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Facts
The assessee, engaged in manufacturing and trading, filed a return showing a net loss. The Assessing Officer made additions under Section 68 and other expenses based on unexplained credits and expenses, which were confirmed by the CIT(A).
Held
The Tribunal held that the CIT(A)'s order was not reasoned and did not effectively deal with the documents placed before it, giving a blanket approval to the Assessing Officer's additions. The Tribunal noted that similar issues in previous years were set aside by the ITAT.
Key Issues
Whether the CIT(A) passed a reasoned order by properly considering the evidence, and if not, whether the matter should be set aside for fresh adjudication.
Sections Cited
143(3), 144B, 68, 115BBE, 133(6)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, DELHI
Before: MS. MADHUMITA ROY & SHRI NAVEEN CHANDRA
The instant appeal filed by the assessee is directed against the order dated 4.09.2024 passed by the National Faceless Appeal Centre (NFAC) Delhi arising out of the order dated 30.09.2021 by the National Faceless Assessment Centre (NFAC), Delhi under Section 143(3) r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year 2018-19.
We have heard the rival submissions made by the respective parties, we have also perused the relevant materials available on record. The assessee is in the business of manufacturing and trading of different products and also having other business including restaurant services filed its return of income on 27.09.2018 showing total income at RS.nil claiming loss for the year under consideration of Rs.(-)31,14,758/-. On scrutiny notice under Section 143(2) of the Act dated 27.09.2018 followed by questionnaire under Section 142(1) dated 09.01.2020 was issued and served upon the assessee through electronic media. The assessee duly submitted the list of sundry creditors, advances received and purchase along with ledger accounts whereupon copy of returns, financial of the companies and bank account were called for. Notices under Section 133(6) were issued to 10 sundry creditors out of 91 sundry creditors on test check basis out of which 4 submitted their reply and then subsequently another two furnished their details. The Ld. Assessing Officer was not satisfied with the genuineness of the creditors and 40% of the entire amount of Rs.5,31,63,684/- was added in the hands of the assessee under Section 68 r.w.s 115BBE of the Act. Additions were also made to the tune of Rs.1,50,48,288/- on account of unexplained credits under Section 68, 50% of the total expense were also added in the hands of the assessee along with other expenses on account of payroll expenditure and miscellaneous expenses which were in turn confirmed by the First Appellate Authority. Hence, the instant appeal before us.
At the time of hearing of the matter the Ld. Senior Counsel, Mr. Ved Jain appearing for the assessee submitted before us that though the entire set of documents were duly placed before the First Appellate Authority as required in order to support the claim of the assessee, the Ld. CIT(A) has passed order without considering the said details in respect of the additions made on 9 issues. Such order is not a reasoned one as per the submissions made by the Ld. Senior counsel appearing for the assessee. Under this facts and circumstances of the matter, he, thus prays for setting aside the issues to the file of Ld. Assessing Officer to adjudicate the same afresh on merit upon examining the documents already placed before the First Appellate Authority. It was further submitted by him that in the earlier years identical issues arising out of the rejection orders of the Ld. CIT(A) were challenged before the ITAT which were in turn set aside to the file of the Ld. Assessing Officer for re- adjudication of the same.
It appears from the orders passed by the Ld. CIT(A) that none of the issues have been dealt with effectively on the basis of the documents placed before it, rather he has given a blanket approval on the order of addition made by the Ld. Assessing Officer on very many counts in the hands of the assessee. We further note, that the Ld. DR though relied upon the order passed by the authorities below neither been able to controvert our such observations made hereinabove as to no proper deliberation has been made by the Ld. CIT(A) nor been able to controvert the specific submissions made by the Ld. Senior counsel in regard to the identical issues having been set aside to the file of the Ld. Assessing Officer under the identical facts and circumstances of the matter by the ITAT. Thus, having regard to the entire aspect of the matter, particularly keeping in view of this fact of order impugned is found to be a cryptic one, the same cannot demand a further approval from us. Thus, we quash the order passed by the Ld. CIT(A) and set aside the issues to the file of the Ld. Assessing Officer for fresh adjudication of the same and to pass a reasoned order upon granting an opportunity of being heard to the assessee and upon considering the evidences on record or any other evidence which the assessee may choose to file at the time of hearing of the matter in support of the case made out.
Assessee’s appeal is thus, allowed for statistical purposes.
Order pronounced in the open court on 08.08.2025