M/S. ARASAN BEEDI CO. PVT. LTD.,TIRUNELVELI vs. DCIT, CIRCLE-1,, TIRUNELVELI

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ITA 830/CHNY/2026Status: DisposedITAT Chennai02 June 2026AY 2020-217 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay in filing appeals and set aside the CIT(A)'s orders. The matters were remitted back to the Assessing Officer for fresh assessment, providing the assessee with another opportunity.

What were the facts?

The assessee company failed to appear before the CIT(A) due to issues with its e-filing portal's email communication, leading to the dismissal of its appeals. The Assessing Officer had made significant additions to income for multiple assessment years.

What were the issues?

Whether the CIT(A) erred in dismissing the appeals for non-prosecution without a speaking order, and whether the additions made by the AO were based on proper appreciation of evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 68,Section 115BBE,Section 37(1),Section 270A,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI S.S. VISWANETHRA RAVI & SHRI S. R. RAGHUNATHA

Hearing: 16.04.2026Pronounced: 02.06.2026

PER S.R.RAGHUNATHA, AM:

These five appeals of the assessee are filed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, (in short ‘ld.CIT(A)’) for the assessment year (in short ‘A.Y’) 2014-15 dated 24.02.2025 against the assessment order passed by the :-2-:

AO, u/s.147 r.w.s 144 of the Income Tax Act, 1961 (in short ‘the Act’) dated 27.09.2021 and order of the ld.CIT(A) for the A.Y 2017-18, 2018-19 and 2020- 21, vide orders dated 20.03.2025, 24.02.2025 and 02.04.2025 respectively against the assessment orders passed by the AO, u/s.143(3) of the Act dated 31.12.2019, 17.08.2021 and 26.09.2022 respectively and the penalty order u/s.270A of the Act for the A.Y.2020-21 passed by the AO, NFAC, Delhi, dated 30.03.2023. 2. At the threshold, we observe that there is a delay of 289 days, 258 days, 289 days, 228 days and 258 days respectively in the filing of the above five appeals against the assessment orders by the assessee. The assessee has furnished an affidavit explaining that the assessee was not aware of the hearing notices and impugned orders passed by the ld.CIT(A) due to Income Tax e-filing portal account of the assessee earlier operated and registered with the official email ID of the erstwhile auditors and all the statutory communications, notices and orders issued by the Income Tax Department were received on the said email ID and the said communications were not brought to the knowledge of the assessee in time. The assessee became aware of the impugned order passed by the first appellate authority only after changing the registered email ID and mobile number on the Income Tax Portal and immediately filed the appeals before the Hon’ble ITAT, Chennai on 13.02.2026. Upon perusal of the affidavit and after affording due opportunity of hearing from both parties, we are satisfied that the assessee has demonstrated sufficient and reasonable cause for not presenting the appeals within the statutory period prescribed under law. Accordingly, in the interest of justice, the delay in filing the appeals is hereby condoned, and the appeal is admitted for adjudication on merits.

3.

The brief facts of the case emanating from the records are that the assessee is a private limited company, engaged in the business of :-3-:

manufacturing beedi. The assessee has filed its return of income for the assessment years as detailed below:

A.Y. Date of Filing Declaring Income in Rs. 2014-15 08.03.2015 4,69,72,380/- 2017-18 31.10.2017 3,90,30,050/- 2018-19 23.09.2019 2,89,54,410/- 2020-21 13.01.2021 (-)24,08,784/-

As per the information available with the department, the Assessing Officer found that the assessee had not paid the bonus to the tune of Rs.1,11,19,539/- and TDS to the tune of Rs.1,12,541/- before the due dates specified u/s.139(1) of the Act for the A.Y 2014-15. The case was re-opened u/s.147 of the Act, accordingly, notice u/s.148 of the Act was issued on 16.07.2019. In response, the assessee filed the return of income on 06.08.2019 for A.Y 2014-15, admitting total income of Rs.4,69,72,380/- as in the original return of income filed on 08.03.2015. Subsequently, the case was selected for complete scrutiny for the A.Y.2017-18, 2018-19 and 2020-21 also through CASS. Further, notices were issued to the assessee by calling for the information and details. In response, the assessee submitted reply along with its supporting documents for verification. On perusal of the documents submitted by the assessee, the AO completed the assessment and passed the assessment order u/s.147 r.w.s 144B of the Act for the A.Y 2014-15 and the assessment orders u/s.143(3) of the Act for the A.Y.2017-18, 2018-19 and 2020-21 by making the additions for the A.Ys as detailed below: A.Y. Date Addition Amount in Rs. 2014-15 27.09.2021 Disallowance of Bonus and TDS 1,28,20,214/- 2017-18 31.12.2019 Disallowance of claim, Unexplained 4,84,31,194/- cash credits u/s.68 r.w.s 115BBE and disallowance u/s.37(1)

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2018-19 17.08.2021 Addition on account of recalculated 28,00,37,910/- sales and closing stock and disallowance of expenses 2020-21 26.09.2022 Disallowance, undisclosed income 3,35,11,613/-

4.

Further, the AO after issuing notices to the assessee, levied a penalty of Rs.2,23,75,030/- being 200% of the tax sought to be evaded as ‘under reporting of income’ in consequence to misreporting by passing a penalty order u/s.270A of the Act for the A.Y.2020-21 dated 30.03.2023. 5. Aggrieved by the orders of the AO, the assessee filed five separate appeals before the ld.CIT(A) on 02.02.2022, 30.01.2020, 08.11.2021, 17.12.2023 and 21.12.2023 respectively.

6.

At the outset, we observed that ld.CIT(A) has provided several opportunities to the assessee to appear for hearings as detailed in paragraph 5.1, 4, 5.1, 5 and 5.1 respectively of the ld.CIT(A)’s orders for the A.Y. 2014-15, 2017-18, 2018-19, 2020-21 and penalty order for the A.Y 2020-21 to support the appeal of the assessee. However, the assessee chose to be silent and did not respond to any of the notices and hence, the ld.CIT(A), NFAC dismissed the appeals filed by the assessee by confirming the order of the AO by passing orders dated 24.02.2025, 20.03.2025, 24.02.2025 and 02.04.2025 respectively and penalty order dated 18.03.2025. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us.

7.

The ld.AR submitted that the ld. CIT(A) has dismissed all the five appeals filed by the assessee for non-prosecution without considering the facts and evidence and grounds of appeal and without passing a speaking order on merits. Further, the ld.AR of the assessee stated that Income Tax e-filing portal account of the assessee earlier operated and registered with the official email

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ID of the erstwhile auditors and all the statutory communications, notices and orders issued by the Income Tax Department were received on the said email ID and the said communications were not brought to the knowledge of the assessee in time and hence, the assessee could not participate in the appellate proceedings. Later, the ld. AR of the assessee raised the solitary issue in all the above appeals that the AO made additions purely on estimates without properly appreciating the replies and evidence furnished by the assessee. In view of the above, the ld.AR prayed to set aside the orders of the ld.CIT(A) and prayed for one more opportunity to the assessee by remitting the issue to the file of Assessing Officer. Further, ld.AR assured the bench that the ld.AR will represent on behalf of the assessee before the Assessing Officer to complete the proceedings effectively.

8.

Per contra, the ld.DR supported the orders on account of negligence of the assessee and hence prayed for confirming the order of the ld.CIT(A).

9.

We have heard the rival parties and perused the material available on record and gone through the orders of the lower authorities. We note that the AO has passed orders by partly considering the submission filed by the assessee and information available with the department. Further, all the five appeals have been dismissed by the ld.CIT(A), NFAC due to non-participation of the assessee. Since the assessee has failed to participate before the ld.CIT(A), we levy the cost of Rs.40,000/- (Rs.10,000/- for each appeal in respect of quantum assessment, excluding penalty appeal) to be paid to State Legal Aid Authority, Hon’ble High Court of Madras within 30 days from the date of receipt of this order and the assessee shall satisfy the payment of cost before the authorities.

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10.

Therefore, in the present facts and circumstances of the case and to meet the ends of justice, we deem it fit to give one more opportunity to the assessee. Therefore, we set aside all the five orders of the ld.CIT(A) for the A.Y. 2014-15, 2017-18, 2018-19 and 2020-21, and remit the matter back to the file of AO and direct the AO to denovo frame the assessment orders for all the four assessment years in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, assessee to be diligent and file written submissions and relevant documents if advised so, without seeking unnecessary adjournments.

11.

Since the order in quantum appeal in ITA No.830/Chny/2026 (supra) has been set aside and remitted back to the AO, the consequential penalty order passed u/s.270A of the Act dated 30.03.2023, is likewise hereby set aside and remitted back to the AO to decide the issue along with the quantum appeal.

12.

In the result, all the five appeals filed by the assessee are allowed for statistical purposes.

Order pronounced in the open court on 02nd June, 2026 at Chennai. (एस एस विश्वनेत्र रवि) (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) (S.S. VISWANETHRA RAVI) लेखा सदस्य/Accountant Member न्याविक सदस्य/Judicial Member

चेन्नई/Chennai, वदनांक/Dated, the 02nd June, 2026 Devadas

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आदेश की प्रतितिति अग्रेतिि/Copy to: 1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3.आिकर आिुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. विभागीि प्रविवनवि/DR 5. गार्ड फाईल/GF

DEVADAS GOPALANACHARY GOPALANACHARY Date: 2026.06.08 14:43:57 +05'30'

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