Facts of the Case

The assessee company filed its return of income for Assessment Year 2014-15 declaring total income of ₹37,67,560. The return was processed and assessment was completed under section 143(3) of the Income-tax Act on 19.12.2016, determining total income at ₹50,75,580 after making various disallowances.

Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who partly allowed the appeal vide order dated 21.05.2019. Against the said appellate order, the assessee filed an appeal before the Income Tax Appellate Tribunal.

Issues Involved

  1. Disallowance of security charges amounting to ₹1,51,568.
  2. Addition of ₹3,93,259 under section 43B of the Income-tax Act in respect of VAT liability.

Petitioner’s Arguments

The assessee submitted that it did not receive reasonable opportunity to place relevant details and supporting documents before the CIT(A). It was contended that the issues were decided without proper appreciation of facts, and therefore, the matters should be restored for fresh adjudication after granting adequate opportunity of being heard.

Respondent’s Arguments

The Departmental Representative supported the order of the CIT(A) and relied upon the findings recorded therein, opposing the request for remand.

Court Order / Findings

The Tribunal considered the submissions and material on record and observed that the assessee sought restoration of the issues due to lack of reasonable opportunity before the CIT(A). Accepting the submission of the assessee, the Tribunal restored both issues—disallowance of security charges and addition under section 43B—to the file of the CIT(A) for fresh adjudication in accordance with law after providing reasonable opportunity to the assessee.

Important Clarification

The Tribunal did not express any opinion on the merits of the disallowances. The remand was ordered solely to ensure compliance with principles of natural justice and to allow proper adjudication after affording adequate opportunity to the assessee.

Link to download the order -  https://www.mytaxexpert.co.in/uploads/1770710309_MSSUBHASHSTONEINDUSTRIESPRIVATELIMITEDNAINITALVS.ASSTT.COMMISSIONEROFINCOMETAXCENTRALCIRCLEALLAHABAD.pdf   

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