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Facts
The revenue appealed against the CIT(A)'s order dated 22/11/2024, which set aside an assessment order (passed under section 147 r.w.s. 144 for A.Y. 2019-20) for fresh assessment. The CIT(A) had found that the Assessing Officer failed to provide adequate opportunity to the assessee, a contention the revenue disputes, claiming proper enquiries were conducted. The substantive issue involves an addition of ₹. 1,05,15,642/- related to interest on a loan of ₹. 9,70,94,431/-.
Held
The Income Tax Appellate Tribunal dismissed the revenue's appeal. This implies that the Tribunal found no error in the CIT(A)'s decision to set aside the assessment order for fresh assessment, thereby upholding the assessee's right to adequate opportunity during assessment proceedings.
Key Issues
1. Whether the CIT(A) erred in setting aside the assessment order for fresh assessment on grounds of lack of opportunity to the assessee. 2. The sustainability of an addition of interest on a loan where the loan itself was not treated as an accommodation entry.
Sections Cited
Section 147, Section 144, Income Tax Act, 1961
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Income Tax Appellate Tribunal, “DB” BENCH, NAGPUR
Before: SHRI PAWAN SINGH, JM & SHRI KHETTRA MOHAN ROY, AM
The present appeal by the revenue is directed against the order dated 22/11/2024, passed by the learned Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre, Delhi, [for short, “ld.
CIT(A)”] under section 147 r.w.s. 144 of the Income Tax Act, 1961 (the Act) for the Assessment Year (A.Y.) 2019–20. The Revenue has raised the following grounds of appeal:
“1. On the fact and circumstances of the case and in law, the Ld. CIT(A) has erred in setting aside the assessment order back to the file of Assessing Officer without appreciating the fact that the captioned assessment order was passed by the Assessing Officer only after conducting through enquiries and verification as required by law.
2. On the fact and circumstances of the case and in law, the Ld. CIT(A) has erred in opining that the Assessing Officer has not given any opportunity to the assessee to represent its case and therefore it is a fit case for setting aside order passed by the AO for fresh assessment.”
The tax effect in this case is only `. 34,58,762/–.
The ld. CIT–DR has submitted that instant case falls under exception clause (h) as stipulated under para–3.1 of CBDT Circular no. 5 of 2024 dated 15.03.2024.
The ld. AR vehemently opposed and submitted that appeal may be dismissed at the very onset.
The addition of `. 1,05,15,642/– pertains to interest paid to M/s Aneri Fincap Limited on a loan of `. 9,70,94,431/–. No addition has been made on account of such loan holding it to be on accommodation entry. The independent addition of interest is unsustainable.
In the result, the appeal of revenue is dismissed.
Order pronounced in the open Court on 26/02/2026