KMC SPECIALITY HOSPITALS INDIA LTD.,TRICHY V. DCIT, CIRCLE-1, TIRUCHIRAPPALLI

ITA 3012/CHNY/2025

AI Insights

The case involves KMC Speciality Hospitals India Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) concerning the assessment year 2013-14. The primary contention was the disallowances made by the Deputy Commissioner of Income Tax, which included disallowances under sections 40A(3) and 115JB of the Income Tax Act, 1961. The CIT(A) had partly allowed the appeal by granting relief on depreciation but confirmed other disallowances. The appellant sought a personal hearing through video conferencing, which was not granted, leading to the appeal to the Tribunal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 836224 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 29-10-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y. SUDARSHAN
• Assessee Lawyers: SATHYAMURTHY
• Keywords: Depreciation; Principle of natural justice

Judgement Text

"आयकर अपीलȣय अͬधकरण, ‘डी’ Ûयायपीठ, चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI Įी इंटूरȣ रामा राव, लेखा सदèय एवं ᮰ी एस एस िव᳡नेᮢ रिव, ᭠याियक सद᭭य क े सम¢ BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं./ITA No.: 3012/CHNY/2025 िनधाᭅरण वषᭅ/Assessment Year: 2013-14 KMC Speciality Hospitals India Ltd., No.6, Royal Road, Cantonment, Tiruchirapalli – 620 001. PAN: AADCS 0189E Vs. The Deputy Commissioner of Income Tax, Circle-1, Tiruchirappalli. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri Sathyamurthy, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri Y. Sudarshan, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 27.01.2026 घोषणा कᳱ तारीख/Date of Pronouncement : 10.02.2026 आदेश/ O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER: This is an appeal filed by the assessee directed against the order of the Learned Commissioner of Income Tax (Appeals, Addl/JCIT(A)-1, Visakhapatnam (in short ‘CIT(A)’) dated 14.08.2025 for the assessment year 2013-14. 2. Briefly stated facts of the case are that assessee is a company incorporated under the provision of Companies Act, Printed from counselvise.com ITA No.3012/Chny/2025 :- 2 -: 1956. It is engaged in the business of running super speciality hospital. The return of income for the assessment year 2013-14 was filed on 27.09.2013 declaring ‘nil’ income and book profits of Rs.1,31,32,608/- u/s.115JB of the Income Tax Act, 1961 (hereinafter the ‘Act’). Against the said return of income, assessment was completed by the Deputy Commissioner of Income Tax, Circle-1, Tiruchirappalli (herein after the ‘AO’) vide order dated 31.03.2016 passed u/s.143(3) of the Act at a total income of Rs.1,01,44,756/- before set off of brought forward losses. While doing so, the AO made disallowance u/s.40A(3) of the Act of Rs.2,08,400/-, addition on account of diversion of fund to non-business activity of Rs.8,10,000/-, disallowance of depreciation on building renovation work capitalized of Rs.6,17,140/- and disallowance of interest of Rs.45,92,465/-. 3. Being aggrieved by the above disallowance, an appeal was filed before the CIT(A), who vide impugned order partly allowed by granting relief in respect of addition made on account of depreciation on building of Rs.6,17,140/-. The balance of additions made on account of disallowance, disallowance of interest u/s.40A(3) of the Act was confirmed by the CIT(A). Printed from counselvise.com ITA No.3012/Chny/2025 :- 3 -: 4. The Ld.AR submits that pursuant to notice of hearing issued by NFAC u/s.250 of the Act, the appellant filed a detailed submissions vide letter dated 10.04.2023. In the written submissions filed before the CIT(A), the appellant had asked for personal hearing through video conferencing. The CIT(A), Without granting personal hearing through video conferencing dismissed the appeal. Therefore, the Ld.AR prayed that the matter may be remanded to the file of the CIT(A)-NFAC for fresh hearing. 5. On the other hand, the Ld.Senior DR has no serious objection for remanding the matter back to the CIT(A) for fresh hearing. 6. We heard rival submissions and perused the material on record. Admittedly, the CIT(A) had not granted personal hearing through video conferencing despite the fact that the appellant had requested for the same. Thus, order passed by the NFAC suffers from the violation of principles of natural justice and also the order was passed in blatant violation of procedure prescribed for faceless hearing of appeal. Therefore, in the interest of justice, we remand the matter to the file of the NFAC for fresh Printed from counselvise.com ITA No.3012/Chny/2025 :- 4 -: disposal for the issues in appeal in accordance with law after affording an opportunity of personal hearing through video conferencing the appellant as requested for. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 10th February, 2026 at Chennai. Sd/- Sd/- (एस एस ͪवæवनेğ रͪव) (S.S. VISWANETHRA RAVI) ÛयाǓयक सदèय/JUDICIAL MEMBER (इंटूरȣ रामा राव) (INTURI RAMA RAO) लेखा सदèय/ACCOUNTANT MEMBER चे᳖ई/Chennai, ᳰदनांक/Dated, the 10th February, 2026 RSR आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Madurai 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. Printed from counselvise.com "