SHREE VELU BUILDERS PVT. LTD.,CHENNAI V. DCIT, CORPORATE CIRCLE-3(1), CHENNAI

ITA 560/CHNY/2025

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The case involves Shri Velu Builders Private Limited, which appealed against the ex-parte assessment order passed by the Deputy Commissioner of Income Tax, Corporate Circle 3(1), Chennai, for the assessment year 2012-13. The original assessment was completed under section 143(3) of the Income Tax Act, 1961, but was later reopened under section 148 due to discrepancies in the income and expenditure reported. The Assessing Officer issued notices under sections 142(1) and 144, which went unanswered, leading to an ex-parte order. The assessee contested this order, claiming that the notices were sent to an old address and a dormant email, resulting in non-receipt and non-compliance. The Tribunal, considering the circumstances and the affidavit from the Managing Director of the assessee company, decided to remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312870 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M.P. GURUPRASAD
• Assessee Lawyers: GIRISH KUMAR
• Keywords: Set aside
• Section: 147; 148; 144; 143(3); 142(1)

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी जगदीश, लेखा सद˟ क े समƗ । Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri Jagadish, Accountant Member आयकर अपील सं./I.T.A. No.560/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2012-13 Shri Velu Builders Private Limited, Block No. 2, Alaka Palazu, 4/219, Poonamallee High Road, Kattupakkam, Chennai 600 056. [PAN:AAACS6653C] Vs. The Deputy Commissioner of Income Tax, Corporate Circle 3(1), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri Girish Kumar, Advocate ŮȑथŎ की ओर से/Respondent by : Shri M.P. Guru Prasad, Addl. CIT सुनवाई की तारीख/ Date of hearing : 23.04.2025 घोषणा की तारीख /Date of Pronouncement : 30.04.2025 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 30.12.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2012-13. 2. The assessee raised 12 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the assessment order exparte of the assessee. I.T.A. No.560/Chny/25 2 3. At the outset, we note that the assessee is a company and filed its original return of income for the AY 2012-13 on 26.09.2012 declaring a total income of ₹.2,69,77,770/-. The case of the assessee was selected for scrutiny and assessment under section 143(3) of the Income Tax Act, 1961 [“Act” in short] was completed on 13.02.2015 determining total income of ₹.2,69,77,770/-. Subsequently, the Assessing Officer noted that the assessee offered gross income at ₹.24,77,86,390/- being 56% of the advances received from the buyers based on percentage completion method of accounting and the expenditure was incorrectly claimed in respect of the income offered @ 56% of work completed. Accordingly, the Assessing Officer issued notice under section 148 of the Act and served on the assessee. Since there was no response from the assessee, the Assessing Officer issued show-cause notice requiring the assessee to explain as to why assessment should not be completed under section 144 of the Act. Additionally, notice under section 142(1) of the Act was also issued along with questionnaire calling for requisite details. Since there is no reply/explanation from the assessee, the Assessing Officer disallowed the excess expenditure claimed disproportionate to the income at ₹.4,40,49,366/- and added to the income of the assessee and passed order under section 144 of the Act. As not satisfied with the order of the Assessing Officer, the assessee preferred an appeal before the ld. I.T.A. No.560/Chny/25 3 CIT(A)/NFAC, Delhi. Para 4 of the impugned order clearly shows that there is no response from the assessee in compliance to the notices issued by the ld. CIT(A). Having no explanation in support of the ground raised by the assessee, the ld. CIT(A) confirmed the order of the Assessing Officer exparte of the assessee. 4. Before us, the ld. AR Shri Girish Kumar, Advocate submits that the assessee is ready to file all relevant details in support of the contention involved in the addition made by the Assessing Officer. He filed a notarized affidavit dated 22.04.2025 of the Managing Director of the assessee company, who undertakes to appear and prosecute the case before the Jurisdictional Assessing Officer and prayed to afford an opportunity to the assessee, the content in the notarized affidavit is reproduced herein below: I, Nagarkoil Velan Krishnapillai Velan, Managing Director of the appellant company, having office at Block No. 2, Alaka Palazu, 4/219, Poonamallee High Road, Kattuppakkam, Chennai 600 056 do hereby solemnly and sincerely affirm and state as follows: I am the Managing Director of the Petitioner/Appellant Company and I am well acquainted with the facts of the captioned case and thereby competent to swear to this affidavit. I state that the assessment order was passed ex-parte in view of the notices were sent to the old address while I further state that the hearing notices in the First Appeal Proceedings were sent to the dormant email id. I state that the reason for ex-parte order for both the authorities below was beyond my control and is causing undue hardship to the Appellant/Petitioner company. I undertake on behalf of the Appellant Company that I will appear before the JAO in the event of the Bench granting reasonable opportunity by setting aside the ex-parte orders. I.T.A. No.560/Chny/25 4 I undertake to appear and co-operate with the Income tax Department for completion of fresh assessment after serving the notice to the new address Block No. 2, Alaka Palazu, 4/219, Poonamallee High Road, Kattupakkam, Chennai 600 056 /new email id [e-mail] and [e-mail]. I accordingly, plead before this Hon’ble Bench to set aside the assessment order dated 30.12.2019 for the assessment year 2012-13 with a direction to the JAO to grant reasonable opportunity before passing the fresh assessment order in the interest of justice.” 5. The ld. DR Shri M.P. Guru Prasad, Addl. CIT objected the same and submits that if at all this Tribunal intends to afford one more opportunity to the assessee, that should be by way of cost as the assessee totally failed to prosecute its case before the Assessing Officer and the ld. CIT(A) inspite of ample opportunities afforded to the assessee. 6. Having considered the submissions of the ld. AR and ld. DR, we note that the Assessing Officer disallowed excess expenditure claimed disproportionate to the income. We find that there is no assistance from the assessee before the Assessing Officer and the ld. CIT(A) and the Assessing Officer completed the assessment under section 147 r.w.s. 144 of the Act dated 30.12.2019. As there is no assistance from the assessee, taking into account the undertaking given by the Managing Director of the assessee company that the assessee is ready to appear and prosecute its case, in the interest of justice, we deem it proper to remand the matter to the file of the Assessing Officer subject to the condition of payment of ₹.2,000/- in favour of the State Legal Aid Authority, Hon’ble Madras High Court within 30 days from the date of I.T.A. No.560/Chny/25 5 receipt of this order and the Assessing Officer shall satisfy the payment of cost and decide the issue afresh after considering the written submissions/ documentary evidences as may be filed by the assessee to substantiate its claim. In any case, the assessee fails to appear before the assessing authority, it is open to the Assessing Officer to complete the assessment based on the material available on record and to pass order in accordance with law. Thus, the grounds raised by the assessee are allowed for statistical purposes. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 30th April, 2025 at Chennai. Sd/- Sd/- (JAGADISH) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 30.04.2025 Vm/- 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. "