DY. COMMISSIONER OF INCOME TAX, NOIDA vs. UFLEX LIMITED, DELHI

ITTPA 272/DEL/2026Status: DisposedITAT Delhi21 August 2026AY 2020-21153 pages
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What were the facts?

The assessee, Uflex Ltd., is a flexible packaging solution provider with manufacturing facilities in India and abroad. The appeals concern Assessment Years 2020-21, 2021-22, and 2022-23, involving orders passed by the Assessing Officer (AO) under Section 143(3) read with Section 144C(3) of the Income Tax Act, 1961, and subsequent orders of the Commissioner of Income Tax (Appeals). The disputes arise from adjustments made by the Transfer Pricing Officer (TPO) for interest on delayed receivables and corporate guarantee fees. Additionally, the AO made additions for unexplained unsecured loans, alleged commission on these loans, disallowance of deductions under Section 80IB, disallowed rent paid to the spouse of the Chairman, and additions under Section 14A. A significant addition of INR 84.00 crores was made under Section 69A based on a statement recorded during a search and seizure action concerning alleged cash received from a group company, Montage Enterprises P. Ltd. The assessee's appeals primarily challenge the denial of cross-examination opportunities.

What did the Tribunal hold?

The Tribunal held that the denial of the opportunity to cross-examine Shri Manoj Kandpal, whose statement was the sole basis for the addition of INR 84.00 crores under Section 69A of the Act, constitutes a gross violation of the principles of natural justice. The Tribunal relied on the Supreme Court's decision in *Andaman Timber Industries vs. CCE* and the Delhi High Court's decision in *Fair Invest Ltd.*, which clearly state that an order based on statements of third parties without allowing cross-examination is a serious flaw and makes the order a nullity. The Tribunal found that the AO made no independent inquiries to corroborate the allegation of cash receipt, and no material was seized from the assessee or the group company indicating such a payment. The burden was on the AO to prove the allegation with direct material evidence, which he failed to do. Consequently, the Tribunal allowed the assessee's appeal on this legal ground, quashing and setting aside the assessment order. The Tribunal noted that documentary evidence carries more weight than oral statements, especially when the latter are disputed and the AO fails to prove them untrue. The issue of corporate guarantee fee was also remanded for fresh consideration.

What were the issues?

1. Whether the assessment order passed by the AO, which relied on statements of third parties without providing the assessee an opportunity to cross-examine them, is vitiated by a violation of the principles of natural justice, thus requiring it to be quashed, as per Section 143(3) read with Section 144C(3) of the IT Act? (Question of law and fact) Assessee's Contention: The assessee argued that the AO and CIT(A) failed to provide an opportunity to cross-examine Shri Manoj Kandpal, whose statement was the basis for the addition of INR 84.00 crores under Section 69A. This denial of cross-examination violates the principles of natural justice, rendering the assessment order null and void. The assessee relied on the Supreme Court's decision in *Andaman Timber Industries vs. CCE* and the Delhi High Court's decision in *Fair Invest Ltd.*. Revenue's Contention: The judgment does not record specific arguments from the revenue regarding the denial of cross-examination. However, the revenue's appeals implicitly support the additions made by the AO.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(3),Section 80G,Section 80IB,Section 68,Section 69C,Section 69A,Section 14A,Section 92CA,Section 132(4)

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “I” BENCH: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER

IT(TP)A No.272/Del/2026 [Assessment Year : 2020-21] 2nd Floor, Sector-3, Pamposh Enclave, Greater Noida, U.P-201301 Kailash-1, New Delhi-110048. PAN-AAACF0109J APPELLANT RESPONDENT

IT(TP)A No.259/Del/2026 [Assessment Year : 2020-21] 2nd Floor, Sector-3, Kailash-1, New Delhi-110048. Noida, U.P-201301 PAN-AAACF0109J APPELLANT RESPONDENT [Assessment Year : 2021-22] DCIT/ACIT vs Uflex Ltd. ARTO Complex, 305, 3rd Floor, Bhanot Corner 2nd Floor, Sector-33, Pamposh Enclave, Greater Noida, U.P-201307 Kailash-1, New Delhi-110048. PAN-AAACF0109J APPELLANT RESPONDENT

IT(TP)A No.260/Del/2026 [Assessment Year : 2021-22] Uflex Ltd. vs DCIT/ACIT 305, 3rd Floor, Bhanot Corner Central Circle-II, Pamposh Enclave, Greater 2nd Floor, Noida, Kailash-1, New Delhi-110048. U.P-201301 PAN-AAACF0109J APPELLANT RESPONDENT

IT(TP)A No.272/Del/2026 & Others

IT(TP)A No.280/Del/2026 [Assessment Year : 2022-2

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