TAMILNADU BASKETBALL ASSOCIATION,CHENNAI vs. ITO, EXEMPTIONS WARD-2,, CHENNAI

The Assessee raised the following grounds of appeal : “1. The order of the NFAC is bad in law, contrary to the facts and circumstances of the case, and liable to be set aside. 2. The order of the NFAC is vitiated by non-application of mind and by failure to discharge the statutory duty of a first appellate authority in independently examining the facts and contentions raised by the appellant. 3. The order of the NFAC is unsustainable in law as it has been passed in violation of the principles of natural justice, without granting the appellant a meaningful and effective opportunity to substantiate its claim with supporting ledgers and vouchers. 4. The NFAC erred in confirming the disallowance of Rs.1,29,44,056/- claimed u/s 57(iii) of the Income Tax Act, 1961, without appreciating that the expenditure was wholly and exclusively incurred for the purpose of earning income from tournament fees. 5. The NFAC erred in law in failing to appreciate that the Appellant's sole activity during the year was conducting basketball tournaments and that the impugned expenditure was intrinsically and directly connected with such income-ear activity. 6. The NFAC erred in sustaining the disallowance u/s 57(iii) merely on the ground of alleged non-furnishing of supporting documents, without rejecting the books of account or recording any finding that the accounts maintained by the appellant were incorrect or unreliable. 7. The NFAC erred in law in confirming a blanket and complete disallowance of expenditure, ignoring the settled legal position that deductions cannot be denied in entirety on procedural grounds when the nature and purpose of expenditure are not in dispute. 8. The NFAC erred in law and on facts in not granting to the Appellant the benefit of all deductions, exemptions, reliefs, allowances and set-offs to which the Appellant is legally entitled under the provisions of the Income Tax Act, 1961.

Subsequently, the assessment was completed by the Assessing Officer vide order dated 05.10.2020 passed u/s.143(3) read with section 143(3A) & 143(3B) of the Income Tax Act, 1961 at a total income o fRs.1,29,96,596/-. While doing so, the Assessing Officer had disallowed claim for allowance the expenditure of Rs.1,29,44,056/- to earn the income of Rs.1,29,88,940/- tournament fees received for the failure of the appellant to substantiate the claim for deduction of expenditure u/s.57 of the Income Tax Act, 1961.

Being aggrieved by the above assessment order, the appellant preferred an appeal before ld.CIT(A), who vide impugned order confirmed the action of the Assessing Officer considering the submission of the appellant.

Being aggrieved by the order of ld.CIT(A), the appellant is in appeal before us in the present appeal. At the outset, there is a delay 125 days in presenting appeal before this Tribunal. The appellant had filed a petition seeking contention of delay on the ground that the delay had occurred as the order passed u/s.250 was uploaded only in ITBA Portal and the appellant was not in the regular habit of accessing ITBA Portal.

The learned Counsel submit that the assessment proceedings were conducted during Covid-19 Pandemic period, therefore, the appellant could not cause the appearance during the course of assessment proceedings. Further, he submits that the ld.CIT(A) without considering the entire submissions made by the appellant had merely confirmed the action of the Assessing Officer by passing cryptic order without discussing the submission of the appellant, therefore he prays for the remand to the file of Assessing Officer for fresh denovo assessment.

On the other hand, learned Sr.DR has no serious objection to remand the matter back to the file of Assessing Officer for fresh denovo assessment in accordance with law. We order accordingly with a direction to the Assessing Officer to make denovo assessment in accordance with law after affording an opportunity of being heard to the appellant.

In the result, appeal filed by the assessee is partly allowed for statistical purpose. Order pronounced in the open Court on 3rd July, 2026.