M/S. RAKTIKANTA PANDA NIRANJAN PANDA,CHENNAI vs. ITO, NCW-22(4), CHENNAI
आयकर अपीलीय अिधकरण, ’बी’ Ɋायपीठ, चेɄई
IN THE INCOME-TAX APPELLATE TRIBUNAL ‘B’ BENCH, CHENNAI
ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी अिमताभ शुƑा, लेखा सद˟ के समƗ
Before Shri S.S. Viswanethra Ravi, Judicial Member &
Shri Amitabh Shukla, Accountant Member
आयकर अपील सं./I.T.A. No.1781/Chny/2025
िनधाŊरण वषŊ/Assessment Year: 2012-13
Raktikanta Panda Niranjan Panda,
No. B, 301, Block B, TVS Emerald
Green Hills, No. 345/2B,
Nedungundram, NGO Nagar,
Alapakkam, Perungalathur,
Chennai 600 063. [PAN:ADJPN9359H]
Vs. The Income Tax Officer,
Non Corporate Ward 22(4),
Tambaram.
(अपीलाथŎ/Appellant)
(ŮȑथŎ/Respondent)
अपीलाथŎ की ओर से / Appellant by :
Shri Y. Sridhar, F.C.A.
ŮȑथŎ की ओर से/Respondent by :
Dr. M. Mohan Babu, Addl. CIT
सुनवाई की तारीख/ Date of hearing :
09.10.2025
घोषणा की तारीख /Date of Pronouncement
:
24.10.2025
आदेश /O R D E R
PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 10.06.2024 passed by the ld. Commissioner of Income Tax
(Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2012-13. 2. We find that this appeal is filed with a delay of 293 days. The assessee filed an affidavit for condonation of delay stating the reasons.
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Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication.
The assessee raised 7 grounds of appeal, amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in enhancing the addition of cash deposits to an extent of ₹.32,05,000/- as against ₹.28,47,000/- made by the Assessing Officer.
The ld. AR Shri Y. Sridhar, F.C.A. argued that the ld. CIT(A) erred in law in enhancing the cash deposit suo motu without providing proper opportunity of being heard under section 251(1)(a) of the Income Tax Act, 1961 [“Act” in short]. He argued vehemently that the enhancement is not at all maintainable as the ld. CIT(A) did not follow the due procedure as contemplated under law. He drew our attention to the impugned order and submits that nowhere in the impugned order showing that the ld. CIT(A) has given opportunity of being heard regarding enhancement of income of the assessee. He argued vehemently that the addition made by the ld. CIT(A) to an extent of enhancement is not maintainable and prayed to delete the same.
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The ld. DR Dr. M. Mohan Babu, Addl. CIT fairly conceded that nothing is mentioned in the impugned order, but, however, the assessee is present during the course of appellate proceedings, which clearly shows the assessee is within the knowledge of issue regarding the enhancement. He argued that the ld. CIT(A) followed due procedure as contemplated under law. He prayed to dismiss the ground raised by the assessee.
Heard both the parties and perused the material available on record. As rightly pointed out by the ld. AR that there was no reference or discussion by the ld. CIT(A) in the text of the impugned order that he show-caused the assessee as contemplated under law for enhancement of income. Further, sub-section (2) of section 251 of the Act clearly explains that the JCIT(A)/CIT(A) shall not enhance the assessment unless the assessee has had reasonable opportunity of showing cause against such enhancement. Admittedly, there was no show-cause notice issued by the ld. CIT(A) reflecting in the impugned order. Therefore, the enhancement made by the ld. CIT(A) is not justified and accordingly, the same is deleted. Thus, ground No. 3 raised by the assessee is allowed.
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7. Ground Nos. 2, 4, 5 & 6 raised by the assessee, we note that the assessee filed details of withdrawal from firm’s bank account and deposits into proprietor’s bank account. We note that the withdrawals from firm’s account is ₹.40,60,000/- and deposits were only
₹.26,95,000/-. The Assessing Officer only made the addition with regard to deposits made into the assessee’s account [Proprietor’s account], but, no addition made with reference to balance amount. In this regard, the assessee clearly stated before the both the authorities below, which is clear from para 6.2 of the impugned order that the said cash deposit into the assessee’s account were out of cash withdrawn from the firm in which he is a partner, the cash deposited into his account was utilized to make payments to labourers engaged by the firm. The assessee also furnished bank statement of the firm as well as his own bank statement before the ld. CIT(A) and we find the same before us from page 3 to 31 of the paper book. We note the firm’s bank account is in Canara Bank of Teynampet Branch from pages 3 to 5 of the paper book, wherein, it is clear from the cheque withdrawals on 23.04.2011 to 28.03.2012. Further, the assessee made deposits into his savings account in State Bank of India, Thirumudivakkam Branch and we find no dispute with regard to withdrawals and cash deposits,
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however, the addition was made by the Assessing Officer only on account of that there is no need to redeposit the cash in assessee’s savings bank account or that he could have transferred the amount from firm’s account to his savings account through banking channels.
We find the explanation given by the assessee that a firm by name
Aloknath Enterprises, labour contractor for civil constructions in and around city of Chennai and also some other locations. All the labourers engaged by them are from State of Orissa and their families living in the State of Orissa. The assessee, as a partner of the firm used to withdraw the monies from his ATM card and pay wages to the labourers, which enables the said labourers to deposit the said monies for their families in the state of Orissa. The ld. AR also submits that the assessee still into the said business and no addition is made in the subsequent assessment years. Therefore, we force in the arguments of the ld. AR that the cash deposits were out of cheque withdrawals from firm’s account and deposit the same into his savings bank account, in turn, cash withdrawals are made to make the payments towards labour wages. Thus, the order of the ld. CIT(A) is not justified in confirming the addition made by the Assessing Officer under section I.T.A. No.1781/Chny/25
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68 of the Act by modifying under section 69A of the Act. Thus, ground
No. 2, 4, 5 & 6 are allowed.
In the result, the appeal filed by the assessee is allowed. Order pronounced on 24th October, 2025 at Chennai. (AMITABH SHUKLA) ACCOUNTANT MEMBER Chennai, Dated, 24.10.2025
Vm/-
आदेश की Ůितिलिप अŤेिषत/Copy to:
1. अपीलाथŎ/Appellant,
2.ŮȑथŎ/ Respondent,
3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem
4. िवभागीय Ůितिनिध/DR &
5. गाडŊ फाईल/GF.