2018 (10) TMI 1657 - HC - Income Tax

Non cooperation by assessee - sufficient opportunities were given to the assessee to represent his case - No appearance by assessee - AO made addition as unexplained investment - CIT(A) proceeded further with the appeal ex parte and decided the appeal making the addition of unexplained investment - Tribunal remanded the proceedings before the CIT A for fresh adjudication - HELD THAT - As relying on PRINCIPAL COMMISSIONER OF INCOME TAX 3 VERSUS ASHOKJI CHANDUJI THAKOR 2018 (6) TMI 1546 - GUJARAT HIGH COURT we are of the opinion that in absence of any explanation by the assessee on the investment in question, AO was justified in making the addition of unexplained investment and thereafter learned CIT(A) was justified in confirming the same. Therefore, even the order passed by the learned CIT(A) which was on merits was not required to be interfered with by the learned CIT(A) and ought not to have been quashed and set aside without assigning any reasons. Under the circumstances, the impugned orders passed by the learned Tribunal cannot be sustained. - Decided in favour of revenue

Summary

Issues:
Challenging judgment of the Income Tax Appellate Tribunal - remand for fresh adjudication - non-cooperation of assesses - reversal of Tribunal's view by the Court in a related case.

Analysis:
The High Court of Gujarat heard appeals filed by the Revenue challenging the judgment of the Income Tax Appellate Tribunal (Tribunal) which remanded the proceedings before the CIT [A] for fresh adjudication. The Tribunal observed that despite notices served, no one appeared on behalf of the assesses before CIT [A] and no written response was submitted. The Tribunal still remanded the matter for fresh consideration. In a related case involving a group of assesses, the Court had previously reversed a similar decision of the Tribunal. The Court noted that the assesses were non-cooperative throughout the assessment proceedings and failed to provide any explanation for the unexplained investment. The AO and CIT [A] had made additions based on lack of cooperation from the assesses, and the Court upheld their decisions. The Court found that the Tribunal had erred in setting aside the orders of the AO and CIT [A] without proper reasons. Consequently, the Court quashed the Tribunal's order and restored the decisions of the AO and CIT [A]. As a result, the Tax Appeals were allowed, and the Tribunal's order was set aside.

This case highlights the importance of cooperation from assesses during assessment proceedings. The Court emphasized that assesses must actively participate, provide explanations, and cooperate with tax authorities to avoid adverse decisions. The Court's decision underscores the significance of providing justifications for investments and engaging in the appeals process. The judgment serves as a reminder that non-cooperation can lead to unfavorable outcomes in tax matters. The Court's intervention in this case aimed to uphold the integrity of the assessment process and ensure fair treatment for all parties involved.