2010 (10) TMI 1238 - AT - Income Tax

Summary

Issues involved: Denial of natural justice by Ld. Commissioner of Income Tax (Appeals) and non-admittance of submissions and evidences by the assessee under Rule 46A.

Summary:

Issue 1: Denial of natural justice
The appeal by the assessee was against the order of the Ld. Commissioner of Income Tax (Appeals) for assessment year 2005-06. The first issue raised was that the Ld. Commissioner of Income Tax (Appeals) did not provide the assessee with an opportunity to submit various documents and took the same view as the Assessing Officer, thus denying natural justice. It was argued that the Assessing Officer erred in law by rejecting statements and submissions, making untenable observations in the assessment order, and not properly appreciating documentary evidence.

Issue 2: Non-admittance of submissions and evidences under Rule 46A
The assessee declared an income of Rs. 1,45,517/- with the return filed on 30.3.2006. The Assessing Officer, due to non-compliance by the assessee, completed the assessment u/s 144(1) of the Income Tax Act, 1961 to the best of his judgment, determining the total income as Rs. 5,53,050/-. The assessee submitted under Rule 46A(1)(b) & (c) of the Income Tax Rules, 1962, requesting an opportunity for submission and production of books of account. However, the Ld. Commissioner of Income Tax (Appeals) confirmed the additions made by the Assessing Officer, stating that there was no basis for submission of fresh evidence under Rule 46A.

Judgment:
After considering the submissions, the Tribunal found that natural justice would be served by remitting the issue back to the Ld. Commissioner of Income Tax (Appeals) for reconsideration after admitting the submissions and evidences filed by the assessee. The Tribunal emphasized that the assessee should be given an adequate opportunity to be heard. Citing a precedent, the Tribunal highlighted that the Ld. Commissioner of Income Tax (Appeals) had no discretion to refuse to admit additional evidence after calling a remand report from the Assessing Officer. As the issue was remitted, the Tribunal did not decide on the merit of the case, and the appeal by the assessee was allowed for statistical purposes.