Radcliffe Schools Education Ltd. Vs ACIT (ITAT Delhi)
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) heard the assessee’s appeal against the order of the CIT(A)/NFAC dated 17.11.2025, which had confirmed the Assessing Officer’s disallowance of business promotion expenses amounting to ₹73,78,079 for the relevant assessment year.
The assessee is engaged in the business of schooling, granting franchises to schools in Hyderabad, Allahabad and Kochi, and in the composite sale of courseware books and rentals for business and K-12 schools. The case was selected for scrutiny under Sections 143(2) and 142(1) of the Income-tax Act. During the assessment proceedings, the assessee furnished detailed particulars of its business promotion expenses. The Assessing Officer, however, concluded that the assessee was meeting the personal expenses of its directors under the guise of business promotion expenses and disallowed the entire amount of ₹73,78,079. The CIT(A) upheld the disallowance, observing that the principle of res judicata did not apply to income-tax proceedings.
Before the Tribunal, the assessee contended that similar business promotion expenses had been consistently allowed in Assessment Years 2013-14 to 2016-17. It was further submitted that an identical disallowance made for Assessment Year 2018-19 had been deleted by the CIT(A). The assessee explained that business promotion expenses were comparatively higher during the year under consideration and Assessment Year 2018-19 because turnover had declined, requiring greater efforts by the directors to generate business. It was also argued that the books of account were duly audited, had not been rejected by the Assessing Officer, and the documentary evidence supporting the expenditure had not been disputed. The assessee therefore sought application of the principle of consistency.
