Chennai ITAT Vacates Ex-Parte Order on High-Value Share Trading Additions, Directs De Novo Assessment

The Income Tax Appellate Tribunal (ITAT), Chennai, in a recent ruling, has provided relief to an assessee facing substantial additions due to non-compliance during assessment proceedings. The Tribunal set aside the order passed by the National Faceless Appeal Centre (NFAC) and restored the matter to the file of the Assessing Officer (AO) for fresh adjudication.

The case, titled Muthiah Lakshmanan Vs ITO, highlights the importance of adhering to principles of natural justice, even when the assessee has been initially negligent in responding to statutory notices.

Factual Matrix of the Case

The dispute pertains to the Assessment Year (A.Y.) 2022-23. The assessee is an individual investor actively engaged in the trading of equities. These trading activities were conducted through various brokerage platforms, specifically ICICI Direct, Zerodha, and Kotak Securities.

For the year under consideration, the assessee filed a return of income declaring a total income of Nil. However, the data available with the revenue department painted a different picture regarding the volume of transactions.