INCOME TAX OFFICER, NUNGAMBAKKAM, CHENNAI V. ARROWLINE ORGANIC PRODUCTS PRIVATE LIMITED, CHENNAI

ITA 2624/CHNY/2024

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A), which had partially relieved the assessee, Arrowline Organic Products Pvt. Ltd., from an addition of Rs.15,78,51,475 under section 68 of the Income Tax Act, 1961. The AO had made this addition due to unconfirmed share capital, which the assessee failed to substantiate fully. The CIT(A) reduced the addition to Rs.7,13,55,000 based on documents submitted by the assessee, which were not available to the AO. The Revenue contended that this relief was erroneous as it was based on documents not examined by the AO, thus violating Rule 46A. The tribunal agreed with the Revenue, noting the absence of the assessee at the hearing and the procedural error by the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633427 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G.NANDHA KUMAR
• Assessee Lawyers: ITS NONAPPEARANCE
• Keywords: Set aside
• Section: 68

Judgement Text

"आयकर अपीलीय अधिकरण, ’सी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI श्री यस यस विश्वनेत्र रवि, न्यावयक सदस्य एवं श्री अविताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI SS VISWANETHRA RAVI, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2624/Chny/2024 Assessment Years: 2017-18 Income Tax Officer, Corporate Ward-1(1) Chennai. Arrowline Organic Products Pvt. Ltd. No.1/6, 1st Floor, Bishop Wallers Avenue(South), CIT Colony, Mylapore, Chennai- 600 004. [PAN: AANCA4194K] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : None प्रत्यर्थी की ओर से /Revenue by : Shri G.Nandha Kumar, CIT सुनवाई की तारीख/Date of Hearing : 02.06.2025 घोषणा की तारीख /Date of Pronouncement : 11.06.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed by the Revenue against the order bearing DIN & Order No.ITBA / NFAC / S / 250 / 2024-25 / 1067271334(1) dated 02.08.2024, of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment year 2017-18. The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time. ITA No.2624/Chny/2024 Page - 2 - of 4 2.0 It has been noted that there is a delay of 8 days in the case, in filing of this appeal before the tribunal by the Revenue. In its affidavit the Revenue has pleaded that the Ld.AO was ceased with pressing judicial matters contributing to the impugned delay and that the same was neither willful nor wanton. The Revenue submitted that there will not be case of any non-compliance now. We have considered the justification put forth by the Revenue and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. Accordingly, we hereby condone the delay and proceed to adjudicate this appeal. 3.0 The assessee was called absent on the date of hearing. 4.0 The Ld. DR argued that the order of Ld.AO is based upon correct understanding of the facts of the case. It was submitted that evidences qua satisfaction of provisions of section 68 were not provided to the Ld.AO,in full as result of which he made an addition of Rs.15,78,51,475/-. It was argued that the part-relief accorded by the Ld.CIT(A) of Rs.7,13,55,000/- qua addition u/s 68 was erroneous and excessive in as much as it was based upon consideration of documents filed before the Ld.CIT(A) and which were not filed by the Ld.AO. It was accordingly requested that the order of the Ld. CIT(A) be set aside and that of Ld.AO be sustained. ITA No.2624/Chny/2024 Page - 3 - of 4 5.0 We have noted the arguments of the Ld.DR in the light of material available on records. The assessee was called absent in the case. Revenue has, inter-alia, contended violation of provisions of Rule 46A of the IT Act. We have noted from para 12 & 13 of the Ld.AO’s order that evidences in respect of unconfirmed share capital of Rs.15,78,51,475/- was not filed by the assessee. We have also noted that on page 11 of his order the Ld.CIT(A) has observed that the assesse was requested to file details in support of the share capital accretion of Rs.15,78,51,475/- however it provided only evidence for Rs.7,13,55,000/. We have noted that the case thus becomes a matter where evidences requisitioned by the Ld.AO were not provided by the assessee but were submitted before the Ld.First Appellate Authority and that the appellate authority considered the same for relief without affording the Ld.AO an opportunity of examining the same. Thus, violation of Rule 46A is prima-facie evident in the case. The assessee by its non-appearance has alluded that it is not interested in prosecuting its matter. Accordingly, we set aside the order of the Ld.CIT(A) and restore that of the Ld.AO. All the grounds of appeal raised by the Revenue are allowed. ITA No.2624/Chny/2024 Page - 4 - of 4 6.0 In the result, the appeal of Revenue is allowed. Order pronounced on 11th , June-2025 at Chennai. Sd/- (यस यस धवश्वनेत्र रधव) (SS VISWANETHRA RAVI) न्याधयक सदस्य / Judicial Member Sd/- (अधमताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 11th , June-2025. KB/- आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अिीिार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT - Chennai 4. तिभागीय प्रतितिति/DR 5. गार्ड फाईि/GF "