ITAT Quashes CIT(A) Order for Lack of Natural Justice in Rs. 3.43 Lakh Expense Disallowance
In a recent case, ITAT Mumbai set aside the CIT(A)’s order wherein it disallowed Rs. 3,43,868 of his business expenses for the assessment year 2014-15, claiming they were not business-related and sent the case back for fresh examination after giving the taxpayer adequate opportunity to present evidence.
The case was filed by a taxpayer named Tarbir Singh Shahpuri in the Income Tax Appellate Tribunal (ITAT) Mumbai, against the Income Tax Officer (AO). The final decision on the matter was announced on November 17, 2025.
[related id=”74086″]
In appeal, the taxpayer challenged an order dated March 30, 2025, passed by the ADDL/JCIT (A) Faridabad [CIT(A)], under Section 250 of the Income-tax Act, 1961, for the assessment year 2014-15.
The CIT(A), in its order, made a disallowance of Rs. 343,868 for the alleged taxpayer for performing expenses not related to business activities. However, the taxpayer claimed that all the expenses incurred by him were wholly and exclusively for the purposes of his business.
On September 09, 2015, the taxpayer filed his Income Tax Return (ITR) for the assessment year 2014-15, disclosing his total income of Rs. 40,44,280. The case was selected for the purpose of scrutiny, and the return assessment was completed on December 23, 2016, under Section 143(3), declaring the total taxpayer’s income at Rs. 4,574,530, after making a disallowance of Rs. 343,868 out of expenses claimed against business income.
Dissatisfied taxpayer then approached CIT(A); however, CIT(A) dismissed his claim on the grounds that he did not furnish any documentary evidence in support of his arguments.
Thereafter, the taxpayer filed an appeal before the Tribunal. Wherein he mentioned that they were not given a chance of a personal hearing by CIT(A) before making the final decision, which is a violation of the provisions of natural justice. Hence, requested the tribunal to remand the case to CIT(A) for fresh consideration.
The tribunal endorsed the arguments of the taxpayer and noted that, in actuality, he was not given any fair chance to represent his side; hence, it sent the matter back to CIT(A) for fresh consideration of the case after giving adequate opportunity to the taxpayer and quashed the order of CIT(A). Meaning, the appeal has been allowed for statistical purposes.
Citation: Tarbir Singh Shahpuri Vs ITO (ITAT Mumbai); ITA No.3701/MUM/2025; 17/11/2025; 2014-15
