KARTHI VENKATACHALAM,DINDIGUL vs. DCIT, NON CORPORATE CIRCLE-2, MADURAI

This appeal filed by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 06.06.2025 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2020-21.

Brief facts of the case are as follows: The assessee is an individual engaged in the business of servicing as an 2 -: agent/distributor to ITC products, running restaurant as a franchisee to Adayar Ananda Bhawan and also running a petrol bunk on behalf of BPCL. For the assessment year 2020-21, assessee had filed his return of income on 13.02.2021 declaring total income of Rs.49,50,380/-. The assessment was reopened by issuing notice u/s.148 of the Act on 13.05.2024. Subsequently, the AO completed the reassessment vide order dated 04.03.2025. The AO made addition of Rs.3,22,511/- u/s.69A r.w.s.115BBE of the Act and making adhoc disallowance of 20% expenditure of Rs.6,96,350/- since same was not verifiable (disallowance of Rs.1,39,271/-).

Aggrieved, assessee filed appeal before the First Appellate Authority (FAA). The FAA reduced the addition of Rs.3,22,511/- to Rs.2,22,511/- and confirmed the disallowance of expenditure of Rs.1,39,271/-.

Aggrieved, assessee has filed the present appeal before the Tribunal. The Ld.AR submitted that assessee had given only partial response to the show-cause notices issued during the course of assessment proceedings. Further, it was submitted that before FAA though written submissions was furnished, there was no supporting evidences. Therefore, it was prayed that in 3 -: the interest of justice and equity, the issues raised in this appeal may be restored to the files of the AO.

The Ld.DR supported the order of the FAA.

We have heard the rival submissions and perused the material available on record. The Ld. AR fairly submitted that the assessee could not produce complete details before the AO during the course of assessment proceedings and, therefore, prayed that one more opportunity may be granted to the assessee to furnish the requisite particulars to substantiate his claim. Considering the submissions of the Ld. AR and in the interest of justice and fair play, we deem it appropriate to grant one final opportunity to the assessee to furnish the necessary details before the AO to substantiate his claim. Accordingly, the issues raised before us are restored to the file of the AO for fresh adjudication. The AO shall afford reasonable opportunity of being heard to the assessee and decide the issues afresh in accordance with law. The assessee is directed to file all requisite details, extend full cooperation to the Revenue authorities, and shall not seek unnecessary adjournments.