The Income Tax Appellate Tribunal, Delhi Bench “E”, considered the appeal filed by the assessee against the order passed by the Commissioner of Income Tax (Appeals)-24, New Delhi, under Section 250 of the Income-tax Act, 1961 for Assessment Year 2020-21.

The assessee had originally filed its return declaring income of ₹41,51,840/-. Pursuant to a search action conducted under Section 132 in the group cases, including the assessee, the assessment was reopened and notice under Section 148 was issued. The reassessment was completed under Section 147 read with Section 143(3) at an income of ₹43,81,822/- after making certain additions.

During the appellate proceedings, the assessee contested the disallowance of ₹7,66,605/- made under Section 43B of the Act. It was submitted that the said disallowance was inadvertently made suo motu by the assessee in the return, though such disallowance was not required under the provisions of law. The assessee had placed these facts before the Assessing Officer; however, the same were not considered. The CIT(A), while noting the submissions, dismissed the ground without adjudicating the issue on merits.

Before the Tribunal, it was contended that the appellate authority failed to pass a reasoned or speaking order and rejected the claim without assigning any justification. The Revenue did not object to the plea for restoration.

The Tribunal observed that the issue had not been examined on merits and that the principles of natural justice require the appellate authority to pass a speaking order after due consideration of the assessee’s submissions. In the interest of justice, the matter was restored to the file of the CIT(A) with a direction to adjudicate the issue afresh on merits and to pass a reasoned order. Accordingly, the appeal of the assessee was allowed for statistical purposes.

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