2022 (11) TMI 1331 - AT - Income Tax

CIT-A disposing-of the appeal Ex- Parte - CIT(A) dismissed the appeal just on the ground that in Form No.35, the section of assessment order mentioned is 144 instead of 143(3) - In his opinion of Ld. CIT(A) this is an incurable defect - HELD THAT - CIT(A) has not specified under which law, it is an incurable defect. On query in this regard, DR has shown his inability to refer to any laws in this regard. Be as it may in our considered opinion, when interest of substantial justice is pitted against technicalities, it is always justice that prevails. Accordingly, we remit this issue to the file of the CIT(A) to consider the issue and pass an order on the merits of this case after giving assessee the proper and requisite opportunity Assessee has also undertaken to cooperate with the CIT(A). Appeal stands allowed for statistical purposes.

Summary

Issues involved:
Appeal against order of Ld. CIT(A) regarding Assessment Year 2015-16 - Dismissal of appeal by Ld. CIT(A) based on a technical defect in Form No.35 mentioning the section of assessment order as 144 instead of 143(3) - Legality of additions made by Assessing Officer - Adhoc additions without adverse findings - Impugned action of making additions under section 68 - Double additions of the same amount under section 68 - Levying of interest under section 234B without proper direction or discussion.

Analysis:
The appeal was filed by the assessee against the order of the Ld. CIT(A) for the Assessment Year 2015-16. The Ld. CIT(A) dismissed the appeal due to a technical defect in Form No.35 where the section of the assessment order was mentioned as 144 instead of 143(3). The Ld. CIT(A) considered this defect as incurable, although no specific law was cited to support this stance. The Tribunal, however, emphasized the importance of substantial justice over technicalities. They remitted the issue back to the Ld. CIT(A) for a proper consideration on its merits after providing the assessee with a fair opportunity to present their case. The Tribunal highlighted the need for justice to prevail in such situations, indicating a preference for a thorough examination of the case rather than dismissing it on a technicality.

Regarding the additions made by the Assessing Officer, it was noted that the additions of Rs. 14,468,220 were made in a mechanical and arbitrary manner without sufficient basis. The Tribunal found these additions to be unlawful, imaginary, and lacking any concrete foundation. The Tribunal pointed out that the observations made by the Assessing Officer were either incorrect, irrelevant, or untenable, and did not apply to the case at hand. The Tribunal deemed the impugned order to be unjustified and in need of quashing, emphasizing the importance of following legal principles and providing valid justifications for any additions made during assessments.

Furthermore, the Tribunal addressed the issue of adhoc additions of Rs. 445,820 made by the Assessing Officer without any adverse findings or pointing out discrepancies. These additions were considered to lack a legal basis and were deemed unwarranted, leading the Tribunal to order their deletion. The Tribunal also scrutinized the impugned action of the Assessing Officer in making additions under section 68, amounting to Rs. 14,468,220, which were viewed as arbitrary, unlawful, and against established legal principles. The Tribunal highlighted that the onus placed on the assessee under section 68 had been discharged, and the additions were unjustified and required deletion.

Moreover, the Tribunal addressed the issue of double additions of the same amount under section 68, where Rs. 3,543,185 was added both in the individual name of the proprietor and in the name of the proprietorship firm. This action was considered arbitrary, incorrect, and unlawful, leading the Tribunal to order the deletion of these double additions. Additionally, the Tribunal found the levying of interest under section 234B to be unwarranted, as it was imposed without proper direction, discussion, or justification based on the facts and circumstances of the case. The Tribunal deemed this interest levy as liable to be omitted, emphasizing the necessity for proper legal procedures and justifications in such matters.

In conclusion, the Tribunal allowed the appeal for statistical purposes, indicating a favorable outcome for the assessee in light of the issues raised and the deficiencies found in the assessment and appeal process.