2016 (2) TMI 1231 - AT - Income Tax

Addition on account of difference between gross receipt of profit and loss account and statement of 26AS - HELD THAT - After going through the relevant documents available on record, we are of the view that assessee has throughout made the contention that AO has not granted adequate opportunity of being heard to the assessee and without considering the submissions / evidences of the assessee, which is in the interest of natural justice, is very essential. Therefore the issues in dispute are set aside to the file of the AO to decide the same afresh, underthe law, after giving full opportunity to the assessee of being heard. AO is also directed to consider the submissions and evidences, if any, to be submitted by the Assessee, afresh and decide the issue in dispute in accordance with law. Assessee is also directed to produce all the submissions and evidences to the AO, so that AO may consider the same, as per rules. - Appeal filed by the Assessee stands allowed for statistical purposes.

Summary

Issues:
1. Addition of difference between gross receipt of profit and loss account and statement of 26AS
2. Adhoc/estimated disallowance of expenses debited in profit and loss account
3. Charging interest under sections 234A, 234B, 234C of the Income Tax Act, 1961

Analysis:

Issue 1: Addition of difference between gross receipt of profit and loss account and statement of 26AS
The Assessee challenged the Order of the Ld. Commissioner of Income Tax (Appeals) regarding the addition of a specific amount on account of the variance between the gross receipt of the profit and loss account and the statement of 26AS. The Assessee argued that the Ld.CIT(A) erred in law by confirming the action of the Assessing Officer (AO) without considering the submissions and evidence provided. The Assessee contended that the AO did not grant adequate opportunity for a hearing, which is essential for natural justice. The Tribunal agreed with the Assessee's contention and set aside the issue to the file of the AO for fresh consideration. The AO was directed to provide a full opportunity for the Assessee to be heard and consider all submissions and evidence before deciding the matter afresh.

Issue 2: Adhoc/estimated disallowance of expenses debited in profit and loss account
The Assessee also contested the adhoc/estimated disallowance of a specific amount for expenses debited in the profit and loss account. Similar to the first issue, the Assessee argued that the Ld.CIT(A) confirmed the AO's action without granting adequate hearing opportunities. The Tribunal found merit in the Assessee's argument and directed the AO to reconsider the issue after providing a fair hearing and considering all submissions and evidence. The Assessee was instructed to present all relevant documents to the AO for proper evaluation.

Issue 3: Charging interest under sections 234A, 234B, 234C of the Income Tax Act, 1961
The Assessee raised objections against the charging of interest under various sections of the Income Tax Act, 1961. The Tribunal did not delve into this issue specifically in the judgment, indicating that the primary focus was on the procedural fairness and hearing rights of the Assessee. Therefore, the decision did not provide detailed analysis or direction regarding this particular issue.

In conclusion, the Tribunal allowed the appeal filed by the Assessee for statistical purposes, emphasizing the importance of providing a fair opportunity for the Assessee to be heard and for all evidence to be considered in tax assessment proceedings.