SHRI ARVIN DAMODARLAL BIYANI,MUMBAI vs. DCIT 11(2) (1), MUMBAI

The assessee has raised an additional ground contending that learned CIT(A) was not justified in dismissing the appeal without adjudicating the issues on merit by observing that the same is beyond his power.

The Learned AR submitted that the assessee had preferred an appeal before Ld CIT(A) against the order passed by the AO to give effect to the earlier passed by the first appellate authority against the original assessment order. However, the Ld CIT(A) dismissed the impugned appeal by taking a view that the same would amount to review of his earlier order.

The Ld A.R submitted that the assessee is a director in M/s. Damodar Yarn Manufacturing Pvt. Limited. During the year under consideration, he declared income from salary and income from other sources. The assessee had 2 Arvind Damodarlal Biyani claimed interest expenditure of Rs. 51,32,155/- against interest income of Rs. 27,33,699/-. The Assessing Officer in the original assessment order dated 11.1.2013 disallowed interest expenditure claimed by the assessee. The assessee challenged the above said disallowance by filing the appeal before learned CIT(A), who vide his order dated 20.3.2014 directed the Assessing Officer to examine nexus between the interest expenditure and interest income and decide the issue accordingly. In order to give effect to the order passed by learned CIT(A), the Assessing Officer passed the order on 23.3.2016, wherein he confirmed the disallowance earlier made by him.

Aggrieved by the said order passed by the Assessing Officer, assessee filed the appeal before learned CIT(A) who dismiss the appeal of the assessee by observing as under :-

The Learned AR submitted that learned CIT(A) was not right in law in observing that the present appeal would amount to review of the order passed by him earlier. The Learned AR submitted that learned CIT(A) had passed order earlier against assessment order dated 11.1.2013. However, the present appeal has been filed before learned CIT(A) against the order dated 23.3.2016 passed by the Assessing Officer in order to give effect to the earlier order of learned CIT(A). Accordingly, learned AR submitted that both are separate orders and hence the assessee could very well challenge the order passed by the AO to give effect to the earlier order of Ld CIT(A). Hence learned CIT(A) was not justified in dismissing the appeal of the assessee on erroneous

I have heard learned DR and perused the record. I find merit in the submissions made by learned AR. The impugned appeal has been filed by the assessee before learned CIT(A) against the order dated 23.3.2016 passed by the Assessing Officer in order to give effect to the appellate order passed by learned CIT(A) earlier. Hence, order dated 23.3.2016 passed by the Assessing Officer is separate order against which right of the appeal would lie with the assessee, if he is not agreeing with the order so passed by the Assessing Officer. As rightly submitted by Ld A.R, I agree that adjudication of the said appeal would not result in the review of the earlier order as opined by learned CIT(A). Accordingly, I set aside the order passed by learned CIT(A). Since the first appellate authority has not adjudicated the appeal on merit, I restore all the issues to his file with the direction to adjudicate all the issues on merit.

In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 17.08.2022.