Vivaan Electronic Technology Pvt.Ltd. vs National Faceless Assessment Centre

PER MANISH AGARWAL, AM :

The present appeal is filed by assessee against the order dated 30.09.2025 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. NFAC/2021-22/10336705 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 18.03.2024 passed u/s 143(3) r.w.s. 144B of the Act pertaining to Assessment Year 2022-23.

Brief facts of the case are that assessee is a company and filed its return of income on 28.10.2022, declaring loss of INR 3,06,15,161/-. The case of the assessee was selected under CASS for complete scrutiny and statutory notice u/s 143(2) was issued on 02.06.2023 followed by various notices issued u/s 142(1) of the Act alongwith questionnaires from time to time. The assessee in terms of table reproduced at page 2 & 3 of the assessment order, had partly filed the details and in absence of complete details as called for, the AO has made the disallowances out of various expenses and further out of the import purchases and accordingly, total income was assessed at a loss of INR 79,95,491/-.

Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 30.09.2025, partly allowed the appeal of the assessee wherein assessee had filed all the relevant details with respect to the expenses disallowed by the AO as additional evidences under Rule 46A of Income Tax Rules, 1962 alongwith separate prayer made. However, Ld.CIT(A) without deciding the prayer for admission of additional evidences filed by the assessee under Rule 46A, has set aside the assessment order and remand it back to the file of AO with the directions to make necessary verification of the details so filed and pass a fresh order in accordance with law.

Aggrieved by the order of Ld.CIT(A), assessee is in appeal before the Tribunal by taking various Grounds of appeal mentioned in the appeal memo.

During the course of hearing, in terms of letter dated 08.04.2026, the assessee has withdrawn Ground of appeal No.5 taken towards the disallowance of INR 1,24,589/- made out of depreciation and further Ground of appeal No.8 with respect to the disallowance of INR 1,18,549/- towards the delayed payment of employees contribution to PF & ESI. Thus, the Grounds of appeal Nos. 5 & 8 raised by the assessee are dismissed.

The remaining Grounds of appeal are in relation to the disallowance out of total salary expenses of INR 80,99,085/- (being 20%) and further disallowance of INR 1,40,98,881/- being 5% of total import purchases made, which are decided as under.

Before us, in support of Grounds of appeal taken, Ld.AR for the assessee drew our attention to Paper Book pages 146 to 206 containing the details of the salary expenses and invoices and other details of import purchases filed before the ld. CIT(A) alongwith the petition filed under Rule 46A of the Income Tax Rules, 1962 (the Rules) before Ld. CIT(A) which is placed at pages 49 to 62 of the Paper Book. In the said petition, assessee has stated the reasons for not filing these details before the AO during the course of assessment proceedings and made a request for the admission of same as additional evidences. Ld. AR submits that Ld. CIT(A) without going into the merits of the issues and without obtaining the Remand Repot as per law has set aside the issue to the file of AO for consideration of the evidences so filed. Ld.AR submits that assessment order was passed u/s 143(3) of the Act and it was not an ex-parte order therefore, Ld. CIT(A) has no power to set aside the issues to the file of AO for fresh consideration. As per ld. AR, the ld. CIT(A) should obtain the Remand Report from the AO and decide the issues in accordance with law. He therefore, prayed that the matter be sent back to the file of Ld.CIT(A) to decide the appeal of the assessee in accordance with law. Alternatively, Ld. AR requested the Bench for consideration of the issues of disallowance made out of salary and import purchases on merits of the case for which he referred the details filed as available at page 146 to 206 of the Paper Book.

On the other hand, Ld. Sr. DR for the Revenue submits that the ld. CIT(A) has already remanded the issues to the file of AO for making necessary verifications of additional evidences field by the assessee. Thus, there should be no grievance remained to the assessee. She submits that despite of numerous opportunities, the assessee has failed to file the relevant details before the AO even otherwise, the assessee has not been able to establish its case as no reasonable cause for admission of the additional evidences was stated and therefore, she requested for the confirmation of the order of the AO.

Heard the contentions of both the parties at length and perused the material on record. In the instant case, before the AO despite of repeated opportunities, assessee has failed to file all the details with respect to establish the genuineness and business expediency of the expenses claimed on account of salary to employees and import purchases. The AO in absence of necessary details of import purchases, was unable to verify the claim of the assessee and thus has proceeded to complete the assessment by making adhoc disallowance out of salary expenses @ 20% and out of import purchases @ 5%. However, when the assessee has filed all such details in support of the claim of expenditure on account of salary and import purchases before Ld. CIT(A) but the ld. CIT(A) neither called for the Remand Report from the AO nor had verified the details so filed by the assessee himself. It is observed that Ld. CIT(A) had set aside the issues to the file of AO for making verification of the details so filed by the assessee which was beyond the power of Ld. CIT(A) as provided in the proviso to section 251(1)(a) as per which the Ld. CIT(A) has power to remand the issues to the file of AO where the assessment order was passed u/s 144 of the Act. As observed above, in the instant case, the order was passed by the AO u/s 143(3), therefore, the Ld. CIT(A) has no power to set aside the assessment to the file of the AO therefore, the order of ld. CIT(A) in remanding the assessment back to the file of the AO is not in accordance with the power conferred as per Act.

However, the fact remained that the petition filed by the assessee under Rule 46A remained unattended nor any remand report was obtained on the additional evidences filed by the assessee. Accordingly, we though not are in agreement with the powers exercised by ld. CIT(A) of setting aside the matter to the file of however, in the larger interest of justice, in our considered opinion, it would be better that such evidences be verified by the AO with reference to the expenses claimed by the assessee. Therefore, we set aside the issue to the file of AO for verification all the evidences so filed before Ld. CIT(A). With these directions, all the Grounds of appeal raised by the assessee except Ground of appeal Nos. 5 & 8 raised by the assessee which are dismissed as withdrawn, are allowed for statistical purposes.

In the result, the appeal of the assessee is partly allowed.