HUBTOWN BUS TERMINAL (MEHSANA) PRIVATE LIMITED,MEHSANA vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, GANDHINAGAR, GANDHINAGAR

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ITA 93/AHD/2026Status: DisposedITAT Ahmedabad03 March 2026AY 2018-2019Bench: Shri T.R. Senthil Kumar (Judicial Member), Shri Narendra Prasad Sinha (Accountant Member)4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The assessee mistakenly informed the CIT(A) that its appeal became infructuous due to a Section 263 order setting aside the *entire* assessment, leading the CIT(A) to dismiss the appeal. The Tribunal clarified that only one disallowance was set aside under Section 263, and the other additions required adjudication. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter back to the CIT(A) to provide the assessee a fresh opportunity to present submissions and evidence for a decision on merits regarding the remaining additions.

What were the facts?

The assessee company filed a nil income return for AY 2018-19, setting off brought forward loss. During scrutiny, the Assessing Officer made three additions: an ad hoc disallowance of other expenses, a disallowance u/s 40(a)(ia), and a disallowance of service provided, thereby determining the total income at Rs.2,06,76,040/-. The assessee appealed against this order before the CIT(A).

What were the issues?

Whether the CIT(A) was justified in dismissing the appeal based on the assessee's mistaken belief regarding the scope of the Section 263 order, and whether the remaining additions should be adjudicated on merits after providing a proper hearing opportunity.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 40(a)(ia),Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: Shri T.R. Senthil Kumar & Shri Narendra Prasad Sinha

Hubtown Bus Terminal Assistant (Mehsana) Pvt. Ltd. Commissioner of GSRTC Quarters Vs Income Tax, Class-II, Block No. 2, Circle, Gandhinagar, Ground Floor Behind Gandhinagar Vibhagiya Kacheri, Modhera Crossing, Mehsana-384002 Gujarat PAN: AAGCA9937R (Respondent) (Appellant) Assessee Represented: Shri Manish J Shah & Shri Rushin Patel, A.Rs. Revenue Represented: Shri Prateek Sharma, Sr. D.R. Date of hearing : 02-03-2026 Date of pronouncement : 03-03-2026 आदेश/ORDER PER: T.R. SENTHIL KUMAR, JUDICIAL MEMBER

This appeal is filed by the Assessee as against the appellate order dated 28-11-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the assessment order passed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2018-19.

2.

Brief facts of the case is that the assessee is a company filed its Return of Income for the Asst. Year 2018-19 on 28-09-2018 declaring Nil income after setting off brought forward loss of Rs.14,32,133/-. The return was taken for scrutiny assessment and the assessing officer made three additions: (a) Other expenses of Rs.1,60,48,894/- was not explained with the documentary proof thereby 30% adhoc disallowance of Rs.48,14,668/- made by the A.O. (b) Disallowance u/s. 40(a)(ia) of Rs. 25,17,690 (c) Disallowance of service provided by the assessee of Rs.1,19,11,549/-. Thereby assessing officer determined the total income at Rs.2,06,76,040/- and demanded tax thereon.

3.

Aggrieved against the assessment order, assessee filed an appeal before Ld. CIT(A). Pending appellate proceedings, the assessment order revised u/s. 263 by Ld. PCIT thereby set-aside the assessment order passed by the assessing officer. The assessee by mistakenly informed the Ld. CIT(A) that the pending appeal become infructuous, since the entire assessment was set-aside by Ld. PCIT. Therefore the assessee requested to dispose of the appeal pending before Ld. CIT(A). Considering the submissions of the assessee, Ld. CIT(A) dismissed the appeal filed by the assessee.

4.

Ld. Counsel appearing for the assessee fairly submitted that it is by mistake, the assessee thought that the entire assessment order is set- aside by Ld. PCIT invoking Revisions power u/s. 263 of the Act. Whereas the first disallowance of the expenses alone set-aside by PCIT which order was also given effect by the assessing officer by order dated 25-02-2025 and that order is also a subject matter of appeal pending before Ld. CIT(A). However the other additions made in the original assessment order which required to be adjudicated by CIT(A). Therefore the matter may be set-aside back to the file of ld. CIT(A) to decide the same on merits by giving proper opportunity of hearing to the assessee.

5.

Ld. Sr. D.R. appearing for the Revenue has no serious objection in setting-aside the matter back to the file of Ld. CIT(A), since the assessee failed to provide relevant materials/documents before Ld. CIT(A).

6.

Considering the submissions of rival parties and in the interest of Principle of Natural Justice, we deem it fit to set-aside the appellate order passed by Ld. CIT(A) with a direction to Ld. CIT(A) to provide one more opportunity of hearing to the assessee to place on record its submissions and evidences, so as the Ld. CIT(A) can pass order on merits of the case.

7.

In the result, the appeal filed by the Assessee is treated as allowed for statistical purpose.

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