Kumaresan Muthukrishnan Vs ITO (ITAT Chennai)
NRI Gets One More Chance—With Cost: ITAT Sets Aside 68 Addition on Cash Gifts, Remands Matter to CIT(A)
The Chennai ITAT has condoned a delay of 648 days and set aside the ex-parte order of CIT(A), granting the Non-Resident Assessee one final opportunity to substantiate his claim relating to cash deposits treated as unexplained u/s 68 for AY 2020-21.
The Assessee, a Non-Resident Indian residing in Canada, had deposited ₹11.26 lakh in his joint ICICI Bank account during FY 2019-20. He claimed that the amount represented gifts from his father-in-law and wife, but failed to produce supporting evidence during assessment. The AO, not convinced with the explanation, treated the deposits as unexplained cash credits u/s 68 and completed assessment u/s 143(3) r.w.s. 144C(3). The CIT(A) confirmed the addition ex-parte due to non-appearance.
Before the Tribunal, the Assessee explained the delay and non-prosecution on account of overseas residence, lack of physical service of appellate order & reliance on earlier consultant. Accepting these as reasonable cause, the ITAT:
- Condoned the inordinate delay,
- Noted denial of effective opportunity,
- Set aside the CIT(A) order, and
- Remanded the matter to CIT(A) for fresh adjudication after granting reasonable opportunity.
To balance equities and discourage laxity, the ITAT imposed a cost of ₹10,000, payable to the State Legal Aid Authority, Madras High Court, with proof to be filed within 30 days.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
