TaxTMI 
TaxTMI 
2026 (7) TMI 1399
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....irrecoverable in the books of account during the relevant previous year. 2. That the Learned CIT(A) failed to appreciate the detailed submissions, explanations and documentary evidence furnished by the Appellant substantiating the claim of bad debts of Rs. 3,56,65,465/- and has passed a non-speaking and cryptic order by merely reproducing the findings of the NFAC, without independent application of mind or adjudication on merits. 3. That the Learned CIT(A) erred in not following the settled legal position laid down by the Hon'ble Supreme Court and various High Courts that once a bad debt is written off in the books of account, no further proof of irrecoverability is required for allowance under section 36(1)(vii) of the Act. 4. That the Learned CIT(A) erred in law in not quashing the assessment order, despite the fact that the NFAC failed to provide personal hearing through video conferencing as per section 144B(7)(vii) and failed to follow the principles of natural justice by not furnishing the replies received under section 133(6), which were relied upon for making the disallowance, thereby depriving the appellant of an effective opportunity of hear....
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....see carried the matter in appeal before the Ld. CIT(A). During the appellate proceedings, detailed written submissions were filed explaining that the impugned debts represented business debts which had been duly written off in the books of account during the relevant previous year and that the corresponding income had already been offered to tax in the earlier years. It was further contended that after the amendment to section 36(1)(vii), the assessee was not required to establish that the debt had actually become irrecoverable. The assessee also objected to the reliance placed by the Assessing Officer on replies received under section 133(6), contending that copies of such replies were never supplied before making the addition. The Ld. CIT(A) called for a remand report from the Assessing Officer. However, after considering the remand report and the rejoinder filed by the assessee, the Ld. CIT(A) upheld the action of the Assessing Officer by holding that the assessee had failed to substantiate the claim of bad debts and accordingly dismissed the appeal. 6. During the course of hearing before us, the Ld. Authorised Representative reiterated the submissions advanced before the low....
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....te proceedings, the Ld. CIT(A) called for a remand report from the Assessing Officer. However, the remand report itself demonstrates that proper verification was never carried out. It was pointed out that in respect of certain parties, partial replies had admittedly been received by the Assessing Officer, yet the remand report proceeds on the footing that no reply had been received at all. This factual inconsistency, according to the Ld. AR, clearly establishes that neither the assessment proceedings nor the remand proceedings were conducted after proper appreciation of the available records. It was therefore pleaded that the entire matter deserves to be restored to the file of the Assessing Officer after directing him to furnish all replies received under section 133(6) and thereafter decide the issue afresh in accordance with law. 10. Per contra, the Ld. Departmental Representative relied upon the orders of the authorities below. It was submitted that despite several opportunities afforded during the course of assessment proceedings, the assessee failed to furnish complete ledger accounts, confirmations and other documentary evidence necessary to substantiate its claim. It was....
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....ot merely procedural but goes to the root of the principles of natural justice. An assessee cannot be condemned on the basis of evidence collected behind its back without being afforded an effective opportunity to explain or rebut the same. 14. We also find substance in the contention advanced by the Ld. AR that the remand proceedings conducted before the Ld. CIT(A) have not removed the factual deficiencies noticed during the assessment proceedings. It has been specifically pointed out before us that even in the remand report, the Assessing Officer has recorded in respect of certain parties that no response was received to the notices issued under section 133(6), whereas the records indicate that partial replies had in fact been received from those very parties. If such factual discrepancies exist in the remand report itself, the correctness of the factual foundation on which the disallowance has been sustained becomes doubtful. In our considered opinion, such inconsistencies require proper verification before any adverse conclusion can be drawn against the assessee. 15. We further notice that while rejecting the claim, the Assessing Officer has repeatedly observed that the a....