2017 (6) TMI 1339 - AT - Income Tax

Assessment of income - purchase of the assessee has been treated/added as unaccounted expenditure, and also total turnover of the assessee as unaccounted profits - Assessee argued that the AO while completing the assessment giving effect to the order of the Tribunal had not provided adequate opportunity to the assessee - HELD THAT - The fact that the total income of the assessee for the AYs 2000-01 to 2006-07 has come down from ₹ 125 Cr. to ₹ 18.5 Cr. on the basis of the mere evidences which have been produced before the AO itself given ground to grant the assessee one more opportunity to produce further evidences, if any, before the AO. .CIT(A) has dismissed the assessee s appeals on the basis of the letter filed by the assessee dated 11.06.2014, reading of which clearly shows the frustration of the assessee on account of his ill-health and predicament also gives reason that the issues in the appeal must be restored to the file of the AO. Not only this, the fact that the total purchase of the assessee has been treated/added as unaccounted expenditure, and also total turnover of the assessee as unaccounted profits a practical impossibility, which would need readjudication. This being so, the fact that the Ld.AR of the assessee has admitted that he has been able to compile all the details in respect of the additions made in the assessment and that he would be in a position to explain all the additions, in the interest of natural justice, the issues in this appeal are restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate his case. Appeals filed by the assessee allowed for statistical purposes.

Summary

Issues: Appeals against orders of the Commissioner of Income Tax, Appeals (Central) for multiple assessment years

Analysis:
The appeals were filed by the assessee against the orders of the Commissioner of Income Tax, Appeals (Central)-I, Chennai, for various assessment years. The assessee contended that the Assessing Officer (AO) did not provide adequate opportunity during assessment and treated purchases as unaccounted, turnover as unaccounted profits, and did not consider taxes paid and credit facility. The assessee, unrepresented by counsel before the Ld.CIT(A), explained ill-health and frustration in a letter. The Ld.AR argued for restoration of issues to the AO for re-adjudication. The Ld.DR argued that the total income reduced significantly, and the Ld.CIT(A)'s orders should be upheld.

The Tribunal noted the substantial decrease in total income from ?125 Cr. to ?18.5 Cr. based on existing evidence, warranting the assessee an opportunity to present further evidence. The Ld.CIT(A) dismissed appeals based on the assessee's letter expressing frustration due to health issues, indicating a need for issues to be reconsidered by the AO. The treatment of total purchases as unaccounted expenditure and total turnover as unaccounted profits raised practical concerns requiring reevaluation. The Ld.AR's assurance of presenting comprehensive details for all additions supported the restoration of issues to the AO for a fair re-examination, ensuring natural justice.

In conclusion, the appeals for the assessment years 2000-01 to 2006-07 were partly allowed for statistical purposes, emphasizing the importance of providing the assessee with a fair opportunity to substantiate their case.