2010 (2) TMI 1272 - AT - Income Tax

Summary

Issues involved: Appeal against order of Commissioner of Income-tax (Appeals) regarding ex parte assessment u/s. 144 r.w.s 147 for assessment year 1995-96.

The appeal was filed by the assessee against the order of Commissioner of Income-tax (Appeals)-IV, Surat in appeal No.CAS/IV/96/03-04 dated 28-08-2003. The assessment was conducted by the ITO, Ward-5(1), Surat u/s. 144 r.w.s 147 of the Income-tax Act, 1961 for the assessment year 1995-96. The assessee's Paper Book was objected to by the Ld. CIT-DR and the counsel for the assessee stated that they were not relying on it. The issue of reopening u/s.147 was not raised before the CIT(A) or the Tribunal, and the counsel for the assessee conceded that no such ground was raised. The counsel did not pursue this issue further as there was no case for reopening based on the assessee's facts.

Regarding the merits of the case, the assessee raised two issues: addition of unexplained cash credits and disallowance of expenses. The assessment was ex parte u/s.144 of the Act, with no opportunity provided by the Assessing Officer. The CIT(A) also did not provide an opportunity as the appellate order was not a speaking order. The Ld. counsel for the assessee requested that the matter be restored before the CIT(A) on merits, without raising legal issues. The Tribunal found that none of the authorities below had decided the issues on merits or provided a reasonable opportunity to be heard before making additions. In line with the principles of natural justice, the Tribunal set aside the two issues on merits to the file of the CIT(A) for a decision after obtaining a remand report from the Assessing Officer and providing a reasonable opportunity of being heard to the assessee. Consequently, the assessee's appeal was allowed for statistical purposes.

*Order pronounced in Open Court on 01/02/2010*