E MS ELECTICALS & ENGINERRS P LTD,MUMBAI vs. CIECLE9(2)(2), AAYKAR BHAVAN
IN THE INCOME-TAX APPELLATE TRIBUNAL “E” BENCH,
MUMBAI
BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT
&
SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER
EMS
Electricals
&
Engineering P Limited,
1, Archana Smruti, Opp. Holy
Family
Hospital,
Mahakali
Caves
Road,
Andheri
(E),
Mumbai
–
400
093,
Maharashtra v/s.
बनाम
Income Tax Officer, Circle –
9(2)(2), Aaykar Bhavan, M.K.
Road, Churchgate, Mumbai –
400020, Maharashtra
स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACE6785H
Appellant/अपीलार्थी
..
Respondent/प्रतिवादी
Appellant by :
Ms. Dinkle Hariya,AR
Respondent by :
Shri Hemanshu Joshi (Sr. DR)
Date of Hearing
17.07.2025
Date of Pronouncement
24.07.2025
आदेश / O R D E R
PER PRABHASH SHANKAR [A.M.] :-
The present appeal is filed by the assessee against the appellate order passed by the Learned
Commissioner of Income-tax
(Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 147 r.w.s 144
of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated
26.03.2022 for the Assessment Year [A.Y.] 2015-16. P a g e | 2
A.Y. 2015-16
EMS Electricals & Engineering P Limited
The grounds of appeal are as under: 1. Ld. CIT(A) erred in confirming income assessed by AO. 2. Ld. CIT(A) erred in confirming total expenses of Rs. 16,85,764 as deduction from income. 3. Ld. CIT(A) erred in confirming total amount of Rs. 86,65,466 received as income without allowing deduction of interest paid on loan borrowed against Keyman policy. 3. Brief facts of the case are that in this case, regular return of income for the relevant year was not filed by the assessee. It was seen by the AO from Non-Filing Monitoring System (NMS) of Income tax Department that the assessee had taken out ‘Key Man Insurance Policy’ which was matured and sum of Rs. 86,65,466/- was due. It had obtained loan against the said policy. It had not paid interest on the said loan taken. Assessee’s plea that it had received only a sum of Rs. 4,65,150/- after deducting the interest was not considered to be as per the principle of accounting of income. Regarding amount of Rs. 8,966/- received u/s 194C, the assessee did not offer any explanation during the assessment proceedings. After due consideration of all the facts available on record, the AO added the received amounts as unexplained income of the assessee. 4. In the subsequent appeal before the ld.CIT(A), no written submissions were furnished by the assessee. He observed that there was P a g e | 3 A.Y. 2015-16
EMS Electricals & Engineering P Limited no proper compliance and specific findings in the assessment order had not been controverted by the assessee along with corroborative evidences. The arguments advanced by the assessee in the Statement of Facts and grounds of appeal were also not supported by tangible materials. Accordingly, the appeal was decided keeping in view the facts brought on record by the AO in the assessment order and by the assessee in the grounds of appeal, statement of facts. Accordingly, action of the AO in making the best judgement assessment was found correct and upheld.
5. From the above discussion, it is evident that both the assessment and appellate orders have been passed in ex parte manner mainly on account of lack of proper compliance by the assessee during these proceedings. Moreover, the ld.CIT(A) has not decided the appeal on merits which is contrary to the mandate of section 250(6) of the Act.
The same is reproduced here under for your ready reference:
"(6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision."
5.1 A bare perusal of above provision makes it clear that the CIT(A) is bound to dispose of the appeal before him on merits. Once an appeal is preferred before him, then in disposing of the appeal, he is P a g e | 4
A.Y. 2015-16
EMS Electricals & Engineering P Limited obliged to make such further inquiry that he thinks fit or direct the AO to make further inquiry and report the result of the same to him as per section 250(4) of the Act. Section 251(l)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty.
Besides Explanation to sub-section (2) of Section 251 of the Act also makes it dear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). The appellate order is therefore, deficient in this regard.
6. During the course of hearing, the ld. AR for the assessee prayed that the ld. CIT(A) and the AO both have passed the ex-parte order and the assessee was not provided adequate opportunity of being heard. It may be provided one more opportunity to advance its arguments/submissions before the ld. AO so as to provide details in connection with the merits of his case and additional evidences etc. to support its contentions. The ld.AR did not object to this proposition.
7. We have heard both the parties and perused the materials available on record. In the light of above observations, in the substantial
P a g e | 5
A.Y. 2015-16
EMS Electricals & Engineering P Limited interest of justice, we set aside the appellate order and restore the entire matter back to the AO for passing the assessment order de novo. In case of any failure on the part of the assessee, the AO would at liberty to pass order after considering the material placed on record. The assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the AO.
8. Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by him independently and in accordance with law.
9. In the result, the appeal is allowed for statistical purposes.
Order pronounced in the open court on 24.07.2025. SAKTIJIT DEY
PRABHASH SHANKAR
(उपाध्यक्ष/ VICE PRESIDENT)
(लेखाकार सदस्य/ACCOUNTANT MEMBER)
Place: म ुंबई/Mumbai
ददनाुंक /Date 24.07.2025
Lubhna Shaikh / Steno
P a g e | 6
A.Y. 2015-16
EMS Electricals & Engineering P Limited
आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to :
1. अपीलार्थी / The Appellant
2. प्रत्यर्थी / The Respondent.
3. आयकर आयुक्त / CIT
4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT,
Mumbai
5. गार्ड फाईल / Guard file.
सत्यावपि प्रवि ////
आदेशानुसार/ BY ORDER,
उि/सहायक िंजीकार (Dy./Asstt.