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Facts
The assessee's original assessment for AY 2013-14 was revised by the PCIT under Section 263, leading to a re-assessment by the AO. During re-assessment, the AO disallowed cash expenditure of Rs. 53,51,404 and added an unexplained cash deposit of Rs. 11,93,464. The CIT(A) subsequently confirmed the AO's order.
Held
The Tribunal found the CIT(A)'s order erroneous and contrary to principles of natural justice, as the CIT(A) merely extracted submissions and rejected contentions without proper discussion of the grounds of appeal or documentary evidence. Consequently, the CIT(A)'s order was set aside, and the matter was remanded back for de novo disposal with a reasonable opportunity for the assessee to be heard.
Key Issues
Whether the CIT(A)'s order, which failed to adequately discuss the grounds of appeal, statement of facts, and submissions, violated the principles of natural justice, warranting a remand for fresh disposal.
Sections Cited
143(3), 263
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, COCHIN
Before: Shri Inturi Rama Rao
Asst.Year 2013-2014 Bhasuram Resorts Pvt. Ltd. The Assistant Commissioner Bhasuram Shopping Complex v. of Income-tax, Cir.1(1) Poovar, Neyyattinkara Trivandrum. Trivandrum – 695 525. PAN : AACCB9955E. (Appellant) (Respondent) Appellant by : --- None --- Respondent by : Smt.Leena Lal, Senior AR Date of Date of Hearing : 13.03.2025 Pronouncement : 28.03.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Assessment Centre / Commissioner of Income- tax (Appeals) [“CIT(A)” for short] dated 20.10.2024 for the assessment years 2013-2014.
The appellant is a private company incorporated under the provisions of Companies Act, 1956. It is engaged in the business of running a resort. The return of income for the assessment year 2013- 2014 was filed on 15.10.2013 disclosing total loss of Rs.24,89,867. Against the said return of income, the assessment was completed by the Assessing Officer (“the AO” hereinafter) vide order dated 31.12.2018 passed u/s.143(3) of the Income-tax Act, 1961 (“the Act” hereinafter) accepting the returned loss. Subsequently, the PCIT, Trivandrum in . Bhasuram Resorts Private Limited. exercise of power vested u/s.263 of the Act, had set aside the assessment and directed to redo the same as per the directions given in para 3 of the assessment order. Consequent to the revisionary order passed u/s.263 of the Act, the AO completed the assessment vide order dated 31.12.2018 passed u/s.143(3) r.w.s. 263 of the Act at a total income of Rs.40,55,001. While doing so, the AO disallowed the expenditure of Rs.53,51,404 being the expenditure incurred in cash by the Managing Director of the assessee company, Sri.Sureshbabu B for the alleged failure of the appellant-company to establish that these expenditures were incurred wholly and exclusively for the purpose of business. The AO also made an addition of Rs.11,93,464 as unexplained money of the assessee for failure of the assessee to explain the source of cash deposit of Rs.11,93,464.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order, confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before the Tribunal in the present appeal. When the matter was called upon, none appeared on behalf of the assessee despite due service of notice. Therefore, I proceed to dispose of this appeal on merits after hearing the learned Senior DR.
On a careful perusal of the order passed by the CIT(A), it is noted that the CIT(A) while dealing with grounds of appeal, simply extracted the submissions made by the appellant and rejected the contentions raised by the appellant by merely holding that the appellant had failed to produce any documentary evidences in support of the contention. Further, the CIT(A) had also failed to discuss the grounds of appeal and . Bhasuram Resorts Private Limited. the statement of facts in its entirety. Thus, the order passed by the CIT(A) is erroneous and contrary to the principles of natural justice. Therefore, the order of the CIT(A) is hereby set aside the matter and remand the matter back to the file of the CIT(A) for de novo disposal of the appeal in accordance with law after affording a reasonable opportunity of being heard to the assessee.
In the result, the appeal filed by the assessee stands allowed for statistical purposes.
Order pronounced on this 28th day of March, 2025.