2015 (10) TMI 1414 - AT - Income Tax

Addition u/s 68 and u/s 69A - assessee had applied under Rule 46 for admission of additional evidence in form of confirmations copy of I.T. returns PAN nos. copy of bank statements etc. of the share applicants - Held that - For want of decision on 46A and for insisting on only physical presence of the share applicants and ignoring all material available on record the principle of natural justice have been violated in this case. Besides for these deficiency the order is unsustainable As the facts emerge ld. CIT(A) has referred to the additional evidnce filed by the assessee and remand report dated 30-4-2012 susbmitted by assessing officer. However there is no finding as to whether the additional evidence has been admitted or not. Besides it appears that the additional evidence which consists of income-tax record confirmations etc. of the share applicants necessary for discharge of the onus of the assessee has not been cross verified by assessing officer from the department s record. In the absence of consideration thereof we are inclined to set aside the issue back to the file of assessing officer to decide the same afresh in accordance with law after giving the assessee an opportunity of being heard - Decided in favour of assessee for statistical purposes

Issues involved:
- Validity of the order passed by the Commissioner of Income Tax (Appeals)
- Violation of the principle of natural justice in the assessment order
- Validity of the notice to reopen the assessment
- Addition of amounts under sections 68 and 69A of the Income Tax Act
- Charging of interest under sections 234B and D

Analysis:

Validity of the order passed by the Commissioner of Income Tax (Appeals):
The appellant raised concerns about the order passed by the Commissioner of Income Tax (Appeals), contending that it was bad both in the eye of the law and on facts. The appellant argued that the order was illegal and untenable due to gross violations of the principle of natural justice. Additionally, the appellant highlighted that the notice to reopen the assessment was invalid due to the non-furnishing of valid reasons before issuing the notice under section 148.

Violation of the principle of natural justice in the assessment order:
The appellant argued that the assessment order was passed in violation of the principle of natural justice, rendering it illegal. The appellant emphasized that the order confirmed additions under sections 68 and 69A of the Income Tax Act without proper consideration of the evidence provided. The appellant pointed out that the financial year in question was 2002-03, and it was unreasonable to expect physical appearance from share applicants after a significant period. The appellant stressed that the burden of proof under section 68 was discharged by providing necessary evidence regarding the identity, genuineness, and creditworthiness of share applicants.

Validity of the notice to reopen the assessment:
The appellant raised concerns about the validity of the notice to reopen the assessment, citing non-furnishing of valid reasons before issuing the notice under section 148. The appellant argued that the notice was invalid due to this procedural deficiency.

Addition of amounts under sections 68 and 69A of the Income Tax Act:
The appellant contested the addition of amounts under sections 68 and 69A of the Income Tax Act, emphasizing that the additions were confirmed without proper appreciation of the evidence provided. The appellant argued that the assessing officer failed to cross-verify the additional evidence, crucial for discharging the burden of proof under section 68. The appellant requested a fresh assessment considering the evidence filed and giving an opportunity to be heard.

Charging of interest under sections 234B and D:
The issue of charging interest under sections 234B and D was raised, but no detailed analysis or arguments were provided in the judgment regarding this specific issue.

In conclusion, the Appellate Tribunal set aside the issues back to the file of the assessing officer for a fresh decision in accordance with the law, after giving the appellant an opportunity to be heard. The appellant's appeal was allowed for statistical purposes.

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