DHANAPAL SETTU,TIRUVANNAMALAI vs. ITO, WARD-1,, TIRUVANNAMALAI

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ITA 607/CHNY/2025Status: DisposedITAT Chennai08 May 2025AY 2015-164 pages
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What did the Tribunal hold?

The Tribunal noted that Ground No. 2 raised by the assessee before the CIT(A), which challenged the validity of the reopening of assessment under Section 147 read with Section 149(1) of the Act, was not adjudicated by the CIT(A). The CIT(A)'s order did not address this specific ground. Therefore, the Tribunal restored the matter back to the file of the CIT(A) with a direction to adjudicate Ground No. 2. The CIT(A) is required to pass a reasoned order after providing the assessee with a due opportunity of hearing, in accordance with the law. The Tribunal also directed the assessee to cooperate with the proceedings and appear before the CIT(A) on the date of hearing. The appeal filed by the assessee was allowed for statistical purposes.

What were the facts?

The assessee, Dhanapal Settu, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Chennai, against the order of the Commissioner of Income Tax (Appeals) - Non-Faceless, Delhi. The assessment year in question is 2015-16. The Assessing Officer (AO) reopened the assessment under Section 147 read with Section 144B of the Income-tax Act, 1961, based on a cash deposit of Rs. 52,00,000/- in the assessee's bank account. The AO made an addition of Rs. 26,00,000/- under Section 69A of the Act, considering this amount as unexplained cash. The assessee challenged the validity of the reopening before the CIT(A), arguing that the notice under Section 148 was issued beyond three years from the end of the relevant assessment year and that the alleged escaped income was below Rs. 50 lakhs, making the reopening invalid under Section 147 read with Section 149(1) of the Act.

What were the issues?

1. Whether the reopening of assessment for Assessment Year 2015-16 by issuing notice under Section 148 on 02.04.2022 is invalid, considering it was issued beyond three years from the end of the assessment year and the alleged escaped income was below Rs. 50 lakhs, as per the provisions of Section 147 read with Section 149(1) of the Income-tax Act, 1961? Assessee's Contentions: - The assessee argued that the reopening of assessment was invalid because the notice under Section 148 was issued on 02.04.2022 for AY 2015-16, which is beyond three years from the end of the relevant assessment year. Furthermore, since the alleged escaped income was below Rs. 50 lakhs, the reopening was invalid under Section 147 read with Section 149(1) of the Act. - The assessee's Authorized Representative (AR) further argued that the CIT(A) had not adjudicated this specific ground of appeal and had erroneously confirmed the addition made by the AO. Revenue's Contentions: - The Departmental Representative (DR) relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69A,Section 148,Section 149(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH

Hearing: 23.04.2025Pronounced: 08.05.2025

आदेश / O R D E R

PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2015-16 arises out of the order of Learned Commissioner of Income Tax, Appeal (NFAC), Delhi [hereinafter “CIT(A)”] dated 17.01.2025 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 147 r.w.s 144B of the Income-tax Act, 1961 (hereinafter “the Act”) dated 15.02.2024.

2.

The A.O has reopened the assessment on the ground that there was a cash deposit of Rs. 52,00,000/- in the bank account and made addition of Rs.26,00,000/- u/s. 69A of the Act in the assessment order passed after concluding that only Rs.26,00,000/- represented unexplained cash. On appeal before the Ld. CIT(A), the assessee has raised ground No.2, challenging the validity of the reopening of assessment that the notice u/s. 148 of the Act was issued on 02.04.2022 for the A.Y 2015-16, which was beyond three years from the end of the relevant assessment year and since, the alleged escaped income was below Rs. 50 lakhs, the reopening was invalid under the provisions of Section 147 r.w.s 149(1) of the Act.

3.

The Ld. Authorized Representative (A.R) of the assessee has argued that the Ld. CIT(A) had not adjudicated the above ground and confirmed the addition made by the A.O.

4.

On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities.

5.

We have heard the rival submissions, and perused the materials available on record. We note that ground No.2 raised before the Ld. CIT(A) was as under:

1.

“2. The appellant submits that the assessment was re-opened by issue of notice u/s. 148 on 02.04.2022 for the assessment year 2015-16 after expiry of the three years from the end of the assessment year even though the alleged escaped income was below Rs. 50 lakhs which is invalid and against the provisions of section 147 r.w.s 149(1) of the Act.”

6.

It is evident from the appeal order passed by Ld CIT(A) that the above ground was not adjudicated by the Ld. CIT(A). Therefore, we restore the matter back to the file of Ld CIT(A) to adjudicate the ground No.2 raised in appeal. The Ld. CIT(A) shall pass a reasoned order after providing due opportunity of hearing to the assessee, in accordance with law. We also direct the assessee to cooperate with the proceedings and appear before the Ld. CIT(A) on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.

7.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 08th May, 2025.

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