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Facts
The assessee filed appeals against the CIT(A)'s orders for AY 2018-19 and 2020-21, concerning disallowances under Section 14A and issues related to PF & ESI. The assessee, engaged in tea manufacturing, contended that PF & ESI disallowance should be restricted to 30% as per Rule 8, but the CIT(A) failed to consider these submissions and confirmed the additions.
Held
The Tribunal found that the CIT(A)'s orders for both assessment years were non-speaking and did not address the assessee's submissions, making it impossible for the Tribunal to ascertain the basis of the decision. Consequently, the Tribunal set aside the CIT(A)'s orders and remanded the issues back for readjudication, granting the assessee an adequate opportunity to be heard and raise additional grounds.
Key Issues
1. Whether the disallowance under Section 14A was justified. 2. Whether the disallowance related to PF & ESI should be restricted to 30% for a tea manufacturing business as per Rule 8. 3. The validity of the CIT(A)'s non-speaking order.
Sections Cited
14A
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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI SANJAY AWASTHI
O R D E R Per George Mathan, JM : These are two appeals filed by the assessee against the separate orders both dated 27.03.2025 of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, passed for the assessment years 2018-2019 & 2020-2021, respectively.
It was submitted by the ld. AR that one of the issues was in respect of the disallowance u/s.14A as also there were issues of PF & ESI. It was the submission that the assessee is in the business of manufacturing of tea and consequently in view of the Rule 8 in the computation of income in respect of manufacturing of tea, the disallowance in respect of PF &ESI is to be restricted to 30%. It was the submission that the ld. CIT(A) has not considered the submission of the assessee. It was the submission that the addition as made by the Assessing Officer and as confirmed by the ld. CIT(A) is liable to be deleted.
3. In reply, ld. Sr.DR vehemently supported the orders of the Assessing Officer and the ld.CIT(A).
A perusal of the order of the ld. CIT(A) shows that the ld. CIT(A) for the assessment year 2018-2019 has given his decision in para 6 of his order. Similarly, for assessment year 2020-2021 also the ld. CIT(A) has given his decision in para 6 of his order. It is noticed that in respect of the issue of PF & ESI, the ld. CIT(A) has applied the decision of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd., passed in Civil Appeal No.2833 of 2016, dated 12.10.2022/[2022] 143 taxmann.com 178 (SC)]. In regard to disallowance made u/s.14A of the Act in the assessment year 2018-2019, the ld. CIT(A) has not considered the submission of the assessee. A perusal of the order of the ld. CIT(A) shows that the orders of the ld. CIT(A) are totally non-speaking and has not considered any of the submission of the assessee though the written submission of the assessee has been extracted at length. It must be appreciated that the Tribunal decides the appeal which is against the order of the ld. CIT(A). In absence of a speaking order from the ld.CIT(A), it becomes difficult nay practically impossible for the Tribunal to understand as to what is the view and the reasons on which the ld.CIT(A) has taken the decision in the manner in which he has done. As the orders of the ld.CIT(A) for both the assessment years under consideration are non-speaking order, in the interest of justice, the orders of the ld.CIT(A) are set aside and the issues in both the appeals are restored to the file of the ld.CIT(A) for readjudication. It must also be mentioned here that the assessee has raised the additional ground in both