LOCALCUBE COMMERCE PRIVATE LIMITED,BENGALURU vs. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 4(1)(1), BENGALURU, BENGALURU

ITA 1261/BANG/2026Status: DisposedITAT Bangalore28 September 2026AY 2017-189 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal allowed the assessee's application for admission of additional evidence under Rule 29 of the ITAT Rules, 1963, finding that the documents were relevant for adjudicating the issues. Since these details were not examined by any lower authorities, the Tribunal, in the interest of justice, restored the matter to the jurisdictional AO for de novo adjudication after examining the additional evidence. The Tribunal set aside the impugned order and directed the assessee to cooperate with the AO. The Tribunal noted that as the matter was being restored to the AO, other grievances raised by the assessee did not require adjudication at that stage. The grounds raised by the assessee were allowed for statistical purposes. The ratio is that where an assessee is prevented from filing crucial evidence due to procedural constraints and short notice, and such evidence is filed before the appellate tribunal, the matter should be remanded to the AO for fresh adjudication after admitting the evidence, to ensure natural justice and proper examination of facts.

What were the facts?

The assessee, Localcube Commerce Private Limited, filed an appeal against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2017-18. The assessee contended that the assessment order was passed in violation of the principles of natural justice due to a very short time granted by the Assessing Officer (AO) to respond to a notice under section 142(1). The assessee also argued that the CIT(A) erred in refusing to admit additional evidence. The AO had made several additions and disallowances, including Rs. 86,45,46,568 under section 68, Rs. 16,17,94,276 under section 69A, Rs. 3,57,12,945 under section 68, Rs. 42,09,284 under section 68, Rs. 4,59,597 under section 14A, Rs. 73,42,917 under section 40(a)(ia), Rs. 44,53,284 for leave encashment, and Rs. 31,63,925 for prior period expenditure. The assessee sought to produce additional evidence before the ITAT.

What were the issues?

1. Whether the assessment order was passed in violation of the principles of natural justice, considering the short time granted by the AO to the assessee to furnish details (Section 142(1) of the Income Tax Act, 1961). 2. Whether the CIT(A) erred in refusing to admit additional evidence filed by the assessee under Rule 46A of the Income Tax Rules, 1962. 3. Whether the additions/disallowances made by the AO and upheld by the CIT(A) under various sections, including Sections 68, 69A, 14A, 40(a)(ia), and 37(1), are justified, particularly in light of the inability of the assessee to produce documentary evidence during the assessment and appellate proceedings. Assessee's Contentions: The assessee argued that the AO issued a notice under section 142(1) on 12/12/2019, granting only four days for a response, which was insufficient. The assessee requested an adjournment, but the AO passed the assessment order on 28/12/2019. The CIT(A) wrongly rejected the application for additional evidence. The assessee submitted that all relevant documents are now filed before the Tribunal and prayed for the matter to be restored to the AO for de novo adjudication. On merits, the assessee contended that most additions are unjustified, except for leave encashment. Revenue's Contentions: The revenue relied on the order of the CIT(A) and submitted that the prayer for admission of additional evidence under Rule 46A was rightly rejected by the CIT(A).

Which sections of the Income-tax Act were involved?

Section 142(1),Section 68,Section 69A,Section 14A,Section 40(a)(ia),Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SANDEEP SINGH KARHAIL

PER SANDEEP SINGH KARHIAL, JUDICIAL MEMBER:

The assessee has filed the present appeal against the impugned order dated 08/01/2026, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals

The order continues below.

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