2013 (7) TMI 918 - HC - Income Tax

Summary

Issues involved: Condonation of delay in re-filing the appeal; Challenge to orders by Revenue; Addition of income under different heads; Violation of principles of natural justice.

Condonation of delay in re-filing the appeal: The application sought to condone a delay of 987 days in re-filing the appeal, which was allowed by the court after hearing the counsel for both parties and finding sufficient cause for the delay.

Challenge to orders by Revenue: The Revenue challenged the orders passed by the Income Tax Appellate Tribunal and the Commissioner of Income Tax (Appeals) regarding additions made by the Assessing Officer for the year 2000-01. The Tribunal and the Commissioner had partly deleted the additions made by the Assessing Officer, leading to separate appeals by both the assessee and the department.

Addition of income under different heads: The Assessing Officer added undisclosed income under three heads related to the sale of vehicles, spare parts, and service of vehicles. The Commissioner confirmed the addition on the sale of vehicles, partly set aside the addition on spare parts, and deleted the addition on service of vehicles due to lack of evidence or material.

Violation of principles of natural justice: The Income Tax Appellate Tribunal set aside the addition of income from the sale of vehicles, citing a violation of principles of natural justice as the reason. The Tribunal also set aside the addition related to spare parts entirely and upheld the deletion of income from service of vehicles.

Separate appeals by assessee and department: Both the assessee and the department filed separate appeals before the Income Tax Appellate Tribunal. The department's appeal was dismissed, while the assessee's appeal was allowed on grounds of violation of natural justice and lack of evidence for the additions made by the Assessing Officer.

Judgment: The court held that the Tribunal and the Commissioner had erred in not remitting the matter back to the Assessing Officer for fresh assessment after finding a violation of natural justice. The court concluded that the failure to do so would lead to a miscarriage of justice and allowed the appeal by modifying the Tribunal's order to restore the assessment to the Assessing Officer for a fresh decision in accordance with the law and principles of natural justice.