SRI SENTHIL MURUGAN FINANCE,MADURAI vs. ITO, NCW-1(7), MADURAI

This appeal by the assessee is arising out of the order dated 28.07.2025, passed by the Learned Commissioner of Income Tax (Appeal), Chennai-18 (in short “ld.CIT(A)”) for the assessment year (A.Y) 2013-14 against the order u/s.143(3) r.w.s 147 of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by the Assessing Officer (AO) dated 30.12.2019.

Brief facts of the case are that the assessee is a firm and has filed its return of income on 28.06.2014 for A.Y.2013-14, declaring total income of Rs.89,100/-. The Assessing Officer issued notice u/s.148 of the Act for the A.Y.2013-14 on 25.03.2019 on the grounds that one of the partners of the firm Shri. M.Singaram, during survey admitted unaccounted investment of Rs.43,00,000/- in the assessee firm. Further, the AO issued statutory notices to the assessee and called for details. In response to the notice, the ld.AR of the assessee submitted its reply along with details of supporting documents. On perusal of the details submitted by the assessee, the AO made an addition of Rs.2,19,71,839/- as undisclosed cash credits u/s.69 of the Act and Rs.39,54,931/- as business income by arriving a total income of Rs.2,64,59,035/- and concluded the assessment proceedings by passing an order u/s.143(3) r.w.s 147 of the Act dated 20.05.2022.

Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A), Chennai-18 on 09.01.2020.

At the outset, we observed that ld.CIT(A) has dismissed the appeal filed by the assessee due to the absence of explanation and insufficient submissions during the appeal proceedings, hence, the ld. CIT(A) passed an order dated 28.07.2025 by confirming the order of the Assessing Officer. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.

The ld.AR submitted that the ld.CIT(A) failed to appreciate that neither ld.CIT(A) nor the Assessing Officer had given adequate opportunity for reconciliation of a bunch of survey materials and hence the orders suffer from the vice of not following principles of natural justice. Therefore, the ld.AR prayed for one more opportunity to be provided to the assessee to represent his case before the ld.CIT(A) in the interest of natural justice. Further, the ld.AR assured the bench that he will undertake to represent on behalf of the assessee before the ld.CIT(A), in case one more opportunity is provided.

Per contra, we note that none appeared before us to represent the revenue’s appeal.

We have heard the ld.AR and perused the material available on record and gone through the orders of the lower authorities. We note that the Assessing Officer has passed an order without supporting documents and the same has been dismissed by the ld.CIT(A), Chennai-18 due to the assessee failing to furnish any data in support of his claim. We note that the AO has passed an order based on survey and the same has been upheld by the ld.CIT(A), Chennai-18 due to absence of explanation. Since the assessee failed to participate before the first appellate authority, we levy the cost of Rs.10,000/- to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the assessee shall satisfy the payment of cost before the authorities.

Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we are deeming it fit to provide one more opportunity to the assessee and hence we set aside the order of the ld.CIT(A) and remit the matter back to the file to ld.CIT(A) to adjudicate the matter afresh in accordance to law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so.

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