RAJENDRA DATTATRAY SHINDE,NASHIK V. ITO, NASHIK

ITA 2941/PUN/2025

AI Insights

The case involves two appeals filed by the assessee, Rajendra Dattatray Shinde, against the orders of the CIT(A) for the assessment years 2017-18 and 2018-19. The primary issues in the appeals were the disallowance of various business expenses claimed by the assessee, including rent, interest on a business loan, and salaries and wages paid to employees. The CIT(A) had dismissed the appeals without discussing the merits due to non-compliance by the assessee. However, the Tribunal found that the CIT(A) had not properly addressed the grounds of appeal and was obligated to decide the case on its merits, regardless of the assessee's compliance.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 847714 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Pune
• Assessment Year: 2018-2019
• Appeal Filed On: 30-11-2025
• Other Referred Cases: Pr.CIT(Central) Vs.Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAILEE DHOLE; THROUGH
• Assessee Lawyers: ANUP LADDHA THROUGH
• Keywords: Set aside
• Section: 147

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2938 & 2941/PUN/2025 निर्धारण वर्ा / Assessment Year : 2017-18 & 2018-19 Rajendra Dattatray Shinde, 1, Ojhar TS Tal. Niphad, Nashik-422207 Maharashtra PAN-BIFPS6762K Vs. ITO, Ward-2(1), Nashik Appellant Respondent Assessee by Shri Anup Laddha (through virtual) Revenue by Sailee Dhole, JCIT (through virtual) Date of hearing 24-03-2026 Date of Pronouncement 26-03-2026 आदेश / ORDER PER DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER: These are two appeals filed by assessee against the separate order’s of Ld. CIT(A) (NFAC) u/s 250 of the IT Act dated 02/9/2025 for A.Y. 2017 & 2018-19. 2. We have heard both the parties perused the records. 3. It is observed that Ld. CIT(A) for A.Y. 2017-18 has reproduced following grounds of appeal in the order. 1. The Learned Assessing Officer (AO) erred in disallowing Rs 1,20,000 claimed as rent expense, which is a legitimate business expense incurred for godown cum office premises necessary for running the appellants commission business. The disallowance is unjustified as the appellant is Printed from counselvise.com 2 ITA No.2938 & 2941/PUN/2025 entitled to deduction under Section 30 of the Income Tax Act, and no adverse inference should be drawn in the absence of contrary evidence. 2. The AO has wrongly disallowed Rs 3,40,000 of Interest paid on a business loan, which was used for financing working capital requirements. The interest expense is allowable under Section 36(1) (iii) as it was incurred wholly and exclusively for business purposes. The disallowance is arbitrary and contrary to settled legal principles. 3. The AO erred in disallowing Rs. 10,80,000 in salary and wages paid to employees assisting in the appellants commission business. The expense is wholly and exclusively for the purpose of business, making it allowable under Section 37(1). The disallowance was made without any basis, even though employee-related expenses are essential for business operations. 4. The AO has raised a demand of 15,74,243, which is primarily based on disallowed expenses. Since the additions are disputed and under appeal, the appellant requests a stay on the demand under Section 220(6) until the appeal is decided, to prevent undue hardship and coercive recovery actions. 5 The assessment order passed under Section 147 r.w.s. 144 is erroneous and unjustified in law and on facts. The appellant prays for relief by deleting the disallowed expenses and modifying the total taxable income accordingly. 6. The appellant reserves the right to raise, alter, amend, or add additional grounds of appeal at any stage of the appellate proceedings, as may be necessary for the proper adjudication of the matter. 4. However , the grounds of appeal reproduced by CIT(A) in the order does not pertain to the assessee. Also the Statement of facts mentioned by CIT(A) in the order for AY 2017-18 does not pertain to the Assessee. This shows lack of application of mind . 5. Be it as it may be , Ld. CIT(A) has dismissed assessee’s appeal without discussing merits of the case on account of non-compliance. Printed from counselvise.com 3 ITA No.2938 & 2941/PUN/2025 6. Similarly the CIT(A) has not adjudicated the grounds raised by the Assessee for AY 2018-19 also. The Hon’ble Bombay High Court has held in the case of Pr.CIT(Central) Vs.Premkumar Arjundas Luthra (HUF) Bombay)/[2017] 297 CTR 614 (Bombay) as under : Quote, “8.From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is coterminous with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” Unquote. Thus, Hon’ble Bombay High Court has categorically held that CIT(A) has to decide the appeal on merit and CIT(A) does not have any power to dismiss appeal for non-prosecution. Printed from counselvise.com 4 ITA No.2938 & 2941/PUN/2025 7. In these facts and circumstances of the case the Order of CIT(A) is set aside to CIT(A) for denovo adjudication. The CIT(A) shall provide opportunity to the assessee. 8. In the result both the appeals of the Assessee are allowed for statistical purpose. Order pronounced on this 26th day of March, 2026. Sd/- Sd/- (VINAY BHAMORE) (DIPAK RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दिन ांक / Dated: 26th March, 2026. Neeta आिेश की प्रतितितप अग्रेतिि / Copy of the Order forwarded to: 1. अपीि र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. तिभ गीय प्रतितनति, आयकर अपीिीय अतिकरण, \"SMC\" बेंच, पुणे / DR, ITAT, \"SMC\" Bench, Pune. 5. ग र्ड फ इि / Guard File. आिेश नुस र / BY ORDER, Assistant Registrar आयकर अपीिीय अतिकरण, पुणे / ITAT, Pune. Printed from counselvise.com "