2020 (1) TMI 1443 - AT - Income Tax

Reopening of assessment u/s 147 - as argued No sufficient time to the assessee for presenting his case before the Assessing Officer - HELD THAT - On perusal of the assessment order, we find that the Assessing Officer himself noted that the show cause notice was received by the assessee on 03.12.2018 towards posting the case for hearing on 07.12.2018, which clearly indicates that the Assessing Officer has not given sufficient time to the assessee for presenting his case before the Assessing Officer. The assessee has submitted that the assessee has challenged the legal issue of reopening of assessment under section 147 of the Act and without giving sufficient opportunities of being heard to the assessee, the ld. CIT(A) dismissed the appeal of the assessee by reproducing the assessment order in the appellate order without adjudicating the issue on merits. Under these circumstances, we set aside the order of the ld. CIT(A) and remit the matter back to the file of the Assessing Officer to decide the matter afresh by affording reasonable opportunities of being heard to the assessee. Once the appeal filed by the assessee has been remitted back to the file of the Assessing Officer for fresh adjudication. Appeal of assessee is allowed for statistical purposes.

Summary

Issues:
Challenging exparte orders of authorities below, reopening of assessment under section 147 of the Act, lack of opportunities to present the case before authorities, dismissal of appeal by CIT(A) without adjudicating on merits.

Analysis:
The appeal before the Tribunal was against the order of the ld. Commissioner of Income Tax (Appeals) for the assessment year 2011-12, where the assessee challenged both the issues on merits and the exparte orders of authorities below. The case involved the assessee not filing the return of income for the relevant year and receiving accommodation entries from a bogus company managed by an individual engaged in providing illegal accommodation entries. The Assessing Officer issued a notice under section 148 of the Act for reopening the assessment, leading to the assessment of the total income of the assessee at a specific amount. The assessee contended that there was a lack of sufficient time to present the case before the authorities, resulting in exparte orders being passed without adequate opportunities for being heard.

The Tribunal noted that the show cause notice for hearing was received by the assessee just three days before the scheduled date, indicating insufficient time provided by the Assessing Officer to present the case. The assessee challenged the legal issue of reopening the assessment and criticized the CIT(A) for not adjudicating on the merits of the case. Consequently, the Tribunal set aside the order of the CIT(A) and remitted the matter back to the Assessing Officer for fresh adjudication with reasonable opportunities for the assessee to be heard.

As the appeal was remitted back to the Assessing Officer for fresh adjudication, a stay petition filed by the assessee was deemed to have no locus standi and was dismissed accordingly. Ultimately, the stay petition was dismissed, while the appeal was allowed for statistical purposes. The Tribunal's decision was pronounced on January 31, 2020, in Chennai.