VELLAIKANNU RAJAGOUNDER SUBRAMANIAM,VELLORE vs. ITO, WARD-3,, VELLORE

The assessee raised 4 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made under section 69A of the Income Tax Act, 1961 [“Act” in short] in the facts and circumstances of the case.

We note that according to the Assessing Officer, the assessee made cash deposits of ₹.4,75,000/- in State Bank of India, SME Branch and ₹.12,71,000/- in HDFC Bank Gandhi Nagar Branch during demonetization period and did not file return of income for AY 2017-18. Thus, the Assessing Officer issued notice under section 142(1) of the Act dated 17.01.2018 requiring the assessee to file return of income, but, however, the assessee did not comply with the same. However, in response to the notice under section 142(1) of the Act, the assessee filed return of income on 22.08.2018 after the expiry of time stipulated in the notice and thus, the Assessing Officer treated the ROI as invalid. After examining the bank statement obtained under section 133(6) of I.T.A. No.1307/Chny/25 3 the Act, the Assessing Officer extracted the details of cash deposit made by the assessee at page 3 & 4 of the assessment order. The Assessing Officer issued summon under section 131 of the Act on 06.08.2019 and recorded sworn statement. In the sworn statement, the assessee explained the source for cash deposits of ₹.17,46,000/- made during demonetization period and the same is extracted at page 5 of the assessment order. In the absence of documentary evidence for the source of cash deposits made by the assessee, production of sales bills, etc., the Assessing Officer treated the entire cash deposits of ₹.17,96,000/- unexplained cash deposits under section 69A r.w.s. 115BBE of the Act and added to the total income of the assessee and completed the assessment under section 144 of the Act dated 26.11.2019. On appeal, the ld. CIT(A) dismissed the appeal of the assessee since the assessee did not comply with the hearing notices or filed any documentary evidences in support of grounds of appeal.

The ld. AR Shri Abhishek Murali, C.A. submits that non- compliance to the hearing notices issued by the ld. CIT(A) is neither wilful nor deliberate but due to circumstances beyond assessee’s control. He submits that the assessee is the Proprietor of M/s. VRS Granites and the cash deposits made during demonetization period is I.T.A. No.1307/Chny/25 4 out of withdrawals, earnings and collections out of sales prior to the demonetization period. Thus, the ld. AR prayed that one more opportunity may be afforded to the assessee to pursue his case by furnishing complete details to substantiate his claim.

The ld. DR Ms. V. Supraja, Addl. CIT opposed the same and drew our attention to para 5 of the impugned order and argued that the ld. CIT(A) afforded ample opportunities to the assessee, but, it was not availed and supported the order passed by the ld. CIT(A).

Heard both the parties and perused the material on record. We note that the assessment was completed under section 144 of the Act dated 26.11.2019. On perusal of the impugned order, we note that there was no assistance from the assessee to the hearing notices issued by the ld. CIT(A). We find the assistance of assessee is necessary in terms of additions involves under section 69A of the Act. We have also noted the contention of the assessee that the Assessing Officer has not given any relief towards cash in hand prior to the demonetization period. Taking into consideration of the submissions of the ld. AR and the ld. DR and in the interest of justice, we deem it proper to afford one more opportunity and remand the matter to the file

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 18th July, 2025 at Chennai. (AMITABH SHUKLA) ACCOUNTANT MEMBER Chennai, Dated, 18.07.2025