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Facts
The appellant failed to file their Income Tax Return for AY 2017-18. Information from the Insight Portal revealed significant cash deposits and withdrawals in the appellant's bank accounts. Despite notices, the appellant provided only partial information, leading the Assessing Officer to estimate the total credits in the bank accounts as income under section 69A.
Held
The Tribunal noted that the CIT(A) had quashed the Assessing Officer's order based on High Court judgments. Furthermore, retrospective amendments introduced by Budget 2026 addressed jurisdictional issues concerning the Assessing Officer and Faceless Assessing Officer. The Tribunal decided to set aside the CIT(A)'s order and restore the matter to await outcomes of Supreme Court and High Court decisions on these amendments.
Key Issues
Whether the additions made by the Assessing Officer were justified given the subsequent legislative amendments and pending court decisions on jurisdictional issues.
Sections Cited
69A, 147, 144, 144B, 148, 142(1)
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Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI INTURI RAMA RAO & SHRI MANU KUMAR GIRI
आदेश / O R D E R
PER MANU KUMAR GIRI, JM:
The captioned appeal by the revenue is arising out of the order of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi dated 06.10.2025 for AY 2017-18.
The brief facts of the case are that the appellant did not file his Income Tax Return (ITR) for the relevant Assessment Year (AY).
Information was received through the Insight Portal under the Risk (AY 2017-18) ITO (Vs.) SHANMUGANATHAN DEVASENAPATHY (:: 2 :) Management System indicating that the following transactions were recorded against the appellant’s PAN for the concerned AY:
Cash deposits (including bearer cheques) in a current account with Axis Bank Limited amounting to Rs.1,39,500/-.
Cash withdrawals (including bearer cheques) in the same current account with Axis Bank Limited amounting to Rs.1,62,36,300/-.
A notice u/s. 148 of the Act was issued by the Jurisdictional Assessing Officer (AO) on 31.03.2024; however, no response was received from the appellant. Subsequently, statutory notices u/s. 142(1), along with reminder letters, centralized communications, and show-cause notices, were issued from time to time. The appellant submitted only partial details in response.
Apart from issuing notices, AO independently obtained the appellant’s bank statements from Axis Bank Ltd. Upon examination, it was observed that the total credits in the two bank accounts maintained by the appellant amounted to Rs.4,34,08,237/-, detailed as follows:
Account No. 912010049938664 in the name of • Shanmuganathan Devasenapathy reflected cash deposits of Rs.8,49,500/- and total credits of Rs.43,81,658/-. • Account No. 915020064554977 in the name of Jeyam Foundation (a proprietorship concern of the appellant) reflected cash deposits of Rs.1,55,000/- and total credits of Rs.3,90,26,579/-. The aggregate total credits in both accounts amounted to Rs.4,34,08,237/-.
(AY 2017-18) ITO (Vs.) SHANMUGANATHAN DEVASENAPATHY (:: 3 :) Since the explanations furnished by the appellant regarding the nature and source of the aforesaid credits were found unsatisfactory, the AO completed the assessment proceedings by passing an order dated 03.03.2025 u/s.s 147 read with 144 and 144B of the Act. An addition of Rs.4,34,08,237/- was made to the appellant’s total income u/s. 69A of the Act.
Despite service of notice, no one appeared on behalf of the assessee. Accordingly, we proceed to decide the matter in the absence of the assessee.
In the present case, the ld. CIT(A), relying on the judgments of the Hon’ble Jurisdictional High Court of Madras in TVS Credit Services Ltd. vs. DCIT (WP No. 22402 of 2024 and WMP No. 13336 of 2023) and Dadha Pharma LLP vs. DCIT, Central Circle 1(4) (WP No. 35385 of 2024), as well as the decision of the Hon’ble Supreme Court in ITO Ward 5, Panvel & Ors. vs. Prakash Pandurang Patil (SLP (Civil) Diary No. 39689/2025, arising out of the judgment dated 12.08.2024 in WP No. 10749/2024 passed by the Hon’ble High Court of Bombay), quashed the impugned order dated 03.03.2025 passed by the Assessing Officer u/s. 147 read with 144 and 144B of the Act.
However, it is observed that the Budget 2026 has introduced retrospective amendments aimed at addressing and nullifying the (AY 2017-18) ITO (Vs.) SHANMUGANATHAN DEVASENAPATHY (:: 4 :) controversy concerning jurisdiction between the Jurisdictional Assessing Officer (JAO) and the Faceless Assessing Officer (FAO)
u/s.148 of the Act. These amendments have been made effective retrospectively from 1st April 2021. In view of this development, we set aside the order of the ld. CIT(A) and restore the matter to his file, directing him to await the outcome of the decisions of the Hon’ble Supreme Court and/or the concerned High Courts considering retrospective amendments and thereafter pass an order in accordance with law.
In the result, the appeal filed by the revenue is allowed for statistical purposes. Order pronounced on the 20th day of February 2026 in Chennai.
Sd/- Sd/- (इंतूरी रामा राव) (मनु कुमार िग�र) (INTURI RAMA RAO) (MANU KUMAR GIRI) लेखा सदJय/ACCOUNTANT MEMBER �या�यक सदJय/JUDICIAL MEMBER चे�नई/Chennai, Kदनांक/Dated: 20th February, 2026. SNDP, Sr. PS आदेश क� ��तLलMप अNेMषत/Copy to:
अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF