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Judgment
PER KRINWANT SAHAY A.M.
Appeal in this case has been filed by the Assessee against the order dated 19.12.2025 passed by the Ld. CIT(A)-26, Delhi for the A.Y. 2023-24.
The assessee has raised following grounds of appeal :-
“1.That the impugned order dated 19.12.2025 passed by the Ld. Commissioner of Income Tax (Appeals), Delhi-26 u/s 250 of the Income-tax Act, 1961, is bad in law, void ab initio, non-speaking and unsustainable, having been passed without due application of mind, in gross violation of statutory mandate and settled principles of appellate adjudication.
2.That the Ld. CIT(A) has failed to discharge the quasi-judicial obligation cast upon him under section 250(6) of the Act, inasmuch as the impugned order does not contain independent reasons, issue-wise determination, or proper adjudication of grounds raised, and merely endorses the conclusions of the Assessing Officer in a mechanical manner.
3.That the impugned appellate order is vitiated due to gross violation of principles of natural justice, as the Ld. CIT(A) has decided the appeal ex-parte on merits, solely on the alleged premise of "non-submission", without granting effective opportunity of hearing, despite serious civil consequences involved.
4.That the Ld. CIT(A) erred in law in dismissing the appeal merely on the ground that submissions were not filed, without exercising powers vested under section 250(4) of the Act to call for records, remand report, or clarification, thereby rendering the order arbitrary and unsustainable.
5.That the Ld. CIT(A) has erred in law and on facts in confirming the ad-hoc disallowance of Rs. 26,96,850/-made by the Assessing Officer u/s 37(1), being 15% of staff welfare expenses, without identifying any specific expenditure which was bogus, excessive, personal or non-business in nature.
6.That the impugned disallowance of Rs. 26,96,850/-is purely estimate-based, arbitrary and devoid of evidentiary foundation, and therefore contrary to settled law that no disallowance can be sustained merely on suspicion or percentage basis.
7.That the Ld. CIT(A) has further erred in law by observing that an enhancement was "possible" but not carried out, thereby demonstrating complete non-application of mind and legal confusion, vitiating the entire finding.
8.That the Ld. CIT(A) has erred in law and on facts in confirming the disallowance of Rs. 15,13,750/-, being 25% of medical expenses, without appreciating that the expenditure was incurred wholly and exclusively for the purposes of business, and without rebutting the assessee's explanation on commercial expediency.
9.That the disallowance has been sustained without recording any finding that the expenditure was personal or prohibited under law, rendering the confirmation perverse and contrary to section 37(1).
10.That the Ld. CIT(A) has erred in law and on facts in mechanically confirming the addition of Rs. 21,90,37,360/-, being 2% of total purchases, allegedly treated as "bogus purchases" u/s 37(1), without establishing that the purchases were fictitious, goods were not received, payments were not made through banking channels, or that any incriminating material existed.
11.That the impugned addition is internally contradictory, as the Assessing Officer himself accepted the entire turnover, contract receipts, consumption and closing stock, thereby implicitly accepting the purchases, and yet made an ad-hoc disallowance without rejecting the books of account u/s 145(3).
12.That the Ld. CIT(A) failed to appreciate that no addition on account of bogus purchases can survive in the absence of rejection of books of account, rendering the confirmation legally unsustainable.
13.That the Ld. CIT(A) erred in law in upholding the addition merely on the basis that certain vendors were "non-filers", which does not ipso facto render purchases non-genuine, particularly when no adverse material was brought on record.
14.That the appellant craves leave to add, alter, amend or withdraw any ground at or before the time of hearing.”
Brief facts of the case are that the assessee is a private limited company engaged into the business of construction as civil contractor. For the year into consideration, the assessee filed its return of income declaring total income at Rs. 14,92,85,180/- which was revised to Rs. 25,75,42,680/-during the assessment proceedings by way of filing revised computation. Impugned order was passed by way of making addition of Rs. 22,32,47,960/- and assessed the income to the tune of Rs. 48,07,90,640/-.
The Ld. CIT(A) has dismissed the appeal of the assessee for non-prosecution. The Ld. DR pointed out that several opportunities were given to the assessee on fixing the case on different dates but the assessee did not comply with the notices issued by the Ld. CIT(A).
We have considered the findings given by AO in the assessment order and the Ld. CIT(A) in the appellate order. We have also considered the arguments of Ld. DR. We find that the assessee has not complied with the notices issued by the Ld. CIT(A) but the Ld. CIT(A) was supposed to pass a speaking order on the basis of material available on record that he has not done. Therefore, keeping in view the element of natural justice, we are inclined to remand this issue to the file of the Ld. CIT(A) with a direction to give adequate opportunity to the assessee of being heard and pass an order on merits. In case the assessee files papers and details then the Ld. CIT(A) may also consider to seek remand report thereon and then decide the issue. Accordingly, the appeal is remanded back to the file of the Ld. CIT(A).
In the result, the appeal of the assessee is allowed for statistical purposes.