2012 (7) TMI 548 - AT - Income Tax

Addition made on protective basis in the hands of the assessee Held that - CIT(A) has not in corporated full facts in his order. Neither any finding have been given on merit nor the issue that how second notice u/s 148 is valid been examined whereas assessee has objected that no addition can be made on protective basis in proceeding initiated u/s 148 - matter sent back to the file of CIT - appeals of the Revenue are allowed for statistical purpose.

Summary

Issues:
- Appeal by Revenue against deletion of addition made on protective basis in the hands of the assessee for assessment years 1998-99 and 1999-2000.

Analysis:

1. Issue of Deletion of Addition on Protective Basis:
- The appeals were filed by the Revenue against the deletion of addition of Rs. 56.00 lacs each for the assessment years 1998-99 and 1999-2000, made on a protective basis in the hands of the assessee by the Assessing Officer (AO). The AO had made these additions due to deposits in various bogus, benami, and fictitious accounts discovered during a search conducted by the CBI at the bank branch where the assessee worked as Branch Manager. The ld. CIT(A) had deleted these additions, citing that similar additions were confirmed in the names of three other individuals. The Department contended that the AO's orders should be upheld, while the assessee's counsel relied on the orders of the ld. CIT(A) and presented evidence, including a judgment from the C.B.I. Court exonerating the assessee.

2. Judgment and Remand by ITAT:
- The ITAT found discrepancies in the order of the ld. CIT(A) regarding the incorporation of facts and notices served on the assessee. It was noted that the AO had initially made substantial additions on a protective basis, which were later deleted by the ld. CIT(A) and the Tribunal. Subsequently, after issuing a notice under section 148, the AO made further additions for the assessment years in question. The ITAT concluded that the matter should be remanded to the ld. CIT(A) for a fresh decision after providing the assessee with a reasonable opportunity to present their case. The ITAT set aside the orders of the ld. CIT(A) for both years and remanded the matter for a new decision based on merit.

3. Conclusion:
- The ITAT allowed the appeals of the Revenue for statistical purposes, indicating that the matter was being sent back to the ld. CIT(A) for a fresh decision. The judgment highlighted the need for a comprehensive review of the facts and proper examination of the issues raised by both parties. The decision emphasized the importance of due process and providing the assessee with a fair opportunity to present their case.