ASSISSTANT COMMISSIONER OF INCOME TAX, CIRCLE LTU 1 CHENNAI, NUNGAMBAKKAM V. MS PINK CITY EXPRESSWAY PVT LTD, CHENNAI

ITA 2046/CHNY/2024

AI Insights

The case involves an appeal by the revenue against the order of the Learned Commissioner of Income Tax (Appeals), which granted relief to the assessee, M/s. Pink City Expressway Pvt Ltd. The revenue contended that the CIT(A) violated Rule 46A of the Income Tax Rules, 1962 by admitting additional evidence without allowing the Assessing Officer to submit a remand report. The Tribunal noted that the assessee had not participated in the assessment proceedings, leading to a best judgment assessment under section 144 of the Income Tax Act. The CIT(A) later admitted additional evidence which was not presented during the original assessment. The Tribunal emphasized the need for adherence to procedural rules, particularly Rule 46A, which mandates a two-stage opportunity for the Assessing Officer regarding additional evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107984 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Other Referred Cases: Manish Buildwell Pvt Ltd vs. CIT
• Laws Referred To: Income Tax Act, Income Tax Rules, 1962
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R. CLEMENT RAMESH
• Assessee Lawyers: ADMITTING FRESH
• Keywords: Condonation of delay; Set aside; Additional evidence; Charitable institution; Liquidation
• Section: 250; 251

Judgement Text

"आयकरअपीलीयअिधकरण, ‘सी’\rा यपीठ,चे\u0012ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0001ीएबीटी. वक , \u000bाियक सद\u0011 एवं एवं एवं एवं \u0015ीजगदीश, लेखासद\u001bक ेसम\u0015 BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No.2046/Chny/2024 िनधा \u001eरणवष\u001e/Assessment Year: 2016-17 Assistant Commissioner of Income Tax, Circle LTU-1, Chennai. v. M/s. Pink City Expressway Pvt Ltd., Chennai Citi Centre, 4th Floor, 10/11 Dr. Radha Krishnan, Mylapore, Chennai – 600 004. [PAN: AAECP6031F] (अपीला थ\"/Appellant) (#$थ\"/Respondent) अपीला थ\"कीओरसे/ Appellant by : Mr. R. Clement Ramesh Kumar, CIT #$थ\"कीओरसे /Respondent by : None सुनवा ईकीता रीख/Date of Hearing : 07.01.2025 घोषणा कीता रीख /Date of Pronouncement : 31.01.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the revenue against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC (hereinafter in short \"the Ld.CIT(A)”), Delhi, dated 28.12.2023 for the Assessment Year (hereinafter in short \"AY”) 2016-17. 2. At the outset, the Ld.DR submitted that there is a delay of ‘156’ days in filing of this appeal. Having perused the contents of the application for condonation of delay filed by the revenue, cause for delay is excusable and therefore, we condone the delay and proceed to adjudicate the appeal. 3. At the outset, the Ld.DR for the Department brought to our notice that despite notices to the Vikram Bajaj, having Reg.No. IBBI/IPA 2017/10003; Email ID: been made by him on behalf of the respondent this regard, we note that the notice (i.e., by Lakshmi Kishore, ACIT, LTU Emails dated 23.10.2024, 07.11.2024, 27.11.2024 been received till date from him been filed before us. Thus the IRP, for reasons best known to him, he doesn’t bother to respond/appear through a Counsel but to consider the appeal of gone through the grounds of appeal grievance of the revenue is that the Ld.CIT(A) has violated Rule 46A of the Income Tax Rules, 1962 (hereinafter in short “the Rules”) granting relief to the assessee. passed ex parte order, assessee didn’t participate during the ITA No.2720/Chny/20 UK P M Charitable Trust :: 2 :: application for condonation of delay filed by the revenue, we find that the cause for delay is excusable and therefore, we condone the delay and proceed to adjudicate the appeal. At the outset, the Ld.DR for the Department brought to our notice that despite notices to the Interim Resolution Professional , having Reg.No. IBBI/IPA-002/IP- 2017/10003; Email ID: [e-mail], no representati been made by him on behalf of the respondent (assessee company regard, we note that the notice has been issued by the Department Lakshmi Kishore, ACIT, LTU-1, Chennai) to the IRP through Emails dated 23.10.2024, 07.11.2024, 27.11.2024, but, no response has from him. Copy of the report dated 29.11.2024 ha been filed before us. Thus, we note that despite several notices issued to for reasons best known to him, he doesn’t bother to respond/appear through a Counsel. Therefore, we have no alternative er the appeal of the department filed before us grounds of appeal; and note that, one of the main grievance of the revenue is that the Ld.CIT(A) has violated Rule 46A of Rules, 1962 (hereinafter in short “the Rules”) granting relief to the assessee. And according to the Ld.DR, the AO order, [u/s. 144 of the Act (best judgment order)] assessee didn’t participate during the assessment proceedings and that /Chny/2024 (AY 2019-20) UK P M Charitable Trust we find that the cause for delay is excusable and therefore, we condone the delay and At the outset, the Ld.DR for the Department brought to our notice Resolution Professional (IRP) Shri. -N00003/2016- , no representation has assessee company). In issued by the Department ) to the IRP through no response has dated 29.11.2024 has several notices issued to for reasons best known to him, he doesn’t bother to Therefore, we have no alternative filed before us; and has one of the main grievance of the revenue is that the Ld.CIT(A) has violated Rule 46A of Rules, 1962 (hereinafter in short “the Rules”) before And according to the Ld.DR, the AO u/s. 144 of the Act (best judgment order)], since assessment proceedings and that, the Ld.CIT(A) has allowed the appe evidences before him without following Rule 46A i.e. without giving an opportunity to the AO to submit his remand submitted before him; and Ld.CIT(A) has allowed a audit report, (2) books of accounts (3) documents related to NHAI contract (4) documents related to liquidation of debtor reads as under: 46A. Production of additional evidence b (Appeals) and Commissioner (Appeals). (1)The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner whether oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely : (a)where the Assessing Officer has refused to admit evidence which ought to have been admitted ; or (b)where the appellant was prevented by sufficient cause from producing the evidence which he was c (c)where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal ; or (d)where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2)No evidence shall be admitted under sub Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) records in writing the reasons for its admission. (3)The Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) shall not take into account any evidence produced under sub unless the Assessing Officer has been allowed a reasonable opportunity (a)to examine the evidence or document or to cross produced by the appellant, or (b)to produce any evidence or document or any additional evidence produced by the appellant. (4)Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commiss production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on ITA No.2720/Chny/20 UK P M Charitable Trust :: 3 :: the Ld.CIT(A) has allowed the appeal of the assessee by admitting fresh evidences before him without following Rule 46A i.e. without giving an opportunity to the AO to submit his remand-report on the evidences ; and drew our attention to the Para 4, wherein the allowed admission of these material/evidences viz., audit report, (2) books of accounts (3) documents related to NHAI contract (4) documents related to liquidation of debtor, etc 46A. Production of additional evidence before the Deputy Commissioner (Appeals) and Commissioner (Appeals). The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely :- where the Assessing Officer has refused to admit evidence which ought to have been admitted ; or where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer ; or where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. No evidence shall be admitted under sub-rule (1) unless the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) records in writing the reasons for its admission. The Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) shall not take into account any evidence produced under sub unless the Assessing Officer has been allowed a reasonable opportunity to examine the evidence or document or to cross-examine the witness produced by the appellant, or to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. Nothing contained in this rule shall affect the power of the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the /Chny/2024 (AY 2019-20) UK P M Charitable Trust by admitting fresh evidences before him without following Rule 46A i.e. without giving an report on the evidences drew our attention to the Para 4, wherein the material/evidences viz., (1) audit report, (2) books of accounts (3) documents related to NHAI , etc. Rule 46A efore the Deputy Commissioner The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals), any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessing Officer, except in the following where the Assessing Officer has refused to admit evidence which ought to where the appellant was prevented by sufficient cause from producing the alled upon to produce by the Assessing Officer ; or where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to rule (1) unless the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) The Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) shall not take into account any evidence produced under sub-rule (1) unless the Assessing Officer has been allowed a reasonable opportunity- examine the witness witness in rebuttal of the Nothing contained in this rule shall affect the power of the Deputy Commissioner ioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement the request of the Assessing Officer) under clause (a) of sub imposition of penalty under section 271. 4. The aforesaid Rule provides for two stage opportunity as per wh Ld CIT(A), should give evidence i.e. (1) before admission of additional evidence (2) after admission of additional evidence (refer decision of Hon’ble Delhi High Court in the case of Manish Buildwell Pvt Ltd 204 Taxman 106). We find that in this case, the AO has passed an assessee, since the assessee didn’t respond assessment proceedings, assessment u/s. 144 of the Act dated 12.12.2018. 5. Later before the uploaded audit report, books of accounts along with documents related to NHAI and liquidation of debtors. These were not filed before the AO. Therefore, Rule 46A undisputedly the Ld.CIT(A) has not called for remand report as envisaged u/r. 46A of the Rules. Therefore, there is therefore we are inclined to set aside the impugned order of the Ld.CIT(A) and restore the appeal bac grounds of appeal as per sub calling for remand report as envisaged u/r. 46A of the Rules. ITA No.2720/Chny/20 UK P M Charitable Trust :: 4 :: Assessing Officer) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271. The aforesaid Rule provides for two stage opportunity as per wh should give AO an opportunity before admitting additional (1) before admission of additional evidence (2) after admission of additional evidence (refer decision of Hon’ble Delhi High Manish Buildwell Pvt Ltd 204 Taxman 106). We find at in this case, the AO has passed an exparte order against the since the assessee didn’t respond/participate during assessment proceedings, which led him to pass best judgment assessment u/s. 144 of the Act dated 12.12.2018. Later before the Ld.CIT(A) it is noted that the assessee has uploaded audit report, books of accounts along with documents related to of debtors. These relevant documents undisputedly were not filed before the AO. Therefore, Rule 46A comes into play undisputedly the Ld.CIT(A) has not called for remand report as envisaged u/r. 46A of the Rules. Therefore, there is per-se violation of Rule 46A and therefore we are inclined to set aside the impugned order of the Ld.CIT(A) and restore the appeal back to his file with a direction to adjudicate the grounds of appeal as per sub-section (6) of section 250 of the Act, after calling for remand report as envisaged u/r. 46A of the Rules. /Chny/2024 (AY 2019-20) UK P M Charitable Trust section (1) of section 251 or the The aforesaid Rule provides for two stage opportunity as per which an opportunity before admitting additional (1) before admission of additional evidence (2) after admission of additional evidence (refer decision of Hon’ble Delhi High Manish Buildwell Pvt Ltd 204 Taxman 106). We find order against the /participate during which led him to pass best judgment Ld.CIT(A) it is noted that the assessee has uploaded audit report, books of accounts along with documents related to documents undisputedly comes into play and undisputedly the Ld.CIT(A) has not called for remand report as envisaged violation of Rule 46A and therefore we are inclined to set aside the impugned order of the Ld.CIT(A) k to his file with a direction to adjudicate the section (6) of section 250 of the Act, after calling for remand report as envisaged u/r. 46A of the Rules. 6. Having said so, we direct the Ld.CIT(A)to give opportunity to the assessee/IRP, Shri. Vikram Bajaj and take note of the insolvency proceedings are going on against the assessee company and thereafter to pass order in accorda 7. In the result, appeal filed by the purposes. Order pronounced on the Sd/- (जगदीश) (JAGADISH) लेखासद\u001b/ACCOUNTANT MEMBER चे\u0012ई/Chennai, िदनांक/Dated: 31st January JPV, Sr.PS आदेशकी#ितिलिपअ*ेिषत/Copy to 1. अपीलाथ\"/Appellant 2. #$थ\"/Respondent 3. आयकरआयु+/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय#ितिनिध/DR 5. गाड\u001eफाईल/GF ITA No.2720/Chny/20 UK P M Charitable Trust :: 5 :: we direct the Ld.CIT(A)to give opportunity to the IRP, Shri. Vikram Bajaj and take note of the stage at which the insolvency proceedings are going on against the assessee company and thereafter to pass order in accordance to law. In the result, appeal filed by the Revenue is allowed for statistical Order pronounced on the 31st day of January, 2025, in Chennai. Sd/ /ACCOUNTANT MEMBER (एबी टी. (ABY T. VARKEY \rाियकसद\u001b/JUDICIAL MEMBER , 2025. Copy to: , Chennai / Madurai / Salem / Coimbatore. /Chny/2024 (AY 2019-20) UK P M Charitable Trust we direct the Ld.CIT(A)to give opportunity to the stage at which the insolvency proceedings are going on against the assessee company and is allowed for statistical , in Chennai. Sd/- . वक ) ABY T. VARKEY) /JUDICIAL MEMBER , Chennai / Madurai / Salem / Coimbatore. "