Bombay High Court: Accost Media LLP v. DCIT [ITA No. 753/2025]
The High Court has set aside ITAT Order, holding that the tribunal failed to adjudicate a taxpayer’s jurisdictional objection alleging non-compliance with the mandatory assessment procedure. The Court ruled that the issue went to the root of the matter and required adjudication by the Tribunal. The case arose from the assessment of Accost Media LLP (Petitioner) for the A.Y. 2021-22. The AO treated purchases and labour expenses as unexplained expenditure. The CIT(A) partly allowed the taxpayer’s appeal. It restricted the disallowance of the expenditure, and the tribunal upheld that decision. Before the High Court, Petitioner contended that the AO had not followed the mandatory procedure prescribed under Section 144B before passing the assessment order. It also argued that it was denied an opportunity to respond to the allegation that certain suppliers could not be physically verified. According to the taxpayer, that allegation appeared for the first time in the assessment order and not in the show-cause notice. The Revenue argued that the jurisdictional objection had never been raised before the Tribunal. Rejecting that contention, the Court held that the taxpayer had specifically raised the issue in its rectification application before the Tribunal. It further held that the tribunal had failed to return any finding on that objection. The Court also held that the Tribunal was required to examine the documentary evidence produced by the taxpayer to establish the genuineness and creditworthiness of the transactions. Accordingly, the High Court set aside the ITAT Order.
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