M/S. FALLING WATERS,CHENNAI V. ITO, NON CORP 10(1), CHENNAI, CHENNAI

ITA 1849/CHNY/2025

AI Insights

The case involves M/s. Falling Waters, the appellant, contesting an order from the CIT(A) which confirmed additions made by the Income Tax Officer (ITO) regarding a shortfall in revenue recognition amounting to Rs.1,53,60,967 and disallowance of 30% of legal charges claimed as an expense due to non-deduction of TDS. The appellant argued that they were not given a proper notice or opportunity to present their case before the CIT(A). The respondent, ITO, supported the CIT(A)'s decision. The Tribunal, while agreeing partially with the respondent, prioritized the principles of natural justice and granted the appellant another opportunity to present their case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772741 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VEERAMANY.K.; IRS
• Assessee Lawyers: S. SEETHARAMAN
• Keywords: Set aside; Principle of natural justice; TDS
• Section: 40(a)(ia)

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ \u0001यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI \u0001ी मनु क ुमार िग र, ाियक सद\u0011 एवं एवं एवं एवं \u0001ी अिमताभ शु\u0016ा, लेखा सद क े सम\u0019 BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1849/Chny/2025 िनधा\u000eरण वष\u000e/Assessment Year: 2017-18 M/s. Falling Waters, 37 (Old No.15/1), Dr. Muthulakshmi Salai, L.B. Road, Adyar, Chennai-600 020. v. The ITO, Non Corporate Circle-10(1), Chennai. [PAN: AADFF 2255 R] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) अपीलाथ\u0016 क\u001a ओर से/ Appellant by : Mr.S. Seetharaman, Advocate \u0017\u0018यथ\u0016 क\u001a ओर से /Respondent by : Mr.Veeramany.K., IRS सुनवाईक\u001aतारीख/Date of Hearing : 26.08.2025 घोषणाक\u001aतारीख /Date of Pronouncement : 26.08.2025 आदेश / O R D E R PER MANU KUMAR GIRI, JM: The captioned appeal filed by the assessee is directed against order of the Ld. Commissioner of Income Tax (Appeal)/NFAC, Delhi, [‘CIT(A)’ in short] dated 11.04.2025 for Assessment Year 2017-18. 2. The brief facts of the case are that addition made on account of shortfall in revenue recognition of Rs.1,53,60,967/-. Further, the assessee has not deducted TDS for the legal charges claimed as expense in its P&L for Rs.28,06,000/-. Therefore, 30% of the legal charges claimed is Printed from counselvise.com ITA No.1849/Chny/2025 (AY 2017-18) M/s. Falling Waters :: 2 :: disallowed u/s 40(a)(ia) of the Income Tax Act,. The ld.CIT(A) confirmed the addition. 3. Aggrieved, assessee is in appeal before us. 4. Before us, the ld. Counsel for assessee submitted that the assessee may be given more chance to adduce evidence and submission. He further contended that the ld.CIT(A) had never issued notice to the assessee as discernible from the order. The ld.DR relied upon the order of the ld.CIT(A) and pleaded for the dismissal of the appeal. 5. Though we some extent concur with the submissions of Ld.DR, however, keeping in mind the natural justice, we are of the view that the assessee may be granted opportunity to file submissions and evidence. Accordingly, the impugned order is set aside and the appeal is restored back to the appeal file to the Ld. CIT(A) for hearing on merits subject to cost of Rs.1,000/- (Rupees One Thousand) which shall be deposited by the assessee within ‘30’ days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before the Ld.CIT(A) whose shall proceed for hearing the appeal on merits after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents, if any, forthwith without any fail, failing which Ld.CIT(A) shall be at liberty to Printed from counselvise.com ITA No.1849/Chny/2025 (AY 2017-18) M/s. Falling Waters :: 3 :: proceed with the appeal proceedings on merits as per law. Legal issues are open. The ld. AR of the asssessee also assured us that the assessee will prosecute the case diligently before the ld.CIT(A). 6. In the result, appeal filed by the assessee is allowed for statistical purpose. Order pronounced in open court on the 26th day of August, 2025, in Chennai. Sd/- (अिमताभ शु\u0016ा) (AMITABH SHUKLA) लेखा सद\u0003य/ACCOUNTANT MEMBER Sd/- (मनु क ुमार िग र) (MANU KUMAR GIRI) \u0005याियक सद\u0003य/JUDICIAL MEMBER चे ई/Chennai, !दनांक/Dated: 26th August, 2025. TLN, Sr.PS 1. अपीलाथ /Appellant 2. \u000e\u000fथ /Respondent 3. आयकरआयु\u0015/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u000eितिनिध/DR 5. गाड फाईल/GF Printed from counselvise.com "