V G. RAJAMANI AGENCIES PVT. LTD.,COIMBATORE vs. ITO, CORPORATE WARD-1,, COIMBATORE

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ITA 935/CHNY/2026Status: DisposedITAT Chennai24 June 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The CIT(A) set aside the assessment order to the Assessing Officer without adjudicating the grounds challenging the validity of reassessment proceedings. The Tribunal remanded the matter back to the CIT(A) to decide these validity grounds first.

What were the facts?

The assessee company filed its return of income for AY 2017-18. Subsequently, reassessment proceedings were initiated based on information about cash deposits during demonetization. The Assessing Officer made an addition on account of under-valuation of closing stock.

What were the issues?

Whether the CIT(A) erred in setting aside the case without adjudicating the grounds challenging the validity of reassessment proceedings.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144B,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI BENCHES, CHENNAI

Before: SHRI INTURI RAMA RAO & SHRI S.S.VISWANETHRA RAVI

Pronounced: 24.06.2026

आदेश / ORDER PER INTURI RAMA RAO, ACCOUNTANT MEMBER: This appeal filed by the Assessee directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], dated 20.01.2026 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2017-18.

2.

The Assessee raised the following grounds of appeal : “1) The Impugned Order is bad and erroneous in law and liable to be quashed.

2) The Learned Commissioner (Appeals) erred in mechanically setting aside the case back to the file of the Assessing Officer without discharging legal obligation to adjudicate legal issues raised therein, causing prejudice to the Appellant.

3) Without prejudice, the Learned Commissioner (Appeals) also erred in reproducing the Statement of Facts itself as the Written Submissions filed by the Appellant, in Page No. 3, Para No.5, which exhibits that the detailed arguments and precedents relied upon by the Appellant were completely brushed aside.

4) Without prejudice, the Learned Commissioner (Appeals) also erred in not considering that the Reassessment Proceeding is null and void, as only addition was made in respect of Undisclosed Investment in Stock of Rs.2.40 Crores u/s.69 without making addition on the reason recorded, being Cash Deposits into Bank during Demonetization Period, though specifically raised in Ground No.4(d) and elaborated in Written Submissions along with reliance on observation made in Ld. PCIT's Order u/s.263 dated 21/06/2023.

5) Without prejudice, the Learned Commissioner (Appeals) also erred in not considering that the Reassessment Proceeding is void ad initio, as the reason recorded for reopening contained inherent inconsistent and also did not disclose any tangible material so as to upset the finality of completed assessment u/s.143(1), though it was specifically raised in Ground No.3 and also elaborated in the Written Submissions filed.

6) Without prejudice, the Learned Commissioner (Appeals) also erred in not considering that the Reassessment Proceeding is null and void, as Notice u/s.148 dated 31/03/2021 was not signed either digitally or manually, though specifically argued by the Appellant in support of Ground No.1 with reliance on binding decisions.

And for other grounds and reasons that may be adduced later, the Appellant sincerely prays that the present appeal may be admitted, duly considered and justice be rendered.”

3.

Briefly, the facts of the case are that the appellant is a Company incorporated under the provisions of Companies Act. It is engaged in the business of wholesale and retail trading of Nestle Products and Ujala Products. The Return of Income for the Assessment Year 2017-18 was filed on 31.10.2017 disclosing the total income at Rs.1,05,840/-. Against the said Return of Income, there was no scrutiny assessment.

4.

Subsequently, based on the information that the appellant company made cash deposits in Specified Bank Notes(SBN) in the bank account during the Demonetization Period of Rs.1.28 crores, the Assessing Officer formed an opinion that the income got escaped assessment from tax. Accordingly, a notice u/s.148 of the Act on 31.03.2021. In response to notice u/s.148, the appellant filed Return of Income on 21.03.2021 disclosing income of Rs.1,05,840/-.

However, the Return of Income remains unverified. Against the said Return of Income, the assessment was completed by the NFAC(hereinafter called ‘AO’) vide order dated 30.03.2022 passed u/s.147 r.w.s 144 read with section 144B of the Act at a total income of Rs.2,41,81,720/-. While doing so, the Assessing Officer made addition of Rs.2,40,85,884/- on account of under-valuation of closing stock.

5.

Being aggrieved by the above assessment order, the appellant preferred an appeal before ld.CIT(A), challenging inter-alia the validity of the initiation of the re-assessment proceedings. However, ld.CIT(A) without adjudicating the grounds of appeal challenging the validity of the re-assessment proceedings, set- aside the assessment order to the file of Assessing Officer to make fresh assessment.

6.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal. The ld.Counsel submits that ld.CIT(A) had failed to adjudicate the grounds of appeal raised before him challenging the very validity of the re-assessment proceedings. Therefore, the matter may be remanded back to the file of ld.CIT(A) with a direction to dispose of the grounds of appeal challenging the very validity of the re-assessment proceedings.

7.

On the other hand, learned Sr.DR has no serious objection.

8.

We order accordingly with a direction to ld.CIT(A) to dispose of the grounds of appeal raised before him from “a to e” which are extracted by ld.CIT(A) at page no.2 of the order. In the circumstances, we remit the matter back to the file of ld.CIT(A) for adjudication of the issues in appeal on merits after affording an opportunity of being heard to the assessee.

9.

In the result, appeal filed by the Assessee stands partly allowed for statistical purpose. Order pronounced in the open Court on 24th June, 2026.

Sd/- Sd/- (SS VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai; िदनांक / Dated : 24th June, 2026 SGR, Sr.PS आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT Chennai/Madurai/Coimbatore/Salem. 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, चे�नई / DR, ITAT Chennai. गाड� फ़ाइल / Guard File. 5. GANGADHARA Digitally signed by GANGADHARA RAO SALEELA RAO SALEELA Date: 2026.07.01 17:28:52 +05'30'

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