TRIDENT COATINGS PVT.LTD.,CHENNAI V. ACIT, CORPORATE CIRCLE-3(1), CHENNAI

ITA 3/CHNY/2025

AI Insights

The case involves Trident Coatings Private Limited appealing against an addition of Rs. 51,12,839 made by the Assistant Commissioner of Income Tax under section 40(a)(ia) of the Income Tax Act for the assessment year 2014-15. The appeal was initially delayed by 2315 days due to external factors including COVID-19 and misrepresentation by a former Chartered Accountant. The Tribunal found the delay justifiable and proceeded to condone it. The main contention in the appeal was the disallowance of certain expenses under section 40(a)(ia), which the assessee argued were either not applicable or unjustified as the payee had already paid tax on the rental income. The Tribunal noted that the orders from the lower authorities were cryptic and lacked detailed discussion on the merits, leading to the decision to remand the case back to the AO for a fresh examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396265 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N. RAJA KUMAR
• Assessee Lawyers: S S.SRIDHAR; G.TARUN ADVOCATES
• Keywords: Set aside; Opportunity of being heard
• Section: 40(a)(ia)

Judgement Text

" आयकर अपीलीय अधिकरण, ‘ए’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI श्री एबी टी. वर्की, न्यायिर्क सदस्य एवं श्री अयिताभ शुक्ला, लेखा सदस्य क े समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.3/Chny/2025 Assessment Years: 2014-15 Trident Coatings Private Limited, No.1/590, GST Road, Vandalur, Tamil Nadu-600 048.. [PAN: AACCT3000A] Assistant Commissioner of Income Tax, Corporate Circle-3(1), Chennai (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : S/Shri S.Sridhar & G.Tarun Advocates. प्रत्यर्थी की ओर से /Revenue by : Shri N.Rajakumar, Addl.CIT सुनवाई की तारीख/Date of Hearing : 15.05.2025 घोषणा की तारीख /Date of Pronouncement : 30.05.2025 आदेश / O R D E R PER AMITABH SHUKLA, A.M : This appeal is filed by the assessee against the ITA No.204/2016- 17 dated 29.06.2018 of the Leaned Commissioner of Income Tax, (herein after “CIT(A), Chennai for the assessment year 2014-15. 2.0 It has been noted that there is a delay of 2315 days in the case, in filing of this appeal before the tribunal. In its affidavit the assesse has pleaded that the assesse has committed the delay on account of multiple external factors beyond its control. Thus, it was argued that part of the ITA No. 3 /Chny/2025 Page - 2 - of 4 delay was attributed to Covid-19 and another major part on account of misrepresentation by erstwhile Chartered Accountant, Smt.S.Vidya. All these activities contributed to the delay which was neither willful nor wanton. The assesse submitted that there will not be case of any non- compliance now. We have considered the justification put forth by the assesse and we are satisfied with their adequacy. We are also conscious of the fact that no litigant gains by intentionally delaying its own matters. The Ld. DR submitted that in the event of condonation of delay, cost be imposed upon the assessee for wasting the precious time of the court. Accordingly, we hereby condone the delay and proceed to adjudicate this appeal. 3.0 The only issue contested by the appellant assessee through its grounds of appeal is regarding an addition of Rs.51,12,839/- made by the Ld.AO u/s 40(a)(ia) of the Income Tax Act. The Ld. Counsel for the assessee has submitted that out of the above disallowance amounts concerning director’s remuneration and salary do not call for any disallowance within the meanings of section 40(a)(ia) per se. The disallowance for salary was reported to have been brought upon statute w.e.f AY-2015-16 and hence not applicable to this year. As regards rent It was stated that since the payee had paid the tax on his rental income the disallowance was unwarranted. It was also submitted that the Ld.AO ITA No. 3 /Chny/2025 Page - 3 - of 4 and Ld.CIT(A) have passed non-speaking orders without any application of mind. It was accordingly requested that the matter may be considered for remission to Ld.AO for verifying the nature of payments and to allow those which are eligible. 4.0 Per contra, the Ld. DR relied upon the order of lower authorities 5.0 We have heard rival submissions in the light of material available on records. We have observed from the order of both the Ld.AO as well as the Ld.CIT(A) that both the authorities have passed totally cryptic , one liner orders without any discussion on the merits. We have also noted that disallowances have been made u/s. 40(a)(ia) of the Act upon items which are not prohibited u/s 40 of the Act. We are therefore convinced that the matter deserves reconsideration by the Ld.AO. Accordingly, we set aside the order of the lower authorities and direct the Ld.AO to adjudicate the matter de novo after giving due opportunity of being heard to the assessee. The assessee shall be required to be comply with all the statutory notices issued by the Ld.AO. Any non- compliance shall be adversely viewed. This adjudication is however subject to the assessee paying a cost of Rs.10,000/- ( ten thousand only ) to be deposited into the Prime Minister Relief Fund within one month from the date of this order. A copy thereof shall be submitted in the office of ITA No. 3 /Chny/2025 Page - 4 - of 4 the Ld.AO. All the grounds of appeal raised by the assessee are therefore allowed for statistical purposes. 6.0 In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 30th , May -2025 at Chennai. Sd/- (एबी टी. वर्की) (ABY T VARKEY) न्याधयक सदस्य / Judicial Member Sd/- (अधमताभ शुक्ला) (AMITABH SHUKLA) लेखा सदस्य /Accountant Member चेन्नई/Chennai, धदनांक/Dated: 30th , May -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 "