Krishnakumar Devaraj Vs ITO (ITAT Chennai)
The assessee, an individual, challenged the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, dated 28.01.2026 for the Assessment Year 2019-20. Reassessment proceedings were initiated under the Income-tax Act, 1961, during which the Assessing Officer observed that the assessee had deposited cash amounting to Rs.18,03,956 in bank accounts maintained with Dhanalakshmi Bank and Disha Microfin Limited. It was also noted that the assessee had earned interest income of Rs.2,59,029 from various banks.
According to the Assessing Officer, despite the issuance of statutory notices and show-cause notices through the Faceless Assessment Scheme, the assessee failed to provide explanations or supporting evidence regarding the source of the cash deposits and the interest income. Consequently, the cash deposits were treated as unexplained money under Section 69A read with Section 115BBE, while the interest income was also brought to tax. The assessment was completed under Sections 147, 144, and 144B, determining the total income at Rs.20,62,985.
The CIT(A) dismissed the assessee’s appeal on the ground of non-prosecution, as no written submissions or supporting documents were filed.
Before the Tribunal, the assessee sought another opportunity to furnish relevant evidence. The ITAT observed that both the assessment and the first appellate proceedings had been concluded ex parte without adjudication on merits. Considering that the additions arose primarily due to the absence of explanations and supporting documents, the Tribunal held that, in the interest of substantial justice, the assessee should be granted one final opportunity.
