Gurusukh Vintrade Services Private Limited Vs DCIT (ITAT Raipur)
Non-Speaking NFAC Order Set Aside- CIT(A)/NFAC’s Co-terminous Powers Ignored – Appellate Authority Failed to Make Independent Inquiry- ITAT Raipur Sends Back Case for Fresh Adjudication
Assessee, engaged in hotel business, had reported turnover of ₹1.10 crore as per GSTR-1. Based on TDS data in Form 26AS showing receipts u/s 194C & 194I(b), AO determined total receipts at ₹1.89 crore. As no return was filed either u/s 139(1) or in response to notice u/s 148, & there was no compliance to statutory notices, AO estimated 8% of total receipts as income, adding ₹15,51,680.
Before CIT(A), Assessee contended that its hotel operations were loss-making & requested estimation at 4% of turnover, but provided no industry comparables. CIT(A)/NFAC summarily confirmed the AO’s 8% estimate without detailed analysis or reasoning. Assessee also raised an additional ground claiming set-off of unabsorbed depreciation up to AY 2019-20, which remained unadjudicated.
ITAT observed that the CIT(A)/NFAC passed a summary order without making any inquiry or recording reasons, contrary to the mandate of sections 250(4) & 250(6), which require the appellate authority to conduct necessary verification & issue a speaking, reasoned order. The order lacked any discussion or examination of facts & failed to adjudicate the additional ground concerning set-off of unabsorbed depreciation – an issue directly affecting tax liability. Tribunal emphasized that the first appellate authority’s powers are co-terminous with those of the AO, & its failure to conduct inquiry or address relevant submissions amounts to denial of natural justice.
