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Facts
The assessee deposited a large sum of cash into his bank account but failed to file a return of income or explain the source of funds. The Assessing Officer (AO) reopened the assessment and passed an ex-parte order, which was confirmed by the CIT(A).
Held
The Tribunal noted that the AO and CIT(A) passed ex-parte orders due to the assessee's failure to provide evidence. However, considering the principles of natural justice, the Tribunal granted one more opportunity to the assessee to substantiate their case.
Key Issues
Whether the assessee should be granted a further opportunity to explain the source of cash deposits, despite previous ex-parte orders by the AO and CIT(A)?
Sections Cited
147, 144, 143(3)
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeals filed by the assessee for Assessment Years (AY) 2017-18 & 2020-21 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 11.07.2025 & 14.07.2025 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s 144 of the Income-tax Act, 1961 (hereinafter “the Act”) dated 27.12.2024 & 30.12.2024, respectively.
& 2457/Chny/2025 Manikadar Vasim Raja :- 2 -:
The facts in both the appeals of the assessee are identical and issues are common hence, we proceed to pass a common order. For brevity, we shall take up the appeal in for A.Y 2017-18 as lead case.
ITA No.2456/Chny/2025:
3. The assessee has deposited cash of Rs 77,64,529/- in his bank account maintained with City Union Bank, but has not filed return of income for the relevant A.Y. The AO therefore reopened assessment, and passed order ex-parte u/s.144 of the Act, assessing total income at Rs.77,64,529/-, as the assessee failed to explain the source of funds for transactions reflected in his bank account. Aggrieved, the assessee preferred an appeal before Ld. CIT(A). The Ld. CIT(A) has confirmed the addition as the assessee did not file any specific details regarding cash deposits in the bank account.
The Ld. Authorized Representative (A.R) of the assessee has submitted that the A.O. had given only three days’ time to respond to the show-cause notice and thereafter passed the order ex parte u/s 147 r.w.s. 144 of the Act. It was further submitted that the Ld. CIT(A)
1. also dismissed the appeal ex parte. Therefore, in the interest of justice, & 2457/Chny/2025 Manikadar Vasim Raja :- 3 -: it was prayed that one more opportunity may be granted to the assessee to substantiate its case.
On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
We have heard the rival submissions, and perused the materials available on record. We find that the A.O and Ld. CIT(A) passed orders ex-parte as the assessee failed to furnish evidence regarding cash deposits made in his bank account of Rs. 77,64,529. It is noted that the assessee has been negligent in pursuing the matter both before the A.O and the Ld. CIT(A). However, keeping in view the principles of natural justice, we are of the opinion that one more opportunity should be granted to the assessee to substantiate his case before the A.O. Accordingly, we set aside the impugned order and remit the matter back to the file of the A.O for denovo assessment in accordance with law, after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to comply with all the notices issued by the A.O and furnish all relevant details for fresh consideration. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
& 2457/Chny/2025 Manikadar Vasim Raja :- 4 -:
6. We find that an identical facts on ex-parte order is there in also, and accordingly, our adjudication in mutatis mutandis applies therein as well. Therefore, for similar reasons, we remit this matter also back to the file of the A.O for de novo assessment in accordance with law.
In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced on 28th day of November, 2025 at Chennai.