ABDUL RAHIMAN THIRIKODE CHELLAN,PALAKKAD vs. ITO WARD 5, PALAKKAD

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ITA 90/COCH/2023Status: DisposedITAT Cochin05 August 2025AY 2017-18Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI SONJOY SARMA (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the CIT(A)'s order was ex-parte and lacked details regarding hearing notices, indicating a failure to provide a reasonable opportunity to the assessee. Therefore, the matter was remanded back to the CIT(A).

What were the facts?

The assessee, engaged in the beedi business, filed an income return for AY 2017-18. The AO completed the assessment by making additions for cash deposits during demonetization and for estimated profit on undisclosed turnover. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the CIT(A) provided a reasonable opportunity of hearing to the assessee before passing an ex-parte order.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI INTURI RAMA RAO, AM & SHRI SONJOY SARMA, JM

For Appellant: Shri Padmanathan K.V., Advocate
For Respondent: Smt. Leena Lal, Sr. D.R
Hearing: 04.06.2025Pronounced: 05.08.2025

O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 14.12.2021 for Assessment Year (AY) 2017-18.

2.

Brief facts of the case are that this appeal was restored by the Hon'ble Kerala High Court vide order dated 03.09.2024 in of 2024.

Abdul Rahiman Thirikode Chellan 3. The factual background of the appeal is that the appellant is an individual engaged in the business of dealing in beedi. The return of income for AY 2017-18 was filed on 27.01.2018 declaring income of Rs. 1,04,760/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-5, Palakkad (hereinafter called "the AO") vide order dated 12.11.2019 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at total income of Rs. 3,68,940/-. While doing so, the AO made addition of Rs. 1,58,500/- being the cash deposits made in specified bank notes during demonetisation period by holding that the cash balance as on 08.11.2016 as per books account is Rs.3,08,403/- as against the total cash deposit during the demonetisation period is Rs. 4.66,500/- for the failure of the assessee to explain the balance amount of Rs. 1,58,500/- treating as unexplained money of the assessee. The AO also made addition of Rs. 1,05,680/- by estimating profit on undisclosed turnover of Rs. 31,21,100/-

4.

Being aggrieved, an appeal was filed before the CIT(A), who vide order dated 14.12.2021 dismissed the appeal.

5.

Being aggrieved, the appellant is in appeal before this Tribunal in . The Tribunal, vide order dated 31.04.2024 in had dismissed the appeal in limine on the ground of delay. Being aggrieved by this order of the Tribunal, the appellant preferred an appeal before the Hon'ble Kerala High Court. The Hon'ble High Court vide order dated

6.

When the appeal was called on the learned counsel for the assessee submitted that the CIT(A) had passed the order ignoring the submission made by the appellant. He further submitted that the AO was not correct in holding that the appellant had not disclosed the turnover. It is submitted that the difference between amount deposited in the bank account, and the sale, credited to Profit & Loss A/c. represents the component of sales tax and surcharged collected by the appellant, which does not form part of the sale turnover. It is further submitted that the cash deposits during the demonetisation period was made out of sales of beedies and, therefore, the addition is not warranted.

7.

On the other hand, the learned Sr. DR, supporting the orders of the learned lower authorities, submits that no interference is required as the CIT(A) had passed a speaking order.

8.

We have heard the rival contentions and perused the material available on record. We find that the order passed by the CIT(A) is an exparte order. The order passed by the CIT(A) does not disclose details of the hearing notices issued by the CIT(A). The CIT(A) merely recorded a finding that the appellant had failed to respond to the notices without disclosing the details as to when the hearing Abdul Rahiman Thirikode Chellan notices were issued and the mode of service of notices, etc. Thus, we are of the considered opinion that the CIT(A) had not given reasonable opportunity to the appellant to explain the case. In the circumstances, we remand the matter back to the file of the CIT(A) for de novo adjudication in accordance with law after affording reasonable opportunity of hearing to the appellant.

9.

In the result, the appeal filed by the assessee stands partly allowed for statistical purposes.

Order pronounced in the open court on 5th August, 2025.

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