Appellate order on wrong issue set aside, with commission expenditure dispute remanded for fresh adjudication after due hearing.

An appellate order is vulnerable where the first appellate authority decides an issue different from the one raised in the appeal. Here, the appeal challenged disallowance of commission expenditure, but the order addressed levy of late fee under section 234E arising from a separate TDS matter. That mismatch required interference, so the impugned order was set aside and the quantum appeal remanded for fresh adjudication on the correct issue after due hearing; the connected rectification appeal did not survive after restoration of the main appeal.

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Issues: Whether the appellate order was liable to be set aside because the first appellate authority decided a different issue from the one raised in the appeal and, in consequence, the matter had to be restored for fresh adjudication.

Analysis: The appeal before the first appellate authority was against the assessment order disallowing commission expenditure, but the disposal addressed levy of late fee under section 234E of the Income-tax Act, 1961 arising from a different TDS order. This showed a mismatch between the subject matter of the appeal and the issue decided. The error warranted interference and restoration of the quantum appeal so that the correct issue could be decided after giving the assessee due opportunity of hearing.

Conclusion: The impugned appellate order was set aside and the quantum matter was remanded to the first appellate authority for on the disallowance of commission expenses.

Final Conclusion: The assessee obtained remand relief in the quantum appeal, while the connected rectification appeal did not survive after the restoration of the main appeal.

Ratio Decidendi: An appellate order passed on an issue different from the one actually raised in appeal is liable to be set aside and the matter restored for decision on the correct issue after affording due hearing.

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