ECOSSENTIAL CLOTHING PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER, WARD 9(2)(1), MUMBAI

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ITA 3720/MUM/2025Status: DisposedITAT Mumbai19 August 2025AY 2022-23Bench: MS. KAVITHA RAJAGOPAL (Judicial Member), SHRI PRABHASH SHANKAR (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, considering the principles of natural justice and the interest of justice, decided to remand the issues back to the AO. The AO was directed to admit additional evidence proposed by the assessee to substantiate its claim and decide the matter on merits.

What were the facts?

The assessee, a private limited company, filed its return declaring a loss. Its case was selected for scrutiny under CASS due to a high turnover and failure to file a tax audit report. The Assessing Officer (AO) made additions to the total income due to disallowance of expenditure and unsecured loans. The CIT(A) upheld these additions.

What were the issues?

Whether the assessee should be granted an opportunity to present additional evidence to substantiate its claims before the AO, especially when the lower authorities rejected the plea for remand.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 44AB,Section 143(2),Section 142(1),Section 143(3),Section 144B,Section 250,Section 29

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “H(SMC

For Appellant: Shri Chetan, Shri Pravin Salunkhe, SR DR
Hearing: 06.08.2025Pronounced: 19.08.2025

(Assessment Year: 2022-23) Ecossential Clothing Pvt. Ltd. Income Tax Officer, Ward 9(2)(1), A/502, Remi Biz Court, Veera Desai Mumbai Road, Shah Industrial Estate, Andheri Vs. (W), Mumbai – 400058. PAN/GIR No. AAFCE7225F (Appellant) : (Respondent) Assessee by : Shri Chetan Agarwal (Virtually Appeared) : Shri Pravin Salunkhe, SR DR Respondent by Date of Hearing : 06.08.2025 Date of Pronouncement : 19.08.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2022-23.

2.

The assessee has raised the following grounds of appeal: “Ld. CIT(A) erred in law as well as on fact is dismissing appeal, he ought to have set aside assessment order to the file of Ld.AO for denovo assessment considering facts and circumstances of the case”

3. Brief facts of the case are that the assessee is private limited company engaged in business of trading and manufacturing of textile. The assessee had filed its return of (A.Y. 2022-23) Ecossential Clothing Pvt. Ltd. income u/s. 139(1) dated 31.10.2022, declaring total loss at Rs. 98,18,539/-. The assessee’s case was selected for scrutiny under CASS for the reason that “the assessee has reported huge turnover in Part A – trading account exceeding statutory limit for tax audit as per Section 44AB and tax audit report has not been filed”. Notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. As the assessee failed to furnish the complete details/information as required vide statutory notices issued by the ld. AO, inspite of several opportunities, the ld. AO passed the assessment order dated 19.03.2024 u/s. 143(3) r.w.s. 144B of the Act, determining total income at Rs. 12,93,071/- after making additions of Rs. 62,56,930/- towards disallowance of other expenditure debited to profit and loss account and Rs. 48,54,680/- towards closing balance of unsecured loans.

4. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 16.05.2025, upheld the additions made by the ld. AO, for the reason that the assessee has failed to furnish documentary evidences to substantiate its claim before the ld. CIT(A) and had also rejected the assessee’s plea for remanding the issues back to the file of ld. AO for denovo assessment.

5. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).

6.

We have heard the rival submissions and perused the materials available on record. The learned Authorised Representative ('ld. AR' for short) for the assessee filed an application for admission of additional evidence as per Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 stating that the assessee was unable to file the same (A.Y. 2022-23) Ecossential Clothing Pvt. Ltd. before the lower authorities. The ld. AR prayed that the assessee be given one more opportunity to present its case.

7.

The learned Departmental Representative ('ld. DR' for short) for the revenue vehemently opposed to setting aside the issue back to the lower authorities for the reason that the assessee has been given several opportunities before the lower authorities but has failed to file cogent evidences to substantiate its claim and further the assessee has also not stated as to what prevented the assessee from not filing these evidences before the lower authorities inspite of various opportunities provided. The ld. DR relied on the order of the lower authorities.

8.

Upon considering the rival contentions, we are of the considered view that in order to extend one more opportunity to the assessee by adhering to the principles of natural justice and in the interest of justice dispensation, we deem it fit to remand all these issues back to the file of ld. AO with a direction to admit the additional evidence proposed to be filed by the assessee to substantiate its claim. The assessee is also directed to cooperate with the proceedings before the ld. AO without any undue delay from its side and the ld. AO is to decide the issue in hand based on the submission of the assessee, on the merits and in accordance with law.

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