TaxTMI 
TaxTMI 
2026 (7) TMI 1796
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....sed without providing opportunity of hearing inasmuch as the Ld. AO did not issue a show cause notice with draft assessment order. CIT(A) order passed in violation of principle of nature justice 2 On the facts and the circumstances of the case and in law, the CIT(A) order is passed in violation of principle of nature justice, i.e. the Ld. CIT(A) did not provide an opportunity of being heard (including video conferencing), before passing the order. Adhoc disallowance of Sales promotion expenses - Rs. 94,83,750/- 3. On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the ad-hoc disallowance of 20% of the Sales promotion expenses i.e. Rs. 94,83,750 made by the Ld. AO. 4. On the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred by determining that the sales promotion expenses lack sufficient nexus to business results thereby erred in upholding the disallowance of sales promotion expenses of Rs. 94,83,750 made by the Ld. AO. 5. On the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in not admitting the application for additional evidence ....
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....t no show cause notice proposing to make the addition of club expenses was issued to the Appellant. Claim of deduction under section 80JJAA of the Act-Rs. 10,19,85,582 14. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not granting the additional claim for deduction under section 80JJAA of the Act amounting to Rs. 10,19,85,582." 3. Fact of the case, in brief, are that the assessee is a registered NBFC and is engaged in providing financial services. It filed the return of income for AY 2019-20 on 29.11.2019 declaring total income at Rs. 1595,64,44,780/- after claiming deduction of Rs. 15,14,85,155/- under Chapter VIA of the Act. Subsequently, a revised return of income was filed on 11.08.2020 admitting total income of Rs. 15,74,48,210/-. The case was selected for "complete scrutiny" under the E-assessment Scheme, 2019. After hearing the assessee, the AO added the difference of Rs. 21,16,10,571/- between original and revised ROI because assessee did not explain or furnish any documents in support of the increased deduction. He also added Rs. 88,82,80,954/- u/s. 41(1) of the Act and disallowed Rs. 94,83,750/- out of sales promotion ....
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.... 80JJAA of the Act. The appellant has also made an application for admission of additional evidence in respect of the sales promotion expenses and additional claim of deduction u/s. 80JJAA. The appellant has also filed a paper book containing 12 items including the submissions and documents filed before the lower authorities at serial No. 1 to 7 and additional evidence relating to section 80JJAA of the Act from serial No. 8 to 12. 6. We shall first take up the request for admission of additional evidence in respect of deduction u/s. 80JJAA of the Act. The Ld. AR submitted that during the course of appellate proceedings, the CIT(A) had issued a hearing notice dated 14.11.2022, in response to which appellant filed partial submission on 29.12.2022 and 07.09.2023. The appellant had also made a request for admission of additional evidence to the CIT(A). The appellant was issued a notice dated 19.11.2024 by the AO for the remand hearing in respect of the additional evidence. In response thereto, the appellant uploaded audit report u/s. 80JJAA of the Act in Form No. 10DA on the income tax portal on 02.12.2024. The appellant was in the process of preparing and compiling detailed submiss....
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....r from the assessment order where there is no mention about the show cause notice. Only one notice u/s. 142(1) dated 22.07.2021 was issued to the assessee fixing the hearing on 06.08.2021. The questionnaire was lengthy and exhaustive covering 18 issues. The assessee had filed part details on 27.09.2021 and was in the process of filing complete details. However, without waiting for the final reply of the assessee, the AO passed the assessment order on 31.09.2021. Regarding violation of the principles of natural justice, the Ld. AR submitted that the CIT(A) did not wait for the remand report and passed the order without issuing any final show cause notice regarding the adverse findings. 10. On the other hand, the Ld. CIT-DR supported the orders of lower authorities and submitted that adequate opportunity of being heard was provided to the assessee by both AO and CIT(A). 11. We have both parties and perused the details submitted by the appellant. The AO issued notice u/s. 143(2) on 31.03.2021. Subsequently, he issued notice u/s. 142(1) on 22.07.2021 fixing the hearing on 06.08.2021. It is seen from the said notice that the AO had asked for various details vide 18 questions, whic....