2016 (5) TMI 1570 - AT - Income Tax

Validity of assessment u/s 144 - assessee taken a ground that AO erred in passing the ex parte order without giving any sufficient opportunity to the assessee and wherein no notice u/s 144 or any show cause notice was served to the assessee before making such a huge addition - HELD THAT - We find that ld. CIT(A) has confirmed all the additions except allowing deduction u/s 80C relying on the remand report of AO. However ld. counsel submits that facts needs to be remarshalled as assessee did not get sufficient opportunity to plead his case. Considering the entirety of facts after going through the order of ld. CIT(A) in order to impart substantial justice to assessee we restore the matter to the file of AO to pass the assessment order de novo after providing reasonable opportunity of being heard. We order accordingly.

Summary

Issues:
- Assessee's appeals against separate orders of ld. CIT(A) for AY 2006-07, 2007-08, and 2008-09
- Passing of ex parte assessment order by AO without sufficient opportunity to the assessee
- Consideration of factual details and deductions by lower revenue authorities
- Restoration of the matter to the file of AO for de novo assessment in all three AYs

Analysis:

Issue 1: Assessee's appeals against separate orders of ld. CIT(A)
The judgment pertains to the assessee's appeals challenging the orders of the ld. CIT(A) for AY 2006-07, 2007-08, and 2008-09. The appeals were heard together due to identical grounds and were disposed of by a composite order for convenience.

Issue 2: Passing of ex parte assessment order by AO
Following a search in the Aerens Group, search operations were conducted on the assessee under section 132 of the Income-tax Act, resulting in the filing of a return declaring income. The AO, noting non-compliance with notices and summons, passed an ex parte assessment order under section 144, determining the total income. The assessee contended before the ld. CIT(A) that the AO erred in passing the ex parte order without adequate opportunity, which was rejected based on the AO's justification.

Issue 3: Consideration of factual details and deductions
The assessee raised concerns about incorrect year additions and unconsidered payment details to a specific entity. The counsel emphasized the need for a reevaluation of facts as the assessment was made under section 144. The ITAT, after considering submissions, found that the ld. CIT(A) confirmed additions except for a deduction under section 80C. To ensure substantial justice, the matter was remanded to the AO for a de novo assessment after providing a reasonable opportunity for the assessee to be heard.

Issue 4: Restoration of the matter for de novo assessment
Given the identical nature of the facts for AY 2007-08 and 2008-09, the ITAT ordered the restoration of the matter to the AO for de novo assessment, mirroring the decision for AY 2006-07. Consequently, all three appeals by the assessee were allowed for statistical purposes.

This detailed analysis showcases the key issues addressed in the judgment, highlighting the legal proceedings and the ultimate decision rendered by the ITAT Delhi.