Rathinasamy Sivasankaran Vs ITO (ITAT Chennai)
ITAT Restores ₹31.29 Lakh Unexplained Investment Addition; CIT(A) Faulted for Passing Order on Same Day as Response Deadline
The Chennai ITAT set aside an ex parte reassessment involving an addition of ₹31.29 lakh as unexplained investment under section 69 read with section 115BBE, holding that the assessee deserved one more opportunity to present his case, especially when the CIT(A) passed the appellate order on the very date fixed as the deadline for filing submissions.
The assessee, engaged in real estate consultancy and brokerage services, had not filed a return of income for AY 2020-21. Based on information that he had purchased immovable property worth ₹31.29 lakh, the assessment was reopened under section 147. Since the assessee did not respond to the notices issued during reassessment proceedings, the AO completed the assessment ex parte under sections 147 and 144 and treated the entire investment as unexplained under section 69.
Before the Tribunal, the assessee pointed out that while the CIT(A) had fixed the appeal for hearing on 16.01.2026 with a response due date of 23.01.2026, the appellate order itself was passed on 23.01.2026, before the assessee’s submissions could effectively be placed on record. It was also argued that neither the assessment nor the appellate proceedings had examined the matter on the basis of complete facts and supporting evidence.
Accepting the plea, the Tribunal observed that although there had been lapses on the assessee’s part, substantial justice should prevail over technical considerations, particularly where significant additions under section 69 read with section 115BBE are involved. Accordingly, the Tribunal set aside the orders of both the AO and the CIT(A) and remanded the matter to the AO for de novo adjudication after granting adequate opportunity of hearing. The assessee was directed to fully cooperate and furnish all documents and evidence called for during the fresh proceedings.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
The present appeal is filed by the assessee against the order dated 23.01.2026 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 11.02.2025 passed u/s.147 r.w.s.144 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), pertaining to Assessment Year (A.Y.) 2020-21.
