Sri Senthil Murugan Finance Vs ITO (ITAT Chennai)
Survey-Based Reassessment and Ex-parte CIT(A) Order Set Aside with Cost – Matter Remanded
The Chennai Bench of the Income Tax Appellate Tribunal considered an appeal by a partnership firm against an order passed under section 143(3) read with section 147 for AY 2013–14. Reassessment was initiated on the basis of a survey admission by one of the partners, alleging unaccounted investment in the firm. The Assessing Officer made substantial additions towards undisclosed cash credits under section 69 and business income, resulting in an assessed income of over ₹2.64 crore.
The assessee’s appeal before the CIT(A) was dismissed primarily due to non-furnishing of explanations and supporting material, and the reassessment order was confirmed without detailed examination. Before the Tribunal, the assessee contended that adequate opportunity was not provided to reconcile voluminous survey materials and that the orders suffered from violation of principles of natural justice.
The Tribunal observed that both the assessment and appellate orders were passed without proper reconciliation or meaningful consideration of evidence, and that the dismissal of the appeal was largely on account of non-participation. While noting the assessee’s lapse, the ITAT held that substantial justice warranted one final opportunity. Accordingly, it set aside the order of the CIT(A) and remitted the matter back for fresh adjudication, directing that reasonable opportunity be granted to the assessee.
As a condition for granting relief, the Tribunal imposed costs of ₹10,000, payable to the State Legal Aid Authority, Hon’ble High Court of Madras, to ensure diligence in further proceedings. The appeal was allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT CHENNAI
