PONNUSAMY KRISHNAN SENTHILNATHAN,SALEM vs. ITO, WARD 1(1) , SALEM, COIMBATORE

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ITA 4211/CHNY/2026Status: DisposedITAT Chennai05 November 2026AY 2023-244 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the AO had passed an order based on available information and partial submissions, and the CIT(A) dismissed the appeal ex-parte due to the assessee's non-compliance. In the interest of justice, the Tribunal decided to provide one more opportunity to the assessee, considering the non-participation in appellate proceedings. The Tribunal set aside the order of the Ld. CIT(A) and remitted the matter back to the file of the Ld. CIT(A) to adjudicate the matter on merits after providing a reasonable opportunity to the assessee. The assessee was directed to be diligent and file written submissions and relevant documents. The issue of sustaining the disallowance of agricultural income was not decided on merits.

What were the facts?

The assessee, Ponnusamy Krishnan, an individual engaged in agricultural operations and horticulture business, filed a return for AY 2023-24 declaring a total income of Rs.9,69,460/- including exempt agricultural income. The Assessing Officer (AO), NFAC, Delhi, selected the case for scrutiny to verify large agricultural income. The AO disallowed the entire declared agricultural income of Rs.1,14,70,917/- for failure to substantiate with requisite documents and added it to the assessee's total income as 'Income from Other Sources'. The assessee appealed to the CIT(A), NFAC, Delhi. The CIT(A) passed an ex-parte order confirming the AO's order due to the assessee's non-response to four hearing opportunities.

What were the issues?

1. Whether the Learned Commissioner of Income Tax (Appeals) erred in sustaining the disallowance of the entire claim of agricultural income reported at Rs.1,14,70,917/- and consequently erred in sustaining the addition of such sum as income of the assessee under the head “Income from Other Sources” without assigning proper reasons and justification (Question of law and fact, turning on Section 143(3) of the Income-tax Act, 1961). Assessee's contentions: The Ld. AR submitted that the Ld. CIT(A) erred in sustaining the disallowance and addition without proper reasons and justification. The Ld. AR prayed to set aside the order and remit the issue to the AO, assuring effective representation before the AO. Revenue's contentions: The Ld. DR submitted that the assessee was given sufficient opportunity and there was no error in the Ld. CIT(A)'s order, praying for its confirmation.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 10(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA

Hearing: 12.10.2026Pronounced: 05.11.2026

आदेश /O R D E R

PER S. R. RAGHUNATHA, AM :

The present appeal has been preferred by the assessee against the order dated 09.07.2026 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the Ld. CIT(A)”], arising from the assessment order dated 25.03.2026 passed by the Assessing Officer, NFAC, Delhi [hereinafter referred to as “the AO”], u/s.143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the Assessment Year (A.Y) 2023-24.

:-2-: ITA. No.4211/Chny/2026 2. Brief facts of the case are that the assessee is an individual, engaged in agricultural operations on self-owned agricultural lands situated in Salem District, Tamil Nadu and the assessee also carries on business under the trade name Crown Nursery Garden, which is involved in horticulture, growing ornamental plants, mango cultivation, and allied agricultural activities and has filed his return of income for AY 2023-24 on 10.12.2024, declaring a total income of Rs.9,69,460/- alongwith exempt agricultural income u/s.10(1) of the Act. The case was selected for scrutiny under CASS to verify large agricultural income (Non-business ITR), accordingly, statutory notices were issued to the assessee and by calling for details. In response, the assessee submitted written submission along with supporting documents for verification. On perusal of the documentary evidence submitted by the assessee and the material available on record, the AO observed that the assessee failed to conclusively establish the quantum of agricultural income declared, amounting to Rs.1,14,70,917/- (entire gross agricultural receipts). Owing to the non-production of requisite supporting documents to substantiate his claim, the AO disallowed the entire agricultural income(gross receipts). Consequently, the AO completed the assessment vide order passed u/s.143(3) of the Act dated 25.03.2026, treating the sum of Rs.1,14,70,917/- as 'Income from Other Sources' and adding the same to the total income of the assessee.

3.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) on 05.04.2026.

4.

At the outset, we observed that ld.CIT(A) has provided four opportunities for the assessee to appear for hearings as detailed in paragraph 3.1 of the ld.CIT(A) order to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence the ld.CIT(A) passed an ex-parte order dated 09.07.2026 by confirming the order of the AO. Aggrieved by the impugned order of the Ld.CIT(A), the assessee is in appeal before us.

:-3-: ITA. No.4211/Chny/2026

5.

The ld.AR submitted that the ld.CIT(A) erred in sustaining the disallowance of the entire claim of agricultural income reported at Rs.1,14,70,917/- and consequently erred in sustaining the addition of such sum as income of the assessee under the head “Income from Other Sources” in the computation of taxable income without assigning proper reasons and justification. In view of the above, the ld.AR prayed that the Tribunal may be pleased to set aside the order of ld.CIT(A) and remit the issues to the file of AO. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the AO to complete the assessment proceedings effectively.

6.

Per contra, the ld.DR submitted that the assessee has already been given sufficient opportunity and there is no error in the order of the ld.CIT(A) and hence, prayed for confirming the order of the ld.CIT(A).

7.

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed an order by considering the information available with the department and partly submission made by the assessee and on appeal the same has been dismissed by the ld.CIT(A), NFAC due to non-compliance of the assessee.

8.

Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the assessee as the assessee had not participated in the appellate proceedings and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter on merits in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.

:-4-: ITA. No.4211/Chny/2026 9. In the result, appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open court on 05th November, 2026 at Chennai.

Sd/- Sd/- (एस एस 'व(वने) र'व) (एस. आर. रघुनाथा) (S.S. VISWANETHRA RAVI) (S. R. RAGHUNATHA) �या�यक सद+य/Judicial Member लेखासद+य/Accountant Member

चे�ई/Chennai, EJTADA िदनांक/Dated, the 05th November, 2026 Digitally signed by EJTADA DURGA NARESH Devadas DURGA Date: 2026.11.10 16:58:38 NARESH +05'30' आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3.आयकर आयु<त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 'वभागीय ��त�न�ध/DR 5. गाड� फाईल/GF

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