Arunachalam vs. Income Tax Officer

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TCA/135/2025HC Madras13 August 2025Bench: Honourable The CHIEF JUSTICE6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial questions of law framed by the appellant did not arise for consideration and therefore did not need to be answered. The Court noted that the appellant's counsel candidly admitted that notices were served through electronic mode and that the mode of service was not assailed. The judgment also highlighted that the appellant had remained absent before the CIT (Appeals) despite opportunities and that the ITAT's order recorded multiple notices issued. Consequently, the Court found the appeal to be without merit and dismissed it. No specific findings were made on the merits of the grounds raised by the appellant, as the appeal was dismissed on procedural grounds.

What were the facts?

This is an appeal filed by the appellant (assessee) against an order of the Income Tax Appellate Tribunal (ITAT), Madras “B” Bench, Chennai, dated 31.07.2024 in ITA No.1009/CHNY/2024. The appeal was filed before the High Court of Judicature at Madras. The appellant had previously approached the CIT (Appeals) and the ITAT. The High Court granted an opportunity for hearing and considered revised substantial questions of law. The judgment notes that the appellant had remained absent and did not participate in proceedings before the CIT (Appeals) despite opportunities granted. The ITAT's order also recorded multiple notices issued to the appellant.

What were the issues?

1. Whether, under the facts and circumstances, the ITAT was correct in not adjudicating grounds of appeal Nos. 5, 6, and 7, which argued that additions under Section 68 of the Income Tax Act, 1961, cannot be based solely on bank statement entries when no books of account were maintained by the appellant? 2. Whether, under the facts and circumstances, the ITAT was correct in not adjudicating grounds of appeal Nos. 3 and 4, which contended that the reopening of assessment was without jurisdiction as there was neither a reason to believe nor an escapement of income? 3. Whether, under the facts and circumstances, the ITAT was correct in confirming the orders of lower authorities without discussing the merits, especially when no fact-finding authority had adjudicated the issues on merits, and if this constituted a gross violation of principles of natural justice? Assessee's Contentions: The appellant argued that additions under Section 68 could not be made solely on bank statements if no books of account were maintained, that reopening was without jurisdiction, and that the ITAT failed to adjudicate on merits, violating natural justice. Revenue's Contentions: The judgment does not record specific contentions from the revenue.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

TCA No.135 of 2025 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 13.08.2025 CORAM THE HON'BLE MR.MANINDRA MOHAN SHRIVASTAVA, CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE SUNDER MOHAN TCA No.135 of 2025 Arunachalam : Appellant versus Income Tax Officer, Non-corp Ward 15(1) Wanarpathy Block (New Block) 2nd Floor, 121, MG Road, Nungambakkam, Chennai 600 034 : Respondent Prayer: Appeal filed against the order of the Income Tax Appellate Tribunal, Madras “B” Bench, Chennai, dated 31.07.2024 in ITA No.1009/CHNY/2024. For Appellant : Ms.N.V.Laksmi Page 1 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/08/2025 04:18:39 pm ) TCA No.135 of 2025 JUDGMENT (Delivered by the Hon'ble Chief Justice) After an opportunity of hearing was granted on the last date of hearing, revised substantial questions of law are submitted for our consideration. 2. The appeal raises the following substantial questions of law: “1. Whether under the facts and circumstances of the case, the ITAT was right in not adjudicating the grounds of appeal Nos.5, 6 and 7 raised by the appellant before it, that addition under Section 68 of the Act could not be made solely based on entries in the bank statement, which do not constitute books of account under the Act particularly when the appellant had not maintained any books of accounts? 2. Whether under the facts and circumstances of the case, the ITAT was right in not adjudicating the grounds of appeal Nos.3 and 4 before it, that the reopening is without jurisdiction since there was neither reasons to believe nor there was an escapement of income? 3. Whether under the facts and circumstances Page 2 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/08/2025 04:18:39 pm ) TCA No.135 of 2025 of the case, the ITAT was right in confirming the orders of the lower authorities without any discussion on merits of the issues, particularly when no fact- finding authority has adjudicated the issues on merits? Is the order of the ITAT not in gross violation of principles of natural justice?” 3. The order passed by the CIT (Appeals) clearly shows that even after an opportunity was granted to the appellant to press his appeal before the said authority, on the ground that earlier he was not afforded an opportunity to press his appeal, the appellant again remained absent and did not participate in the proceeding. The order of the Appellate Tribunal clearly records in paragraph 5 that notices were issued to the appellant on 24.08.2023, 14.09.2023, 05.10.2023, 21.11.2023, 18.12.2023, 01.01.2024 and 09.01.2024. 4. Learned counsel for the appellant failed to place before this Court any such ground urged before learned Appellate Tribunal that the notice of the proceedings were never served upon him. 5. In fact, during the course of arguments, learned counsel for Page 3 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/08/2025 04:18:39 pm ) TCA No.135 of 2025 the appellant candidly admits that notices were served through electronic mode. The appellant has not assailed the mode of service of notice. 6. Therefore, the substantial questions of law as framed by the appellant do not arise for consideration and need not be answered. The appeal is sans merit and the same is dismissed. There will be no order as to costs. (MANINDRA MOHAN SHRIVASTAVA, CJ.) (SUNDER MOHAN, J.) 13.08.2025 Index : Yes/No Neutral Citation : Yes/No tar Page 4 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/08/2025 04:18:39 pm ) TCA No.135 of 2025 To 1.Income Tax Officer, Non-corp Ward 15(1) Wanarpathy Block (New Block) 2nd Floor, 121, MG Road, Nungambakkam, Chennai 600 034 2.The Income Tax Appellate Tribunal, Madras “B” Bench, Chennai Page 5 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/08/2025 04:18:39 pm ) TCA No.135 of 2025 THE HON'BLE CHIEF JUSTICE AND SUNDER MOHAN

, J.

(tar) TCA No.135 of 2025 13.08.2025 Page 6 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 18/08/2025 04:18:39 pm )

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