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Facts
The assessee filed its return of income for AY 2017-18, which was picked up for scrutiny. The Assessing Officer made additions of Rs. 86,54,878/- on account of estimated profit and Rs. 5,00,000/- on account of unsecured loan, totaling Rs. 91,54,878/-. The assessee appealed these additions.
Held
The Tribunal noted that the First Appellate Authority dismissed the appeal without addressing the specific issues raised by the assessee, indicating a non-application of mind. The Tribunal set aside the order and restored the issues for de novo adjudication.
Key Issues
Whether the First Appellate Authority erred by failing to adjudicate the grounds of appeal and instead deciding unrelated issues, thereby violating principles of natural justice.
Sections Cited
43CA
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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY, VP & SHRI NARENDRA KUMAR BILLAIYA, AM
O R D E R Per Saktijit Dey, VP: This is an appeal by the assessee against order dated 25.09.2023 passed by National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year (AY) 2017-18. 2. There is delay of 564 days in filing the appeal. Having perused the application seeking condonation of delay and the accompanying affidavit, we are satisfied that delay in filing the appeal was due to reasonable cause. Hence, we condone the delay and admit the appeal for adjudication.
When the matter was called up, none appeared for the assessee despite notice, However, considering the nature of dispute, we proceed to dispose of the appeal ex- parte qua the assessee after considering the submissions of learned Departmental Representative (DR) and based on materials on record. The effective grounds raised by the assessee are as under:-
“1. On the facts and the circumstances of the case and in Law, the Hon'ble CIT (A) has erred in introducing new additions of Rs. 38,99,700/- u/. 43CA of the Income Tax Act 1961 that were never made by the Ld. AO and not a part of the assessment proceedings. 2. On the facts and the circumstances of the case and in Law, the Hon'ble CIT (A) has erred in adjudicating on issues that were completely different from the grounds of appeal raised by the assessee
3. On the facts and the circumstances of the case and in law, the Hon'ble CIT(A) has erred in violating the principles of natural justice by failing to adjudicate upon the addition of Rs. 91,54,878/- made by the Assessing Officer, which was specifically challenged by the assessee in the appeal.”
4. Briefly stated, the assessee is a partnership firm. For the assessment year under dispute, assessee filed its return of income on 01.11.2017 declaring total income of Rs.26,356/-. The return of income filed by the assessee was picked up for scrutiny and while completing the assessment, the Assessing Officer (AO) made couple of addition as under: (i) on account of estimation of profit Rs.86,54,878/-. (ii) on account of unsecured loan Rs.5,00,000/-.
In aggregate the AO made addition of Rs.91,54,878/-.
Assessee contested the aforesaid additions by filing an appeal before the First Appellate Authority. Vide the impugned order, the First Appellate Authority has dismissed the appeal.
Having considered the submissions of learned Departmental Representative (DR) and perused the materials on record, we find, while deciding the appeal, learned First Appellate Authority instead of deciding the issues arising in the present appeal has decided some other issue which is totally unconnected and not the subject matter of the appeal. Thus, the order passed by the learned First Appellate Authority reveals complete non-application of mind.
In view of aforesaid, we are inclined to set aside the impugned order of learned First Appellate Authority and restore the issues arising in the appeal to him for de novo adjudication through a speaking order after providing reasonable opportunity of being heard to the assessee.
In the result, appeal is allowed for statistical purposes.
Order pronounced in the open court on 07/08/2025.