Jayabalan Kumaresan Vs ITO (ITAT Chennai)
Income Tax Appellate Tribunal (ITAT), Chennai bench, has imposed a cost of ₹10,000 on taxpayer Jayabalan Kumaresan for failing to appear during appeal hearings before the Commissioner of Income Tax (Appeals) [CIT(A)]. The tribunal has also remitted the case concerning additions made by the Assessing Officer (AO) related to cash received from the sale of gold and as gifts back to the CIT(A) for fresh adjudication. The ITAT’s decision came in response to the taxpayer’s appeal against an ex-parte order passed by the CIT(A).
The case pertains to Assessment Year (AY) 2018-19. The Assessing Officer, in an order issued under Section 147 read with Section 144B of the Income-tax Act, 1961 on March 16, 2023, had made two significant additions to the taxpayer’s income. These additions totaled ₹58,18,200, comprising ₹22,64,000 attributed to cash received from the sale of gold and ₹35,54,200 treated as cash received as a gift.
Aggrieved by these additions, the taxpayer filed an appeal before the CIT(A), National Faceless Appeal Centre (NFAC), Delhi. The provided order notes that during the appellate proceedings, the CIT(A) issued multiple notices to the taxpayer between December 9, 2024, and January 7, 2025. However, the taxpayer reportedly did not comply with these notices or make any representation or submission before the CIT(A). Consequently, the CIT(A) proceeded to pass an ex-parte order on January 21, 2025, confirming the additions made by the Assessing Officer.
The taxpayer subsequently appealed against the CIT(A)’s order before the ITAT Chennai bench. Before the tribunal, the authorized representative (AR) for the assessee argued that the CIT(A) had issued multiple notices within a short timeframe and had dismissed the appeal without providing adequate opportunity for the taxpayer to present their case. The AR requested that, in the interest of justice, another opportunity be granted to the taxpayer to substantiate their claims before the CIT(A).
In contrast, the learned Departmental Representative (DR) relied on the orders passed by the lower authorities, supporting the additions made by the AO and confirmed by the CIT(A).
The ITAT bench considered the submissions from both sides and reviewed the available records. The tribunal noted that the AO had indeed made additions totaling ₹58,18,200 concerning cash received from gold sales and as gifts. The ITAT also acknowledged that the taxpayer had not appeared before the CIT(A), which led to the ex-parte dismissal of the appeal without a hearing on the merits of the additions.
However, the tribunal also took into account the AR’s contention that sufficient opportunity was not afforded to the taxpayer by the CIT(A). Upholding the principles of natural justice, the ITAT was of the view that the taxpayer should be given another opportunity to present their case and substantiate their position before the CIT(A).
While recognizing the need to provide a fair hearing, the ITAT also addressed the taxpayer’s non-compliance at the CIT(A) stage. To account for the inconvenience and delay caused by the taxpayer’s non-appearance, the tribunal deemed it appropriate to impose a cost. The ITAT directed the taxpayer to pay a cost of ₹10,000 to the Tamil Nadu State Legal Services Authority at the High Court of Madras. The payment is to be made within one month from the date of receiving the ITAT’s order, and the receipt of this payment must be produced before the CIT(A).
Accordingly, the ITAT set aside the ex-parte order passed by the CIT(A) and remitted the entire matter back to the file of the CIT(A). The CIT(A) has been directed to decide the issues afresh after providing the taxpayer with a proper opportunity of being heard and in accordance with the law. The ITAT also specifically directed the taxpayer to appear before the CIT(A) on the scheduled date of hearing without fail.
The tribunal clarified that the appeal filed by the assessee is allowed for statistical purposes only, indicating that the ITAT has not ruled on the merits of the additions themselves but has instead sent the case back for re-examination at the first appellate stage. The order was pronounced on April 30, 2025.
No specific judicial precedents were cited or discussed in the provided text of the ITAT order.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
