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Facts
The assessee preferred an appeal against an order dated 11.09.2023 passed by the Ld. CIT(A) for assessment year 2014-15. The original assessment in the case of the assessee was passed ex-parte under section 144 of the Income-tax Act, 1961.
Held
The Tribunal found that the Ld. CIT(A) was required to decide the appeal on the grounds raised by the assessee by way of a reasoned order. Since the Ld. CIT(A) did not decide the grounds on merit, the order was set aside and restored back to the Ld. CIT(A) for fresh decision.
Key Issues
Whether the Ld. CIT(A) erred in not considering the merits of the case and whether the appeal may be set-aside to the Assessing Officer. Whether the Ld. CIT(A) has the power to restore the matter back to the AO.
Sections Cited
144, 68, 46A
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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN
This appeal has been preferred by the assessee against order dated 11.09.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2014-15, raising following grounds:
1. Failure of Natural Justice The Id CIT(A) erred in not considering the merits as it was fit case for The Id CIT(A) erred in not considering the merits as it was fit case for The Id CIT(A) erred in not considering the merits as it was fit case for Remand Report; Remand Report; therefore, on the failure of equity and justice, the therefore, on the failure of equity and justice, the appeal may be set appeal may be set-aside to the Assessing Officer.
2. MERITS Ad-hoc (@20%) disallowance of direct and indirect hoc (@20%) disallowance of direct and indirect expenses expenses Rs. 1,89,86,4371- The Id. CIT(A) erred in confirming the summary disallowance of var The Id. CIT(A) erred in confirming the summary disallowance of var The Id. CIT(A) erred in confirming the summary disallowance of various direct and indirect expenses without appreciating that the Appellant direct and indirect expenses without appreciating that the Appellant direct and indirect expenses without appreciating that the Appellant maintains proper books which are audited and tax audited; therefore, maintains proper books which are audited and tax audited; therefore, maintains proper books which are audited and tax audited; therefore, no ad-hoc disallowance is called for when books maintained had been hoc disallowance is called for when books maintained had been hoc disallowance is called for when books maintained had been accepted u/s. 145 and the same may accepted u/s. 145 and the same may be deleted.
3. Addition disallowance of unexplained 3. Addition disallowance of unexplained Rs.2,00,000/- cash credits cash credits- The Id. CIT(A) erred in confirming the addition u/s. 68 which was The Id. CIT(A) erred in confirming the addition u/s. 68 which was The Id. CIT(A) erred in confirming the addition u/s. 68 which was added ex-parte without appreciating parte without appreciating that after accepting the additional after accepting the additional evidence no Remand evidence no Remand Report was called from the Assessing Officer; sessing Officer; therefore, confirming the deemed addition is uncalled for and the same therefore, confirming the deemed addition is uncalled for and the same therefore, confirming the deemed addition is uncalled for and the same may be deleted. may be deleted.
4. Interest on unsecured loans Rs.19,016/ Interest on unsecured loans Rs.19,016/- The Id CIT(A) erred in confirming the interest on loan by failing to The Id CIT(A) erred in confirming the interest on loan by failing to The Id CIT(A) erred in confirming the interest on loan by failing to appropriate the genuinity of payment; th appropriate the genuinity of payment; therefore, the same may be erefore, the same may be deleted.
5. Disallowance of Depreciation Disallowance of Depreciation- Rs.1,77,517/- The Id. CIT(A) erred in confirming the disallowance which was a non The Id. CIT(A) erred in confirming the disallowance which was a non The Id. CIT(A) erred in confirming the disallowance which was a non- cash charge on the fixed asset addition; therefore, confirming the cash charge on the fixed asset addition; therefore, confirming the cash charge on the fixed asset addition; therefore, confirming the disallowance is previse and the same may disallowance is previse and the same may be deleted.
6. Levy of penal interest Levy of penal interest The Appellant, on merits, denies its liability to penal interest. The Appellant, on merits, denies its liability to penal interest. The Appellant, on merits, denies its liability to penal interest.
Briefly stated, facts of the case are that assessment in the case Briefly stated, facts of the case are that assessment in the case Briefly stated, facts of the case are that assessment in the case of the assessee has been passed u/s 144 of the Income-tax Act, of the assessee has been passed u/s 144 of the Income of the assessee has been passed u/s 144 of the Income 1961 (in short ‘the Act’) i.e. ex Act’) i.e. ex-parte manner.
On further appeal before the Ld. CIT(A), the assessee On further appeal before the Ld. CIT(A), the assessee On further appeal before the Ld. CIT(A), the assessee submitted that matter may be remitted back for considering the submitted that matter may be remitted back for considering the submitted that matter may be remitted back for considering the submission of the assessee. However, the Ld. CIT(A) has rejected submission of the assessee. However, the Ld. CIT(A) has rejected submission of the assessee. However, the Ld. CIT(A) has rejected this request of the assessee on the groun this request of the assessee on the ground that Ld. CIT(A) does not d that Ld. CIT(A) does not have any power of restoring the matter back to the AO. The finding have any power of restoring the matter back to the AO. The finding have any power of restoring the matter back to the AO. The finding of the Ld. CIT(A) is reproduced as under: of the Ld. CIT(A) is reproduced as under:
Decision: I have considered the submission of the appellant and Decision: I have considered the submission of the appellant and Decision: I have considered the submission of the appellant and gone through the AO's observation & decision and find t gone through the AO's observation & decision and find t gone through the AO's observation & decision and find that appellant has been provided ample opportunity to make necessary appellant has been provided ample opportunity to make necessary appellant has been provided ample opportunity to make necessary compliance before the assessing officer but despite sending one compliance before the assessing officer but despite sending one compliance before the assessing officer but despite sending one adjournment letter to the AO never complied afterwards. The adjournment letter to the AO never complied afterwards. The adjournment letter to the AO never complied afterwards. The problem put up at appeal stage is purely unproved and personal problem put up at appeal stage is purely unproved and personal problem put up at appeal stage is purely unproved and personal one and the ground taken thereof accordingly is treated as un ne and the ground taken thereof accordingly is treated as un ne and the ground taken thereof accordingly is treated as un- entertainable. Moreover either remand back the case to the file of entertainable. Moreover either remand back the case to the file of entertainable. Moreover either remand back the case to the file of AO or to allow further opportunity of hearing after AO or to allow further opportunity of hearing after completion of completion of assessment is beyon assessment is beyond the purview of the CIT Appeal.
We find that the Ld. CIT(A) under the provisions of the Act is d that the Ld. CIT(A) under the provisions of the Act is d that the Ld. CIT(A) under the provisions of the Act is required to decide the appeal on the ground raised by the assessee required to decide the appeal on the ground raised by the assessee required to decide the appeal on the ground raised by the assessee by way of reasoned order. Since the Ld. CIT(A) has not decided by way of reasoned order. Since the Ld. CIT(A) has not decided by way of reasoned order. Since the Ld. CIT(A) has not decided ground raised by the assessee on merit, t ground raised by the assessee on merit, therefore, the order of the herefore, the order of the Ld. CIT(A) on the issue in dispute is set aside and restored back to d. CIT(A) on the issue in dispute is set aside and restored back to d. CIT(A) on the issue in dispute is set aside and restored back to him for deciding afresh with liberty to the assessee for filing him for deciding afresh with liberty to the assessee for filing him for deciding afresh with liberty to the assessee for filing additional evidence in terms of Rule 46A of the Income-tax Rules, additional evidence in terms of Rule 46A of the Income additional evidence in terms of Rule 46A of the Income 1962. With above remark the ground No. 1 raised by the as ith above remark the ground No. 1 raised by the as ith above remark the ground No. 1 raised by the assessee is allowed for statistical purposes. Other grounds being on merit allowed for statistical purposes. Other grounds being on merit allowed for statistical purposes. Other grounds being on merit and therefore, not required to adjudicate at this stage. and therefore, not required to adjudicate at this stage. and therefore, not required to adjudicate at this stage.
In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on Order pronounced in the open Court on 27/09/2024. /09/2024.