PAALAR SHOES PVT. LTD.,CHENNAI V. ACIT, CENTRAL CIRCLE-1(1), CHENNAI

ITA 1640/CHNY/2025

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The case involves Paalar Shoes Private Limited, which appealed against the order of the Commissioner of Income Tax (Appeals) - 18, Chennai, concerning the assessment year 2019-20. The primary legal contention was whether the addition made under section 36(1)(va) of the Income Tax Act, 1961, during reassessment, was maintainable. The appellant argued that the issue had previously been decided in their favor, citing the CIT v. Alom Extrusions Ltd. case, where it was held that no disallowance is warranted if the amounts were paid before the due date of filing the return of income. The Tribunal found that the issue had attained finality as no appeal was filed by the Revenue against the CIT(A)'s earlier decision, thus barring any reassessment on the same grounds.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772689 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2019-2020
• Other Referred Cases: CIT v. Alom Extrusions Ltd. (2009) 319 ITR 306 (SC), CIT v. Ramachandra Hatcheries (2008) 305 ITR 117 (Mad), CCIT (OSD)/PCIT v. Bhupendra Champaklal Dalal [2024] 160 taxmann.com 645 (Bombay)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N. RAJA KUMAR
• Assessee Lawyers: D.ANAND
• Keywords: Reassessment proceedings; Question of law; Bogus
• Section: 147

Judgement Text

"आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी एस.आर. रगुनाथॎ, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri S.R. Raghunatha, Accountant Member आयकर अपील सं./I.T.A. No.1640/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2019-20 Paalar Shoes Private Limited, No. 151/4, Mount Poonamalee Road, Ramapuram, Chennai 600 089. [PAN:AAECP6556B] Vs. The Assistant Commissioner of Income Tax, Central Circle 1(1), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri D. Anand, Advocate ŮȑथŎ की ओर से/Respondent by : Shri N. Rajakumar, Addl. CIT सुनवाई की तारीख/ Date of hearing : 25.08.2025 घोषणा की तारीख /Date of Pronouncement : 28.08.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 15.05.2025 passed by the ld. Commissioner of Income Tax (Appeals) – 18, Chennai, for the assessment year 2019-20. 2. The assessee raised 4 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the addition made by the Assessing Officer under section 36(1)(va) of the Income Tax Act, 1961 [“Act” in short]. Printed from counselvise.com I.T.A. No.1640/Chny/25 2 3. At the outset, the ld. AR Shri D. Anand, Advocate submits that the assessment made under section 147 of the Act is not maintainable in respect of the addition made under section 36(1)(va) of the Act as the same issue attained finality by the order of the ld. CIT(A) in the first round of appellate proceedings. He submits that the ld. CIT(A), in the first round of original appellate proceedings, deleted the addition made by the CPC by placing reliance in the case of CIT v. Alom Extrusions Ltd. (2009) 319 ITR 306 (SC) by holding that no disallowance is warranted when the impugned amounts were paid before the due date of filing of return of income. The ld. AR placed on record copy of the order dated 11.09.2020 passed by the ld. CIT(A) in the original appellate proceedings and vehemently argued that no appeal filed by the Revenue before this Tribunal. He submits that the said issue is attained finality and reassessment made by the Assessing officer on the same issue is not maintainable. He drew our attention to the decision of the Hon’ble Jurisdictional High Court in the case of CIT v. Ramachandra Hatcheries (2008) 305 ITR 117 (Mad) and argued that the Assessing Officer has no jurisdiction to commence reassessment proceedings on the issue, which has already been adjudicated upon by the ld. CIT(A) and the Hon’ble High Court held the Tribunal correctly decided the matter in favour of the assessee. Printed from counselvise.com I.T.A. No.1640/Chny/25 3 4. Further, he drew our attention the decision of the Hon’ble High Court of Bombay in the case of CCIT (OSD)/PCIT v. Bhupendra Champaklal Dalal [2024] 160 taxmann.com 645 (Bombay) and argued that the Assessing Officer could not have assessed the addition once again since the ld. CIT(A) had deleted the same in the first round of appellate proceedings and concerned matter had attained finality. 5. The ld. DR Shri N. Rajakumar, Addl. CIT relied on the orders of the Assessing Officer and the ld. CIT(A). 6. Heard both the parties and perused the material on record. Admittedly, in the first round of original appellate proceedings, the ld. CIT(A) deleted the addition made on account of provisions of section 36(1)(va) of the Act by placing reliance on various case law vide his order dated 11.09.2020. Admittedly, there is no dispute with reference to the non filing of appeal by the Revenue against the said order. Therefore, as rightly argued by the ld. AR, in our opinion, the said issue attained finality by the order of the ld. CIT(A) dated 11.09.2020 in the first round of original jurisdiction. On perusal of the assessment order, we note that in view of search in the case of M/s. Farida Group involved in suppression of stock, unaccounted sale of scrap, bogus expenses and diversion of profits to foreign associates, the Assessing Officer reopened the Printed from counselvise.com I.T.A. No.1640/Chny/25 4 assessment of the assessee stating that the case of the assessee is also covered by the above said search, but, the serious contention of the ld. AR is that the Assessing Officer has no jurisdiction to reopen the assessment of the assessee when it is attained finality, in this regard, let us examine the decision of the Hon’ble High Court of Madras in the case of Ramachandra Hatcheries (supra). The relevant portion of the order is reproduced herein below: The Tribunal had correctly applied the above principles and held that reopening of the assessment is bad in law, by rightly annulling the reassessments. We are also conscious of the fact that the Supreme Court in the case of Commissioner of Income-tax Vs. Venkateswara Hatcheries (P.) Ltd. and Others, cited supra has decided the matter against the assessee. Perhaps, the view taken by the C.I.T.(A) earlier which had arisen from the assessment proceedings, is erroneous. We need not examine the aspect on merits. In the present cases, the earlier C.I.T.(A)'s order has reached finality which arises from the earlier assessment proceedings. Hence the Assessing Officer has no jurisdiction to commence reassessment proceedings on the issue which has already been adjudicated upon by the C.I.T.(A). The Tribunal correctly decided the matter and the reasons given by the Tribunal are based on valid materials and evidence and we find no error or legal infirmity in the order of the Tribunal so as to warrant interference. 5. Under the circumstances, no substantial question of law arises for consideration of this Court and accordingly, the tax cases are dismissed. Consequently, M.P.No.1 of 2007 in T.C.(A) No.706 of 2007 is closed. No costs. 7. On careful reading of the decision of the Hon’ble High Court of Madras, which clearly held that no additions in reassessment proceedings are maintainable on the same issue, which was attained finality by the order of the ld. CIT(A). We find in the present case the issue under Printed from counselvise.com I.T.A. No.1640/Chny/25 5 section 36(1)(va) of the Act was attained finality by the order dated 11.09.2020 of the ld. CIT(A) in the first round of original appellate proceedings, therefore, we are of the opinion that the addition made by the Assessing Officer in the reassessment proceedings is not maintainable as the same attained finality. Thus, the decision of the Hon’ble High Court is clearly applicable to the facts of the present case. 8. Further, we have perused the decision in the case of CCIT (OSD)/PCIT v. Bhupendra Champaklal Dalal (supra) and the Hon’ble High Court of Bombay was pleased to hold as under: 8 The third and final issue is in the appeal filed by the Revenue before the ITAT that relates to deletion of various additions aggregating to Rs.10,89,30,545/-. It is noted by the ITAT that various types of additions aggregating to this amount were made by the Assessing Officer in the original assessment proceedings and in the appeal filed by assessee, the CIT(A) deleted these additions. The Revenue did not prefer an appeal challenging the order of the CIT(A) and hence, the same has attained finality. The ITAT has noted only assessee went in appeal before ITAT challenging the additions confirmed by the CIT(A) and the ITAT has also restored those additions, which were confirmed by the CIT(A), to the file of the Assessing Officer for fresh examination. We would, therefore, agree with the ITAT that the Assessing Officer could not have assessed these various additions aggregating to Rs.10,89,30,545/- again since the CIT(A) had deleted the same in the first round of proceedings and the concerned matters have attained finality. We would also agree with the ITAT that the CIT(A) in the second round of proceedings correctly held that the Assessing Officer was not legally entitled to make these additions again in the second round of proceedings. Therefore, on this issue no substantial question of law arise. 9. On careful reading of the decision of the Hon’ble High Court of Bombay, which agreed with the findings of the ITAT and held that the Printed from counselvise.com I.T.A. No.1640/Chny/25 6 Assessing Officer could not have assessed various additions again since the ld. CIT(A) deleted the same in the first round of original appellate proceedings, which attained finality. We find the facts and circumstances in the decision of the Hon’ble High Court of Bombay to the facts on hand are similar and identical. Therefore, the decision of the Hon’ble High Court of Bombay is applicable to the issue on hand. Respectfully following the decision of the Hon’ble High Court of Bombay, we hold that the addition made by the Assessing Officer in the reassessment proceedings is not justified as the same attained finality by the order of the ld. CIT(A) in the original first round of appellate proceedings vide order dated 11.09.2020. Thus, the ground raised by the assessee is allowed. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced on 28th August, 2025 at Chennai. Sd/- Sd/- (S.R. RAGHUNATHA) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 28.08.2025 Vm/- Printed from counselvise.com I.T.A. No.1640/Chny/25 7 आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. Printed from counselvise.com "