K. Ponnammal Vs ITO (ITAT Chennai)
Summary: ITAT Chennai restored the assessment of K. Ponnammal for AY 2011-12 to the Assessing Officer for fresh adjudication after finding that substantial factual and jurisdictional issues remained unexamined. Based on departmental information regarding alleged cash deposits of ₹12 lakh, the Assessing Officer had reopened the assessment under section 147 and completed an ex parte assessment under section 144, treating the deposits as unexplained money under section 69A. The CIT(A) dismissed the appeal as time-barred without deciding the merits. Before the Tribunal, the assessee’s representative submitted that she was about 85 years old, sparsely educated, dependent on her children and had died on 23 August 2026. A bank certificate dated 7 February 2025 reportedly showed cash deposits of only ₹46,100 during the relevant financial year, creating a material discrepancy with the assessed amount. The representative also disputed service of the section 148 notice and other statutory notices, and sought exclusion of the COVID limitation period when considering the stated 764-day delay.
The Tribunal held that the bank certificate’s correctness, relevance and evidentiary value, reconciliation with the information relied upon by the Assessing Officer, and the objections concerning statutory notices required examination. Considering the unexamined issues, the assessee’s circumstances and the ex parte assessment, it set aside the CIT(A)’s order dated 15 May 2026 and restored the entire assessment to the Assessing Officer for a de novo assessment after providing reasonable and effective opportunity to the assessee/legal representative. It expressed no opinion on the merits of the ₹12 lakh addition or the validity of reassessment and left all issues open. The appeal was allowed for statistical purpose.
Cases Discussed
- In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (C) No. 3 of 2020; Miscellaneous Application No. 21 of 2022 in Miscellaneous Application No. 665 of 2021, order dated 10 January 2022 (Supreme Court) — The assessee invoked the Supreme Court’s COVID limitation-extension directions while explaining the delay before the CIT(A). The Tribunal restored the assessment without determining the effective delay or expressly adopting the exclusion dates advanced by the representative.
Appellant Was Represented By : Mr. S.R.Srikrishna, CA
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal filed by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “the Ld. CIT(A)”], dated 15.05.2026, whereby the appeal filed by the assessee against the assessment order passed under section 147 read with section 144 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), for the Assessment Year 2011-12 was dismissed in limine on the ground of delay.
2. The assessee has raised the following grounds of appeal:
1. The impugned order of the Commissioner of Income-Tax (Appeals) is wrong, illegal, opposed to law, facts, judicial interpretation, principles, submissions made, details available on record, conventions and the additions sustained is to be cancelled.
2. CIT(A) HAS ERRED TO DISMISS APPEAL WITHOUT CONDONING THE DELAY: In law, facts and circumstances, the Ld. Commissioner of Income-Tax (Appeals) has erred in dismissing the appeal without condoning the delay in filing of appeal.
3. CIT(A) ERRED TO CALCULATE DELAY WITHOUT EXCLUSION OF COVID-19 PERIOD: In law, facts and circumstances, the Ld. Commissioner of Income-Tax (Appeals) has erred in calculating the delay in filing of appeal as 25 months without excluding the period covered by the Hon’ble Supreme Court’s suo motu directions in Cognizance for Extension of Limitation.
4. LACK OF JURISDICTION: In law, facts and circumstances, the Ld. CIT(A) has failed to appreciate that the Assessing Officer had assumed jurisdiction wrongly and that the assessment was reopened on incorrect facts, based on AIR information, non-service of notice under section 148 and non-issuance/service of other statutory notices, and therefore the assessment is bad in law and void.
5. ADDITION UNDER SECTION 69A READ WITH SECTION 115BBE IS INCORRECT: In law, facts and circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals) has erred in sustaining the addition made under section 69A read with section 115BBE of the Act.
6. PRAYER: The appellant craves leave to file additional grounds of appeal/additional evidence, if any, at the time of hearing and prays that the contested addition be deleted and the tax demand be cancelled.
3. Briefly stated, the facts of the case are that, as per the information available with the Department, the assessee had made cash deposits aggregating to Rs.12,00,000/- during the Financial Year 2010-11 relevant to the Assessment Year 2011-12 in her savings bank account maintained with Bank of Maharashtra, Namakkal. It was further noted by the Assessing Officer that the assessee had not filed her return of income for the relevant assessment year. The assessment was thereafter reopened under section 147 of the Act. According to the Assessing Officer, various opportunities were afforded to the assessee to explain the nature and source of the alleged cash deposits. However, according to the assessment order, the assessee failed to furnish the requisite details/documents. Consequently, the assessment was completed ex parte under section 144 of the Act and the alleged cash deposit of Rs.12,00,000/- was treated as unexplained money under section 69A of the Act.
4. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The appeal was admittedly filed beyond the prescribed period. The Ld. CIT(A), however, was not satisfied with the explanation furnished for the delay and dismissed the appeal in limine as barred by limitation, without adjudicating the grounds raised by the assessee on the merits of the assessment and the addition made under section 69A of the Act.
Hence, the assessee is in appeal before us.
5. During the course of hearing, the Ld. Authorised Representative (“Ld. AR”) submitted that the assessee was aged about 85 years, was sparsely educated and was dependent upon her children. It was submitted that the assessee was a housewife and, according to the assessee, her income had not exceeded the basic exemption limit in the relevant year and, therefore, she had not been filing returns of income in the earlier years. It was further submitted that the assessee expired on 23.08.2026 and that a revised Form No. 36 has been filed. The Ld. AR further submitted that the very basis of the assessment, namely, the alleged cash deposit of Rs.12,00,000/-, requires verification. In this regard, reliance was placed upon a certificate dated 07.02.2025 issued by the Manager, Bank of Maharashtra, Namakkal, according to which the total cash deposits in the relevant bank accounts during the period 01.04.2010 to 31.03.2011 were stated to be only Rs.46,100/-. The Ld. AR thus submitted that there is a material discrepancy between the alleged cash deposit of Rs.12,00,000/- forming the basis of the assessment and the cash deposits reflected in the bank certificate produced by the assessee. It was submitted that this aspect could not be examined either by the Ld. CIT(A), since the appeal was dismissed in limine, or by the Tribunal in the absence of proper examination of the relevant bank records and other primary evidence. The Ld. AR also submitted that the assessment was completed ex parte under section 144 of the Act. It was contended that the assessee had not received the statutory notices/orders through e-mail and that, even as per the assessment order, the notice under section 148 dated 24.03.2018 was stated to have been served only on 25.09.2019. The assessee has disputed proper service of the statutory notices.
6. On the issue of delay, the Ld. AR submitted that although the appeal before the Ld. CIT(A) was filed after a delay of 764 days, the period covered by the orders of the Hon’ble Supreme Court extending the period of limitation on account of the COVID-19 pandemic was required to be excluded. According to the Ld. AR, after excluding the period from 15.03.2020 to 31.05.2022, the effective delay would substantially stand reduced and, in any event, the assessee had sufficient and bona fide reasons for the delay, having regard to her age, educational background and circumstances.
7. The Ld. Departmental Representative, on the other hand, supported the order of the Ld. CIT(A) and submitted that the assessee had failed to satisfactorily explain the delay in filing the appeal. He accordingly prayed that the appeal be dismissed.
8. We have heard the rival submissions and perused the material available on record. At the outset, we note that the Ld. CIT(A) has dismissed the appeal only on the ground of limitation and, consequently, the various substantive grounds raised by the assessee, including the challenge to the validity of the reassessment proceedings, service of notice under section 148, the alleged cash deposits and the addition made under section 69A of the Act, have not been adjudicated on merits. We also find that the assessee has placed before us a bank certificate dated 07.02.2025 which, according to the assessee, reflects total cash deposits of only Rs.46,100/- during the relevant financial year, as against the sum of Rs.12,00,000/- allegedly forming the basis of the addition made by the Assessing Officer. The correctness, relevance and evidentiary value of the said certificate, as well as the reconciliation of the bank accounts with the information relied upon by the Assessing Officer, require verification. Further, the assessee has raised specific contentions concerning the service of notice under section 148 and other statutory notices. These contentions also go to the root of the validity of the assessment proceedings and have not been examined on merits by the Ld. CIT(A).
9. In the facts and circumstances of the present case, we are of the considered view that substantial issues arising from the assessment remain unexamined. The dismissal of the appeal in limine has resulted in the assessee not obtaining an adjudication on the substantive issues raised by her. At the same time, the material now placed before the Tribunal, particularly the bank certificate, involves factual aspects which are more appropriately examined by the Assessing Officer after providing adequate opportunity to the assessee.
10. We are also mindful of the fact that the assessee was stated to be an elderly person and that the assessment itself was completed ex parte under section 144 of the Act. Without expressing any opinion on the merits of the addition or on the validity of the reassessment proceedings, we consider it appropriate, in the interest of substantial justice, to restore the matter to the file of the Assessing Officer for fresh adjudication. Accordingly, the order of the Ld. CIT(A) dated 15.05.2026 is set aside and the entire assessment is restored to the file of the Assessing Officer for de novo assessment in accordance with law. The Assessing Officer shall, afford reasonable and effective opportunity to the assessee/legal representative to furnish all relevant documents and explanations and thereafter pass a fresh assessment order in accordance with law, after considering all the submissions and evidence furnished by the assessee.
Needless to say, we have not expressed any opinion on the merits of the addition of Rs.12,00,000/- under section 69A of the Act or on the validity of the reassessment proceedings. All issues are left open for adjudication by the Assessing Officer in accordance with law.
11. In the result, appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on the 06th day of October, 2026 in Chennai.
