Principal Commissioner of Income Tax vs. Ganesan Anbuselvam

PDF · subscribers
TCA/40/2026HC Madras12 June 2026Bench: Honourable The CHIEF JUSTICE6 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT did not err in confirming the order of the CIT(A). The Court noted that the CIT(A) had admitted additional evidence under Rule 46A and called for a remand report from the AO. In the remand proceedings, the AO accepted the assessee's explanations and evidence, acknowledging that the deposits were consistent with business activity. The CIT(A) deleted the additions solely based on this remand report. The ITAT had also found that the additional evidence was admitted in accordance with Rule 46A without any procedural lapse or prejudice to the Revenue. Therefore, when the CIT(A)'s order was based on the AO's acceptance of the assessee's explanation and evidence, and the deposits were found consistent with business activity, the CIT(A) rightly deleted the additions, which was then correctly taken note of and confirmed by the ITAT. The Court found no error or infirmity in the findings and concluded that no substantial question of law arose for consideration.

What were the facts?

The assessee, Shri Ganesan Anbuselvam, engaged in the business of selling alcoholic beverages, filed his return of income for assessment year 2017-18 admitting a total income of Rs.11,97,090. The case was selected for scrutiny, and the Assessing Officer (AO) made additions of Rs.2,27,76,680 for unaccounted purchases under Section 69C of the Income Tax Act, 1961. The assessee appealed to the Commissioner of Income Tax (Appeals) (CIT(A)). The CIT(A) admitted additional evidence under Rule 46A and called for a remand report from the AO. Based on the AO's report, which accepted the assessee's explanations and evidence, the CIT(A) deleted the additions. The Revenue appealed to the Income Tax Appellate Tribunal (ITAT), which dismissed the appeal, finding that the CIT(A) had correctly deleted the additions based on the AO's remand report.

What were the issues?

1. Whether the ITAT erred in confirming the order of the CIT(A) solely based on the remand report of the Assessing Officer, which was purportedly based on affidavits from non-tax paying entities, leading to perverse findings (Question of law). Assessee's Contention: The judgment does not record any specific contentions from the assessee. Revenue's Contention: The learned counsel for the appellant (Revenue) submitted that the ITAT could not have confirmed the order of CIT(A) merely by relying on the remand report of the Assessing Officer. The report was based on an affidavit by two non-tax paying entities, rendering the findings perverse.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(1),Section 143(2),Section 142(1),Section 69C

AI-generated summary — verify with the full judgment below

T.C.A.No.40 of 2026 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 12.06.2026 CORAM THE HONOURABLE MR. SUSHRUT ARVIND DHARMADHIKARI, CHIEF JUSTICE AND THE HONOURABLE MR. JUSTICE G.ARUL MURUGAN T. C.A.

No.4

0 of 2026

Principal Commissioner of Income Tax Madurai Appellant(s) Vs Shri Ganesan Anbuselvam No.11-FA, Standard Colony Thiruthangal, Tamil Nadu 626 130 PAN : ADQPA9937R Respondent(s) PRAYER: Appeal filed under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal “B” Bench, Chennai dated 26.09.2025 in ITA.No.3181/Chny/2024. For Appellant(s) : Mr.V.Mahalingam Senior Standing Counsel Page 1 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 19/06/2026 05:06:07 pm ) T.C.A.No.40 of 2026 JUDGMENT (Delivered by G.ARUL MURUGAN, J.) The Revenue has preferred this tax case appeal under Section 260A of the Income Tax Act, 1961, assailing the order of the ITAT “B” Bench, Chennai, dated 26.09.2025, in ITA.No.3181/Chny/2024. 2. The assessee, an individual engaged in the business of selling alcoholic beverages in the name and style of Anbu Wines Bar, has filed his return of income for the assessment year 2017-18 on 31.03.2018, admitting a total income of Rs.11,97,090/-, which was processed under Section 143(1) of the Income Tax Act, 1961 (in short “the Act”). 3. The case was selected for scrutiny under CASS. Notice under Section 143(2) of the Act dated 21.09.2018 was issued to the assessee. Further, notice under Section 142(1) of the Act was issued on 07.12.2019 calling for details. After affording several opportunities and considering the cash deposits made in the accounts and on noting the unaccounted purchases made, the Assessing Officer made additions for unaccounted purchases of Rs.2,27,76,680/- under Section 69C of the Act. Page 2 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 19/06/2026 05:06:07 pm ) T.C.A.No.40 of 2026 4. The assessee filed appeal before the Commissioner of Income Tax (CIT) (Appeals). Pursuant to the additional evidences admitted under Rule 46A of the Income Tax Rules, 1962, the CIT (Appeals) called for a remand report from the Assessing Officer. Based on the Assessing Officer’s report, CIT (Appeals) deleted the additions. The revenue filed an appeal before the Income Tax Appellate Tribunal (ITAT). The ITAT, after finding that the CIT (Appeals) had deleted the additions only based on the remand report of the Assessing Officer where the Assessing Officer has accepted the Assessee's explanations and evidences, dismissed the appeal. 5. The learned counsel appearing for the appellant submitted that the ITAT could not have confirmed the order of CIT (Appeals), merely by relying on the remand report of the Assessing Officer. The report of the Assessing Officer was based on an affidavit by two non tax paying entities and, therefore, the findings arrived at are perverse. 6. Heard the learned counsel for the appellant and perused the materials available on record. Page 3 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 19/06/2026 05:06:07 pm ) T.C.A.No.40 of 2026 7. The assessee has filed the return of income for the assessment year 2017-18 admitting a total income of Rs.11,97,090/-. Pursuant to the case being selected for scrutiny, notice dated 21.09.2018 was issued under Section 143(2) of the Act and after inquiry, the Assessing Officer made additions towards the unaccounted purchases for a sum of Rs.2,27,76,680/- to the income under Section 69C of the Act. 8. In the appeal preferred, the assessee had filed additional evidences under Rule 46A, which came to be admitted, pursuant to which, the CIT (Appeals) had called for a remand report from the Assessing Officer. In the remand proceedings, the Assessing Officer accepted the Assessee's explanations and evidences and ultimately, acknowledged that the deposits were consistent with business activity. Only based on the Assessing Officer's remand report, the CIT (Appeals) deleted the additions. The Tribunal had also found that the additional evidences were admitted in accordance with Rule 46A and there was no procedural lapse or prejudice caused to the Revenue. Page 4 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 19/06/2026 05:06:07 pm ) T.C.A.No.40 of 2026 9. When the order of CIT (Appeals) was based on the remand report submitted by the Assessing Officer accepting the assessee’s explanation and evidences and it was found that the deposits were consistent with the business activity, the CIT (Appeals) rightly deleted the additions, which was taken note of and confirmed by the ITAT. 10. In such circumstances, we see no error or infirmity in the findings arrived at and no substantial question of law arises for consideration. Accordingly, the tax case appeal stands dismissed. (SUSHRUT ARVIND DHARMADHIKARI, CJ.) (G.ARUL MURUGAN, J.) 12.06.2026 Index : Yes/No Neutral Citation : Yes/No gya Page 5 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 19/06/2026 05:06:07 pm ) T.C.A.No.40 of 2026 THE HON'BLE CHIEF JUSTICE AND G.ARUL MURUGAN

, J.

gya T.C.A.No.40 of 2026 12.06.2026 Page 6 of 6 https://www.mhc.tn.gov.in/judis ( Uploaded on: 19/06/2026 05:06:07 pm )

More judgments on Section 142(1)

All 17,244 judgments and leading authorities on Section 142(1) →

Recent GST High Court judgments

Search GST case law →