny/2026 (AY 2018-19) Manjunatha Gurappa Vs ITO W (1) :: 2 :: 2. The assessee has raised the following grounds of appeal as under:- 1. The ex parte order passed without providing adequate and effective opportunity of being heard is bad in law, inasmuch as the same is in violation of the principles of natural justice, and is therefore liable to be deleted in toto. 2. The very reopening of assessment being wholly illegal and unsustainable, the CIT(A) ought to have quashed the order of reassessment. 3. Merits 3.1. The CIT(A) erred in confirming the addition of Rs.1,31,235/-by treating 8°/a of cash deposits and receipts as turnover and estimating the income u/s.44AD without proper verification or basis. 3.2. The CIT(A) erred in sustaining the inclusion of Rs.1,11,408/-as part of turnover despite the same being already considered, resulting in duplication of income. 3.3. The CIT(A) erred in not appreciating that the cash deposits represented explained sources including withdrawals, borrowings and business circulation, and hence could not be treated as undisclosed turnover. 3.4. The CIT(A) erred in confirming the addition of Rs.10,00,000/- u/s.69 as unexplained investment without considering the availability of funds including disclosed income and other explained sources. 4. The Appellant craves leave to add, amend, alter or withdraw any of the above grounds at the time of hearing.

3.

Briefly stated, the assessment proceedings were initiated u/s. 147 of the Act on the basis of information relating to certain financial transactions during the Financial Year 2017-18 relevant to the Assessment Year 2018-19. The information included cash deposits of Rs.38,02,540/- in one or more bank accounts maintained with The South Indian Bank Limited, purchase of immovable property amounting to

ITA No. 1848/Chny/2026 (AY 2018-19) Manjunatha Gurappa Vs ITO W (1) :: 3 :: Rs.1,20,00,000/- as reported by the Sub-Registrar’s Office, Hosur, insurance commission of Rs.2,639/- reported by LIC of India, and payments of Rs.1,11,408/- reported by CK Airtech India Private Limited u/s. 194C of the Act. In the assessment proceedings, the Assessing Officer passed an order u/s. 147 read with Section 144 of the Act, making an addition of Rs.10,00,000/- u/s. 69 of the Act towards unexplained investment and an addition of Rs.1,31,235/- towards estimated business income. 4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). It is noted from the impugned order that, despite issuance of three notices, the assessee neither appeared before the Ld.CIT(A) nor filed any written submissions. Consequently, the Ld. CIT(A) proceeded to dispose of the appeal ex parte and upheld the additions made by the Assessing Officer. 5. Before us, the assessee has challenged the order of the Ld.CIT(A), inter alia, on the ground that the appeal was disposed of ex-parte without adequate and effective opportunity of being heard. The assessee has also raised various grounds challenging the additions on merits, including the alleged duplication of turnover and the explanation regarding the sources of cash deposits and investment. 6. We have considered the facts and circumstances of the case and the nature of the disputes raised in the grounds of appeal. We note that the Ld. CIT(A) disposed of the appeal without the

ITA No. 1848/Chny/2026 (AY 2018-19) Manjunatha Gurappa Vs ITO W (1) :: 4 :: benefit of any appearance or written submissions from the assessee. Although the record indicates that three notices were issued by the appellate authority, the assessee did not participate in the appellate proceedings. At the same time, the issues raised in the appeal involve questions concerning the validity of reassessment proceedings, the computation of business income, the alleged duplication of receipts, and the source of investment, which require consideration of the relevant facts and supporting material. 7. In the interest of substantial justice and to ensure that the issues in dispute are adjudicated after affording an effective opportunity of hearing, we deem it appropriate to set aside the impugned order passed by the Ld. CIT(A) and restore the matter to the file of the Ld. CIT(A) for fresh adjudication. The assessee shall be afforded one final opportunity to prosecute the appeal and to place on record the relevant documents, explanations and written submissions in support of the grounds raised. 8. We make it clear that the assessee shall avail himself of this final opportunity and extend full cooperation in the appellate proceedings. The assessee shall duly respond to the notices issued by the Ld. CIT(A) and furnish the requisite details and supporting evidence within the time allowed. In the event of failure on the part of the assessee to avail this final opportunity or to comply with the directions of the Ld. CIT(A), the Ld.

ITA No. 1848/Chny/2026 (AY 2018-19) Manjunatha Gurappa Vs ITO W (1) :: 5 :: CIT(A) shall be at liberty to decide the appeal on the basis of the material available on record, in accordance with law. 9. The Ld.CIT(A) is directed to adjudicate the appeal afresh, after granting the assessee an effective opportunity of being heard, and to pass a speaking order in accordance with law. All grounds raised by the assessee, including those relating to the validity of reassessment proceedings and the additions made on merits, shall be considered and adjudicated independently on the basis of the material available on record and the submissions, if any, furnished by the assessee. We clarify that we have not expressed any opinion on the merits of the issues raised in the appeal, and all contentions of the parties are left open. 10. In the result, the appeal of 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 SANDEE Digitally signed SNDP, Sr. PS by SANDEEP P KUMAR Date: 2026.10.16 KUMAR 11:28:47 +05'30'

ITA No. 1848/Chny/2026 (AY 2018-19) Manjunatha Gurappa Vs ITO W (1) :: 6 :: आदेश क ��त,ल-प अ.े-षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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