HELIOS STRATEGIC SYSTEMS LIMITED,CHENNAI V. THE INCOME TAX OFFICER CORPORATE WARD 2(3), CHENNAI

ITA 2082/CHNY/2025

AI Insights

The case involves Helios Strategic Systems Limited, a wholly owned subsidiary of Indo National Limited, which appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeal was related to the assessment year 2018-19, where the assessee had declared a loss and claimed interest payable for the assessment years 2017-18 and 2018-19. The Income Tax Officer disallowed the interest claimed, which was upheld by the CIT(A) due to the non-participation of the assessee in the proceedings. The Tribunal noted the absence of the assessee's representation and the lack of consideration of submissions made with the appeal papers, leading to the decision to remit the matter back to the CIT(A) for a fresh evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793066 (ITAT-CHENNAI)
• Duration Of Justice: 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2018-2019
• Appeal Filed On: 29-07-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BIPIN; C.N.; C.I.T
• Keywords: Set aside; Reasonable cause; Wholly owned subsidiary

Judgement Text

" आयकर अपील य अ धकरण, ‘सी’ \u000eयायपीठ, चे\u000eनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI \u0015ी मनु क ुमार ग\u0019र, \u000eया\u001aयक सद य एवं \u0015ी एस. आर. रघुनाथा, लेखा सद य क े सम# BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 2082/Chny/2025 \u001aनधा$रण वष$ / Assessment Year: 2018-19 Helios Strategic Systems Limited, No. 609, IVth Floor, Lakshmi Bhavan, Mount Road, Chennai – 600 006. Tamil Nadu. vs. ITO Ward -2(3), Chennai. [PAN: AADCH-6435-N] (अपीलाथ&/Appellant) ('(यथ&/Respondent) अपीलाथ& क) ओर से/Appellant by : None '(यथ& क) ओर से/Respondent by : Mr. Bipin, C.N., C.I.T. सुनवाई क) तार ख/Date of Hearing : 17.09.2025 घोषणा क) तार ख/Date of Pronouncement : 24.09.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2018-19, vide order dated 25.03.2025. Printed from counselvise.com :-2-: ITA. No:2082 /Chny/2025 2. At the outset, we find that there is a delay of 59 days in appeals filed by the assessee and filed a condonation petition by giving reasons for delay in filing the appeal. After hearing both the parties, we find that there is a reasonable cause for the assessee in not filing appeals on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of appeals and admit appeals filed by the assessee for adjudication. 3. The brief facts of the case are that the assessee is a wholly owned subsidiary company of Indo National Limited (INL) a public listed company. INL has made further investment in assessee’s company through 8% CCD and the assessee is paying interest @ 8%. The assessee company being a core investment company has invested in Kineco limited by acquiring 51% Equity in the said company. The assessee filed its return of income u/s.139(1) of the Income Tax Act, 1961 (hereinafter the ‘Act’) for the A.Y. 2018-19 by declaring a loss of Rs.5,91,66,816/- after claiming interest payable of Rs.2,98,087,126/- for the A.Y.2017-18 and Rs.3,46,89,092/- for the A.Y.2018-19. The assessee’s case was selected for scrutiny and assessment was completed u/s.143(3) of the Act on 19.04.2021 by making the disallowance of interest claimed pertaining to 2017-18 and also the interest related to 2018-19 is an expenditure incurred towards earning exempt dividend income. 4. Aggrieved, assessee preferred an appeal before the Ld.CIT(A). The Ld.CIT(A) dismissed the appeal of assessee by upholding the order of AO and Printed from counselvise.com :-3-: ITA. No:2082 /Chny/2025 sustained the additions since the assessee did not participate in the assessment proceedings by passing an order dated 25.03.2025. Aggrieved by the impugned order of the Ld.CIT(A), the assessee is in appeal before us. 5. We note that the ld.CIT(A) has passed the impugned order dated 23.01.2025 without participation of the assessee and also not considered the submissions made along with the appeal papers by confirming the order of AO. 6. The ld.DR supported the order of lower authorities and prayed for confirming the order of ld.CIT(A). 7. We have heard and perused materials available on record, and gone through orders of the authorities below. We note that the assessee’s appeal was represented by none before us. We note that the AO has passed an order by disallowing the interest on CCDs for the A.Y.2017-18 and 2018-19 to the tune of Rs.6,44,97,218/-. The same has been confirmed by the ld.CIT(A) without the participation of the assessee in the appellate proceedings. We note that ld.CIT(A) had given 8 (eight) opportunities from 29.04.2022 to 17.03.2025 as per para 4.2 (page No.6) of the order and the assessee has not responded to any of the notices. 8. Therefore, we set aside the order of the ld.CIT(A), to meet the ends of justice we remit the matter back to the file of the ld. CIT(A), NFAC for de novo adjudication. The assessee is directed to be diligent during the appellate proceedings and submit a written submission along with all relevant supporting Printed from counselvise.com :-4-: ITA. No:2082 /Chny/2025 documents before the ld. CIT(A) at the earliest opportunity without seeking unnecessary adjournment. 9. In the result, the appeal filed by the assessee is allowed for the statistical purposes. Order pronounced in the court on 24th September, 2025 at Chennai. Sd/- Sd/- (मनु क ुमार ग\u0019र) (MANU KUMAR GIRI) \u000eया\u001aयक सद य/JUDICIAL MEMBER (एस. आर. रघुनाथा) (S.R.RAGHUNATHA) लेखासद य/ACCOUNTANT MEMBER चे\u000eनई/Chennai, -दनांक/Dated, the 24th September, 2025 SP आदेश क) '\u001aत/ल0प अ1े0षत/Copy to: 1. अपीलाथ&/Appellant 2. '(यथ&/Respondent 3.आयकर आयु2त/CIT 4. 0वभागीय '\u001aत\u001aन ध/DR 5. गाड$ फाईल/GF Printed from counselvise.com "