M/S. FALLING WATERS,CHENNAI vs. ITO, NON CORP 10(1), CHENNAI, CHENNAI

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ITA 1849/CHNY/2025Status: DisposedITAT Chennai26 August 2025AY 2017-18Bench: SHRI MANU KUMAR GIRI (Judicial Member), SHRI AMITABH SHUKLA (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee should be granted an opportunity to file submissions and evidence, keeping in mind natural justice. The impugned order was set aside, and the appeal was restored to the CIT(A) for fresh hearing.

What were the facts?

The assessee claimed expenses for legal charges without deducting TDS. An addition was made on account of shortfall in revenue recognition. The CIT(A) confirmed the addition.

What were the issues?

Whether the assessee should be granted further opportunity to present evidence and submissions before the CIT(A) for proper adjudication of the appeal.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI AMITABH SHUKLA

Hearing: 26.08.2025Pronounced: 26.08.2025

आदेश / O R D E R

PER MANU KUMAR GIRI, JM:

1.

The captioned appeal filed by the assessee is directed against order of the Ld. Commissioner of Income Tax (Appeal)/NFAC, Delhi, [‘CIT(A)’ in short] dated 11.04.2025 for Assessment Year 2017-18.

2.

The brief facts of the case are that addition made on account of shortfall in revenue recognition of Rs.1,53,60,967/-. Further, the assessee has not deducted TDS for the legal charges claimed as expense in its P&L for Rs.28,06,000/-. Therefore, 30% of the legal charges claimed is disallowed u/s 40(a)(ia) of the Income Tax Act,. The ld.CIT(A) confirmed the addition.

3.

Aggrieved, assessee is in appeal before us.

4.

Before us, the ld. Counsel for assessee submitted that the assessee may be given more chance to adduce evidence and submission. He further contended that the ld.CIT(A) had never issued notice to the assessee as discernible from the order. The ld.DR relied upon the order of the ld.CIT(A) and pleaded for the dismissal of the appeal.

5.

Though we some extent concur with the submissions of Ld.DR, however, keeping in mind the natural justice, we are of the view that the assessee may be granted opportunity to file submissions and evidence.

1. Accordingly, the impugned order is set aside and the appeal is restored back to the appeal file to the Ld. CIT(A) for hearing on merits subject to cost of Rs.1,000/- (Rupees One Thousand) which shall be deposited by the assessee within ‘30’ days from the date of receipt of this order to ‘Tamil Nadu State Legal Services Authority’ at Hon’ble High Court of Madras. The proof of the same will be furnished by the Assessee before the Ld.CIT(A) whose shall proceed for hearing the appeal on merits after affording proper opportunity of hearing to the assessee. The assessee is directed to substantiate its case with all evidence and documents, if any, forthwith without any fail, failing which Ld.CIT(A) shall be at liberty to proceed with the appeal proceedings on merits as per law. Legal issues are open. The ld. AR of the asssessee also assured us that the assessee will prosecute the case diligently before the ld.CIT(A).

6.

In the result, appeal filed by the assessee is allowed for statistical purpose.

Order pronounced in open court on the 26th day of August, 2025, in Chennai.

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