VIRUTCHIGAM GOVINDHARAJ,METTUR vs. THE INCOME TAX OFFICER, WARD 1(6), SALEM

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ITA 3164/CHNY/2026Status: DisposedITAT Chennai22 October 2026AY 2017-188 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, while acknowledging the delays and lack of participation by the assessee before the lower authorities, decided to admit additional evidence submitted by the assessee under Rule 29 of the ITAT Rules, 1963. The Tribunal noted that the orders of the AO and CIT(A) were largely ex-parte due to the assessee's non-participation. The Tribunal considered the additional evidence to have a substantial bearing on the adjudication of the tax liability. Therefore, the Tribunal allowed the appeals for statistical purposes only. The matter was restored back to the AO with a direction to consider the additional evidence adduced by the assessee, after providing a proper opportunity of being heard as per section 282. The assessee was also directed to be vigilant, cooperate with the AO, and provide all relevant evidence without seeking adjournments, substantiating each entry in the bank statement. The Tribunal did not comment on the grounds raised by the assessee but allowed the appeals for statistical purposes to ensure a substantive adjudication of the tax liability. The decision in ITA No. 3163/Chny/2026 was applied mutatis mutandis to ITA No. 3164/Chny/2026.

What were the facts?

The assessee, Virutchigam Govindharaj, filed appeals against orders for Assessment Years 2016-17 and 2017-18. For AY 2016-17, the assessee's appeal was against the order of the Ld. Addl/JCIT(A)-3, Panaji, and for AY 2017-18, against the order of the Ld. CIT(A)/NFAC, Delhi. The assessee had filed a return of income under section 139(4) on 26.03.2018, declaring a total income of Rs. 2,85,690. The case was selected for limited scrutiny due to large cash deposits. The Assessing Officer (AO) made an addition of Rs. 28,90,028 under the head 'business income'. The assessee's appeal before the Ld. CIT(A) was dismissed for non-participation. The present appeals before the ITAT were filed with delays. The assessee runs a business named Sri Amman Broiler, purchasing and selling chicken. The assessee claimed to have purchased broiler chicken for Rs. 3,41,39,425 in FY 2015-16 and paid all dues within the same year. However, the assessee was not maintaining books of accounts or getting them audited as required under section 44AB.

What were the issues?

1. Whether the Ld. CIT(A)/JCIT(A) erred in sustaining the addition made by the AO by estimation of business income (turning on facts and law). 2. Whether the Ld. CIT(A)/JCIT(A) erred in failing to take cognizance of the income returned in subsequent assessment years based on audited books of account, financial statements, and tax audit reports (turning on facts and law). 3. Whether the Ld. CIT(A) erred in sustaining additions under section 69A without considering the existence of a business and that profit from turnover was already taxed (turning on section 69A, facts and law). 4. Whether the Ld. CIT(A) erred in failing to note that the AO applied an enhanced tax rate of 60.00% on additions under section 69A read with section 115BBE, which was applicable from AY 2018-19 (turning on section 115BBE, facts and law). 5. Whether the Ld. CIT(A) failed to consider the return filed under section 139(4) and compute interest correctly under section 234A (turning on section 139(4), section 234A, facts and law). Assessee's Contentions: - The impugned orders are wrong, illegal, and opposed to law, facts, and judicial interpretation. - The estimation of business income by the AO and sustained by the CIT(A) is wrong. - The CIT(A) failed to consider income returned in subsequent assessment years based on audited records. - Additions under section 69A are wrong as the business existence and taxed turnover profit were not considered. - The tax rate of 60.00% applied by the AO was from AY 2018-19, not applicable to the current assessment years. - The return filed under section 139(4) was not considered, leading to a non-application of mind and wrong computation of interest under section 234A. Revenue's Contentions: - No specific contentions from the revenue are recorded in the provided excerpt regarding the grounds of appeal.

Which sections of the Income-tax Act were involved?

Section 44AB,Section 69A,Section 115BBE,Section 139(4),Section 234A,Section 282

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: HONOURABLE SHRI GAGAN GOYAL & SHRI MANU KUMAR GIRI

Pronounced: 22.10.2026

आयकर अपीलीय अधिकरण ’डी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH: CHENNAI माननीय श्री गगन गोयल लेखा सदस्य के समक्ष एवं श्री मनु कुमार धगरर, न्याययक सदस्य BEFORE HONOURABLE SHRI GAGAN GOYAL, ACCOUNTANT MEMBER AND SHRI MANU KUMAR GIRI, JUDICIAL MEMBER आयकर अपील सं./ITA Nos. 3163 & 3164/Chny/2026 यनिाारण वर्ा /Assessment Years: 2016-17 & 2017-18 Virutchigam Govindharaj, v. Income Tax Officer, No.1186, Pattan Street, Mallikundam, Ward-1(6), Mettur, Salem, Tamil Nadu-636 458. Chennai. [PAN: BLLPG1076R] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. S. R. Srikrishna, Advocate, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Mr. Guru Prasad, Addl.CIT, Ld. DR सुनवाईकीतारीख/Date of Hearing : 21. 09.2026 घोषणाकीतारीख /Date of Pronouncement : 22.10.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: The appeal No. ITA No. 3163/Chny/2026 is preferred by the assessee against the order of Ld. Addl/JCIT(A), (hereinafter referred as the ‘Ld. Addl/JCIT(A)-3’), Panaji, dated 09.03.2026, for the Assessment Year (hereinafter referred as the ‘AY’) 2016-17 and the appeal No. ITA No. 3164/Chny/2026 preferred by the assessee against the order of Ld. Commissioner of Income Tax (A) / NFAC, (hereinafter referred as the ‘Ld. CIT(A)’), Delhi dated 16.12.2024, for the Assessment Year (hereinafter referred as the ‘AY’) 2017-18. GROUDS OF APPEAL ITA NO.3163/Chny/2026 1. The impugned order of the CIT (Appeals)/JCIT(A) is wrong, illegal, opposed to law, facts, judicial interpretation, principles, submissions made, details available on record, conventions and the additions sustained are liable to be cancelled.

ITA Nos.3163 & 3164/Chny/2026 Virutchigam Govindharaj 2 ESTIMATIONS OF BUSINESS INCOME IS WRONG: In law, facts and circumstances, the Commissioner of Income Tax (Appeals) /JCIT(A) has erred to sustain the addition made by assessing officer by estimation of business income. 3. CIT (A) HAS FAILED TO NOTE THE INCOME RETURNED FOR SUBSEQUENT YEARS: In the facts, law and circumstances of the case, the learned Commissioner of Income Tax (Appeals)/JCIT(A) has erred in failing to take cognizance of the income duly returned in subsequent assessment years, based on the audited books of account, financial statements, and tax audit reports. Such material ought to have been considered in adjudicating the present appeal. 4 PRAYER: The appellant craves leave to file additional grounds of appeal /Additional evidence, if any at the time of hearing and it is prayed that the contested addition be deleted, tax demand be cancelled, returned income be restored

ITA NO. 3164/Chny/2026

1.

The impugned order of the CIT (Appeals) is wrong, illegal, opposed to law, facts, judicial interpretation, principles, submissions made, details available on record, conventions and the additions sustained is liable to be cancelled. 2. RETURNS FILED u/s 139(4) NOT CONSIDERED NON-APPLICATION OF MIND: The Commissioner of Income Tax (Appeals) has failed to note that the assessing Officer did not take cognizance of the Income returned u/s 139(4) on 26.03.2018 vide Ack- 505537830260318, resulting in non-application of mind and computation of wrong interest u/s 234A of the Act 3. ESTIMATION OF BUSINESS INCOME IS WRONG: In law, facts and circumstances, the Commissioner of Income Tax (Appeals) has erred to sustain the addition made by assessing officer by estimation of business income. 4. CIT (A) HAS FAILED TO NOTE THE INCOME RETURNED FOR SUBSEQUENT YEARS: In the facts, law and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) has failed to take cognizance of the income duly returned in subsequent assessment years, based on the audited books of account, financial statements, and tax audit reports. 5. ADDITION u/s 69A IS WRONG: In Law, facts and circumstances, the Learned Commissioner of Income Tax (Appeals) has erred in sustaining additions u/s 69A of the Act, without considering the existence of a business and that the profit element from turnover has already been taxed 6. TAX RATE OF 60.00% IS FROM AY-2018-19: In law, facts and circumstances, the CIT (Appeals) has failed to note that the Assessing officer has erred to apply enhanced tax rate of 60.00% on additions u/s 69A r.w.s. 115BBE of the Act 7. PRAYER: The appellant craves leave to file additional grounds of appeal /Additional evidence, if any at the time of hearing and it is prayed that the contested addition be deleted, tax demand.be cancelled, returned income be restored

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ITA Nos.3163 & 3164/Chny/2026 Virutchigam Govindharaj ITA NO.3163/Chny/2026

2.

The brief facts of the case are that the assessee filed his return of income u/s. 139(4) of the Act on 26.03.2018 declaring total income at Rs. 2,85,690/-. Case of the assessee was selected for limited scrutiny under CASS for verification of “Large cash deposits in bank accounts during the year”. Ultimately, the case of the assessee was assessed after making addition under the head business amounting to Rs. 28, 90, 028/-. The assessee being aggrieved with this order preferred an appeal before the Ld. CIT(A) (with a delay of 138 days), who in turn dismissed the appeal of the assessee, as no active participation/submissions were made and the order was passed based on material available on records. The assessee being further aggrieved with the order, preferred the present appeal before us with a delay of 147 days. 3. We have gone through the order of the AO, the order of the Ld. CIT(A) and the submissions of the assessee along with the grounds taken before us. It is observed that the assessee has deposited the cash periodically and after depositing cash into bank account the same was transferred Suguna Foods Private Limited through cheque. The assessee is running business under the name and style of Sri Amman Broiler, purchasing broiler chicken from said company and selling it after cutting as well as retail also. The assessee has uploaded statement of account in respect of his business transaction with M/s. Suguna Foods Private Limited for the period from 01.04.2015 to 31.03.2016, which was received by the assessee from the said company M/s. Suguna Foods Pvt. Ltd., for confirmation of balance as on 30.03.2016. After perusal the same it is found that the assessee has been purchasing chicken from said company and during the F.Y. 2015-16, he has purchased broiler chicken for the cost of Rs. 3,41,39,425/- and all due amount was paid to the said company during the F.Y. 2015-16 itself. 4. However, the assessee is not maintaining any books of accounts and not getting accounts audited as required u/s. 44AB of the Income Tax Act, 1961, in respect of the above business and simply filing the return of income in form ITR-4S for the A.Y.2016-17 by admitting the total gross turnover and presumptive income of Rs. 7, 51, 380/- and Rs. 3, 23, 094/- respectively in respect of his business. Although Page 3 of 8

ITA Nos.3163 & 3164/Chny/2026 Virutchigam Govindharaj assessee never turned up with his books of accounts to substantiate the figure of Rs. 7, 51, 380/- and Rs. 3, 23, 094/-, this non-participation of the assessee left no option with the AO other than extrapolating the figures and applying profit rate of 8%. Before the Ld. CIT(A) also assessee was not available to present his case and to substantiate his arguments. For name sake the order of the Ld. CIT(A) was decided on merits but essentially is in the nature of ex-parte order only as mentioned (supra) the appeal filed before us is also time barred by 147 days, to explain this delay the assessee has filed an affidavit before us vide page nos. 5 to 11 of the paper book. 5. We have gone through the same and observed that the case of the assessee was taken in scrutiny vide notice dated 09.08.2018, order was passed on 05.12.2018, appeal was filed before the Ld. CIT(A) on 21.06.2019 (till here there was no COVID-19 and any medical problem with the son of the assessee), order by the Ld. CIT(A) was passed on 16.10.2025 and the present appeal before us was filed on 27.05.2026. In view of the chronology discussed (supra) in our opinion the non- participation and delay at the hand of the assessee was either in negligence or deliberate attempt. Now the assessee has came forward with a petition in terms of Rule 29 of Income Tax (Appellate Tribunal) Rules, 1963. On this petition filed by the assessee we deem it fit to discuss the provisions of Rule 29 of Income Tax (Appellate Tribunal) Rules, 1963 in our coming paras.

6.

In view of the above our observations discussed (supra), it is observed that the participation of the assessee before the authorities below is not appreciable and based on the submissions of the assessee before them, we do not find any infirmity in their respective orders, i.e. AO and Ld. CIT(A). But, as the assessee has filed the documents (originally required to be filed before the authorities below) before us along with a petition under Rule 29 of the ITAT Rules, 1963 (that is why the assessee needs to file an application in terms of Rule 29 of the Appellate Tribunal Rules, 1963). Here, it is pertinent to mention that none of the grounds taken by the assessee are eligible to be adjudicated except the application filed by the assessee in terms of Rule 29 of Appellate Tribunal Rules, 1963.

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ITA Nos.3163 & 3164/Chny/2026 Virutchigam Govindharaj 7. Now, based on the above facts, this tribunal has to verify only the application filed by the assessee in terms of Rule 29 of the Appellate Tribunal Rules, 1963. For ready reference Rule 29 of the Appellate Tribunal Rules, 1963 is being reproduced below as under:

Rule - 29, INCOME-TAX (Appellate Tribunal) Rules, 1963 Production of additional evidence before the Tribunal. 29. The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but if the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or , if the INCOME-TAX authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. Now, in the light of the provisions of the Rule 29 of the Appellate Tribunal Rules, 1963, it can be concluded that there are no rights vested with the assessee to file even an application before the Bench. Rather, it is the prerogative of the bench to Order for production of any document or witness to be examined.

8.

In the case as discussed (supra), there was ample opportunities given to the assessee by the AO and the Ld. CIT (A), but in vain. The assessee never came forward with the relevant documents/explanations. This apart, Rule 18(4) of the INCOME-TAX (Appellate Tribunal) Rules, 1963, is also referable. That Rule provides that if any party desires to file additional evidence, then the same shall be filed by way of a separate paper book containing such particulars as are referred to in sub- rule (3) accompanied by an application stating the reasons for filing such additional evidence. If rule 18(4) is read with Rule 29 of the Appellate Tribunal Rules, 1963, there cannot be any difficulty in holding that in terms of Rule 29 of the Appellate Tribunal Rules, 1963, an additional evidence can also be produced by the assessee on an application, provided the Tribunal should satisfy as to the reasons before entertaining such additional evidence and the Tribunal should also afford sufficient opportunity to the Revenue to rebut those additional evidence.

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ITA Nos.3163 & 3164/Chny/2026 Virutchigam Govindharaj 9. That apart, there was no specific objection raised by the Revenue at the time when the application was filed. In this context, we may also refer to the observation of the Tribunal that the Revenue did not contradict any of the averments made by the assessee in the petition seeking for production of additional evidence. In the given facts of the case, the Tribunal is considered to be the first appellate authority, as far as the issue involved in the present matter is concerned, i.e. extrapolating the turnover and applying profit ratio. It is true that before the documents filed by way of additional evidence were considered, the Revenue had the opportunity to refute those documents. Nevertheless, in terms of Rule 29 of the Income-tax (Appellate Tribunal) Rules, 1963 a provision of opportunity is contemplated, and, in our opinion, such opportunity shall be given to the Assessing Officer. Rebuttal must be only by the Assessing Officer, who will be in a better position to verify the genuineness of those documents and accordingly, he may accept or may not accept the case of the assessee. In the event certain doubts are entertained based on the documents produced as additional evidence, it would be only proper for the Tribunal to remit the matter.

10.

Although we do not understand why the same has never been filed before the authorities below, for sake of better adjudication of tax liability, we allow the assessee to submit the same before us and accept also. The additional evidence submitted by the assessee is duly accepted. We have given thoughtful consideration, and are of the considered view, that as the information as has been filed by the assessee before us as additional evidence would have substantial bearing on the adjudication of the issue in hand, therefore, the same merits to be admitted. Thus, in terms of our aforesaid observations admit the additional evidence placed on our record by the assessee under Rule 29 of the Income-Tax Appellate Tribunal Rules, 1963. This Tribunal being the final fact-finding authority, endeavor is always to deal with matters on substantive basis, whereas in this matter the orders of both the authorities below are in the nature of ex-parte only. Hence, for determination of correct tax liability and substantive orders in place, we allow the appellant to submit additional evidence before us but the same is to be considered by the AO.

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ITA Nos.3163 & 3164/Chny/2026 Virutchigam Govindharaj 11. In view of the above, without any comments on the grounds raised by the assessee (both legal and factual), the appeal of the assessee is allowed for statistical purposes only and the matter is restored back to the AO with a direction to consider the evidence adduced by the assessee before us after giving a proper opportunity of being heard as per the provisions of section 282 of the Act. Further, the assessee is also directed to be vigilant and cooperate in the proceedings before the AO and must come forward with relevant evidence (as submitted before us) without seeking any adjournment, to substantiate each and every entry in the bank statement (which is under challenge and added back as business income) with narration and has to fulfill the requirements of the Act.

12.

In the result, the appeal of the assessee is allowed for statistical purposes only in above terms and directions. ITA NO.3164/Chny/2026 13. The facts of the case and nature of assessment orders are similar to what we have discussed in ITA NO.3163/Chny/2026 i.e. ex-parte orders, hence, the decision of ITA NO.3164/Chny/2026 will apply mutatis mutandis here also. Resultantly, the grounds raised by the assessee are allowed for statistical purposes only.

14.

In the result, the appeal of the assessee is allowed for statistical purposes only in above terms and directions.

Order pronounced on the 22nd day of October 2026, in Chennai.

Sd/- Sd/- (मनु कुमार गिरर) (गगन गोयल) (MANU KUMAR GIRI) (GAGAN GOYAL) न्याययक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, ददनाांक/Dated: 22nd October 2026. KB

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ITA Nos.3163 & 3164/Chny/2026 Virutchigam Govindharaj आदेश की प्रयतललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रयतयनधि/DR 5. गार्ड फाईल/GF K Digitally signed by K BABU BABU Date: 2026.10.26 09:43:05 +05'30'

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