What did the Tribunal hold?

The tribunal found that the net profit ratios of the assessee for previous years, averaging to 0.46%, were reasonable. Therefore, the addition of 2% by the AO and CIT(A) was not justified.

The assessee's appeal was filed with a delay of 161 days, which was condoned by the tribunal. The Assessing Officer (AO) added 2% of total turnover to the assessee's income, which was confirmed by the CIT(A).

What were the issues?

The primary issue was whether the addition of 2% on total turnover by the AO was justified, or if a lower average profit rate should be considered.

Sis Agencies, Tirunelveli vs ITO | ITAT Chennai 2026

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

Hearing: 21.08.2026Pronounced: 31.08.2026

आयकर अपीलीय अिधकरण, ’ ए ’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI �ी एस.एस. िव�ने� रिव, �ाियक सद� एवं �ी एस.आर. रघुनाथा, लेखा सद� के सम$ BEFORE SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER & SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No. 3434/Chny/2026 िनधा%रण वष%/Assessment Year: 2018-19 SIS Agencies, Vs. Income Tax Officer, No. 68 SN High Road, Ward -4, Kailasapuram, Tirunelveli. Tirunelveli – 627 001. [PAN: AAVFS-8945-B] (अपीलाथ'/Appellant) (()थ'/Respondent) अपीलाथ' की ओर से / Appellant by : Mr. T. Vasudevan, Advocate ()थ' की ओर से/Respondent by : Ms. Anshu Sharatwat, Addl. CIT सुनवाई की तारीख/ Date of hearing 21.08.2026 : घोषणा की तारीख /Date of Pronouncement : 31.08.2026 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 13.10.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2018-19.

:-2-: ITA No: 3460/Chny/2026

We find that this appeal was filed with a delay of 161 days. The

assessee filed an affidavit explaining the reasons to condone the said

delay. On perusal of the same and upon hearing both the parties, we

find the reasons stated by the assessee are bonafide which really

prevented the assessee in filing the appeal in time. Thus, delay of 161

days condoned.

At the outset, it is noted that the AO adopted 2% on total turnover

and added Rs.5,22,164/- to the total income of the assessee. The

ld.CIT(A) confirmed the same. Having aggrieved by the order of the

ld.CIT(A), the assessee is before us.

The ld.AR, Mr. T. Vasudevan, Advocate, placed on record chart showing the turnover GP, NP ratios for various assessment years before

us. He argued that the 2% as adopted by the AO which was confirmed

by the ld.CIT(A) is not justified and drew our attention to the net profit

ratios for subsequent years, as well as the earlier years. He prayed to

adopt the average profit at 0.46% to the present case.

5 The ld.DR, Ms. Anshu Sharatwat, Addl.CIT, opposed the same.

:-3-: ITA No: 3460/Chny/2026

Having heard both the parties, it is noted for AY 2019-20, the net profit ratio shown by the assessee is 0.29% and for immediate earlier year as on 31.03.2017 (AY 2017-18 shown 0.43%) likewise for AYs 2016-17 & 2015-16, the assessee has shown net profit ratio at 0.71% and 0.46% respectively. Considering the average, we find net profit ratio as contended by the ld.AR is reasonable. Therefore, the profit rate at 2% as allowed by the AO and ld.CIT(A) is not justified. We therefore, direct the AO to adopt 0.46% on total turnover of the assessee of Rs.2,61,08244/-. Thus, order of the ld.CIT(A) is set aside and grounds raised by the assessee are allowed.

In the result, appeal filed by the assessee is allowed. Order pronounced on 31st August, 2026 at Chennai. Sd/- Sd/- (S.R. RAGHUNATHA) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated: 31.08.2026 JPV आदेश की (ितिलिप अ.ेिषत/Copy to: 1. अपीलाथ'/Appellant, 2.()थ'/ Respondent, 3. आयकर आयु//CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय (ितिनिध/DR & 5. गाड% फाईल/GF

PRASANNA Digitally signed by PRASANNA VANI JETTY VANI JETTY Date: 2026.09.01 15:23:57 +05'30'

SIS AGENCIES,TIRUNELVELI vs. INCOME TAX OFFICER WARD-4 TIRUNELVELI, TIRUNELVELI

What did the Tribunal hold?

What were the facts?

What were the issues?

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