SLOK ENTERPRISES,CHENNAI V. ITO, NCW-1(6), CHENNAI

ITA 35/CHNY/2025

AI Insights

The case involves M/s. Slok Enterprises, which appealed against the order of the Commissioner of Income Tax (Appeals) dated 26.09.2024 for the Assessment Year 2018-19. The primary issue arose from the AO's addition of Rs. 19,97,061 as unexplained expenditure under section 69C of the Income Tax Act, 1961, due to the assessee's failure to respond to notices regarding discrepancies in reported purchases and import invoices. The CIT(A) confirmed the AO's order ex-parte. The Tribunal, considering the principles of natural justice, decided to provide the assessee another opportunity to present its case, despite the initial non-compliance.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29853 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMANTHA MULLAMUDI
• Assessee Lawyers: GIRISH KUMAR
• Keywords: Set aside; Unexplained expenditure; Principle of natural justice
• Section: 143(3); 142(1); 143(2); 69C

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ \u000fा यपीठ, चे\u0014ई IN THE INCOME TAX APPELLATE TRIBUNAL , ‘A’ BENCH, CHENNAI \u0016ी मनु क ुमा र िग\u001bर ,\u000fा ियक सद एवं \u0005ी अिमता भ शु#ा , लेखा सद यक े सम\u0011 BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकरअपीलसं./I.T.A.No.35/Chny/2025 (िनधा\u0005रण वष\u0005 / Assessment Year: 2018-19) M/s.Slok Enterprises, C2, Krishna Paradise, No.6, Ramachandra Road, Mylapore, Chennai-600004. Vs Income Tax Officer, Non-Corporate Ward-1(6), Chennai. PAN : ACKFS-1695-P (अपीलाथ\u000f/Appellant) (\u0010\u0011यथ\u000f/Respondent) अपीलाथ\u000fक\u0014ओरसे/ Appellant by : Mr. Girish Kumar Advocate \u0010\u0011यथ\u000fक\u0014ओरसे/Respondent by : Mrs.Samantha Mullamudi, Addl. CIT सुनवाईक\bतारीख/Date of hearing : 25.03.2025 घोषणाक\bतारीख /Date of Pronouncement : 01.04.2025 आदेश आदेश आदेश आदेश / O R D E R PER MANU KUMAR GIRI, JM: The captioned appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)(NFAC) Delhi [CIT(A)] dated 26.09.2024 for Assessment Year 2018-19. 2. The registry has noted delay of 38 days in filing the respective appeal. Considering the reasons stated in the affidavit by the Assessee, we condone the delay and treat the reasons as ‘sufficient cause’ and admit the appeal for adjudication. 3. Brief facts are as under: The assessee is a firm derived income from business or profession filed its return of income on 31.03.2019 declaring loss of Rs.2,56,724/-. The case was selected for limited scrutiny. The AO noticed that the assessee has shown less purchases than the 2 ITA No. 35 /Chny/2025 invoice value of imports shown in export & import data. Therefore, AO issued notices to the notice u/s. 143(2) and 142(1) of the Act. However, the assessee has failed to respond to the notices. Therefore, AO passed assessment order making an addition of Rs.19,97,061/- on account of unexplained expenditure u/s 69C of the Income Tax Act, 1961. Assessee further challenged the order of assessment u/s 143(3) of the Act before the ld.CIT(A) who proceeded ex-parte and confirmed the order of the AO on merits. 4. Aggrieved by the CIT(A) order, assessee is in appeal before us. 5. Before us, the ld. Counsel for assessee submitted that the CIT(A) has sent the notices which were inadvertently not received by the assessee, hence the assessee was prevented from appearance on the purported dates. Therefore, he prayed that the assessee may be provided an adequate and proper representation time to file evidence and documents, if any, to substantiate his explanation regarding addition. The ld.DR stated that the assessee has defaulted in appearing before the appellate authority hence, no lenient view is to be taken in this case and prayed for dismissal of appeal. 6. Though we concur with the submissions of Ld. DR however, keeping in mind the principle of natural justice and grant another opportunity of hearing to the assessee. We also find that assessee has not represented before the ld.CIT(A) despite notices for the reasons stated above. Even assessment has been done on the basis of no explanation by the assessee. Accordingly, the impugned order is set aside and the appeal is restored back to the file of Ld. AO for de novo assessment hearing, after affording proper opportunity of 3 ITA No. 35 /Chny/2025 hearing to the assessee subject to cost of Rs.5,000/- 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 Ld.AO whose shall proceed for fresh assessment hearing after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents etc. if any, forthwith without any fail, failing which Ld.AO shall be at liberty to proceed with the assessment proceedings as per law. The ld. AR, who appeared also assured the bench that he will ensure that the assessee will prosecute his case diligently before the ld.AO. 7. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 1st April, 2025 Sd/- Sd/- (अिमताभ शु#ा) ( मनु क ुमार िग\u001bर) ( Amitabh Shukla ) ( Manu Kumar Giri) लेखा लेखा लेखा लेखा सद\u0003य सद\u0003य सद\u0003य सद\u0003य / Accountant Member \u000fाियक सद / Judicial Member चे\u0019ई/Chennai, \u001bदनांक/Date:01.04.2025 DS आदेश क\u0007 \bितिलिप अ\u000eेिषत/Copy to: 1.Appellant 2.Respondent 3. आयकर आयु\u0013/CIT Chennai/Madurai 4. िवभागीय \bितिनिध/DR 5. गाड फाईल/GF. "