ACIT, Circle 10(1) vs Harish Chandra Infrastructure Pvt. Ltd.

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the revenue against the order dated 09.10.2025 of the Ld. National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) arising out of the assessment order u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by DCIT, Circle 12(1) New Delhi, for AY: 2007-08.

On hearing ld. DR we find that assessment order though passed u/s 143(3) of the Act has been set aside by ld. CIT(A) to assessing officer for fresh adjudication with a direction to make fresh assessment after examining the issue by issue of notice u/s 133(6) of the Act and after giving adequate opportunity to the assesse. We have gone through the impugned assessment order and the same mentions of notice u/s 143(2) followed by questionnaire u/s 143(1) being issued and in response to which authorized representative has appeared from time to time and submitted the requisite details which were part of the assessment record and assesse was asked to further justify ledger expenses and even assesse was asked to file audit report vide subsequent notice u/s 142(1) but the assesse had not responded the same and the AO rejected the books of accounts invoking Section 145(2) of the Act making addition on account of disallowance expenditure. Further, AO records of notice being issued to assesse for filing evidence for establishing genuineness of transaction of share application money, however, again assesse had not responded and an addition was made u/s 68. Further, AO had called confirmations of sundry creditors but again assesse had not responded and therefore, AO concluded that these are bogus liabilities and addition was made. Further, the claim of depreciation was examined and in the absence of evidence the same was also found to be bogus. Further, disallowance was made on account of certain expenses which were not found genuine. Thus, returned income of Rs.21,98,990/- was recomputed at Rs.5,34,93,759/- in the impugned order NFAC has merely reproduced the assessment order and mention that assesse had filed various replies and furnished additional evidences. NFAC mentions remand report was also claimed which has not been submitted by AO. In para 5.3 NFAC mentions of the evidences filed with regard to issue for which AO has given adverse finding, however, instead of examining all these evidence ld. NFAC has resorted to a short note of restoring the issue on merits to the AO by observing that the issue is require extensive inquiries and verification which may not be possible at the level of Commissioner (Appeal).

We are of the considered view that these observations of NFAC in para 5.5 of the impugned order are against the mandate of law and it is not case where best assessment order was passed so as to restore the issue back to AO. NFAC should have been examined the facts and evidence and returned the finding on the genuineness of claims of assesse.

In the light of aforesaid the impugned order of ld. First Appellate Authority is set aside and issue are restored to files of ld. CIT(A) to give its own findings on the issue raised by assesse on the basis of material before ld. CIT(A) but after opportunity of hearing given to the assesse. The appeal is allowed for statistical purposes.