BABU VELU,CHENNAI vs. ACIT, CORP. CRICLE 9(1), CHENNAI

That only on 22.12.2023, upon receipt of the letter in the message of phone, I realized that the appeal before the Hon'ble ITAT, Chennai, owing to the reasons stated above could not be filed and I immediately took steps to file the appeal before the Hon'ble ITAT, Chennai’’.

Brief facts of the case are that assessee is an individual engaged in the business of services of cosmetology (beauty parlour). It was found that assessee had made cash deposits of Rs.11,26,000/- during the demonetization period in the Axis Bank account Rs.11,06,000/- and HDFC Bank account Rs.20,000/-. The ld. Assessing Officer found that assessee did not file his return of income for the assessment year 2017-18 within the due date. A notice u/s.142(1) of the Act was issued to the assessee on 09.03.2018 directing to file the return of income on or before 31.03.2018. The assessee filed belated return of income in response to notice issued u/s.142(1) of the Act on 09.04.2018 declaring a total income of Rs.5,30,120/-. The ld. Assessing Officer noted that in column no.13 (a) & 13 (b) of return of income filed, assessee did not provide any details regarding cash deposits of Rs.11,26,000/-. A notice u/s.143(2) of the Act dated 30.09.2019 was issued to the assessee which was duly served. Further, a notice 142(1) of the Act dated 25.10.2019 was also issued alongwith questionnaire and the same was duly served on the assessee. Since there was no compliance from the assessee’s side, the ld. Assessing Officer added a sum of Rs.11,26,000/- as unexplained money u/s.69A of the Act to the total income of the assessee. Aggrieved, assessee preferred an appeal before the ld. CIT(A).

The CIT(A) also confirmed the action of the AO for the reason that the assessee has not filed any reply to the notices issued. Aggrieved, assessee preferred an appeal before the Tribunal.

Now before me, the ld.counsel for the assessee submitted that the assessment was framed ex-parte and best judgment assessment u/s.144 of the Act assessing the cash deposits made by assessee amounting to Rs.11,26,000/- as unexplained money and hence he requested to setting aside the appeal to the file of the ld. Assessing Officer.

I have heard rival contentions and gone through facts and circumstances of the case. I noted that the assessee was provided many opportunities by both the authorities below but assessee did not avail the opportunities but in the interest of natural justice, I am of the view that to do substantial justice one more opportunity be provided to the assessee to represent the true and clear facts before the AO and hence, I set aside the orders of the lower authorities i.e., the AO and the CIT(A) and remand the matter back to the file of the AO with a cost of Rs.10,000/- to be paid to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras on or before 26.04.2024. The assessee will pay this cost and produce the receipt before the AO. In term of the above, the orders of the lower authorities are set aside and matter restored back to the file of the AO for fresh adjudication. Needless to say that the AO will allow reasonable opportunity of being heard to the assessee and assessee is also directed to represent his case as and when notice is issued, otherwise adverse view can be taken against the assessee.

In the result, the appeal of the assessee in 2017-2018 is allowed for statistical purpose. Order pronounced in the open court at the time of hearing on 21st day of February, 2024, at Chennai.