2024 (3) TMI 1321 - AT - Income Tax

Addition invoking provisions 56(2)(7a) - CIT(A) dismissed assessee appeal - application for admission of additional evidence was also submitted by the assessee - HELD THAT - In the present case, since the issues raised by the assessee before the CIT(A) have been decided on merits after considering and deliberating upon the facts of the case. On perusal of the order of CIT(A) it is observed that proper working of the addition u/s 56(2)(viia) were drawn and correct figures of the additions were arrived at. Since such calculations have not been dislodged by the assessee before the revenue authorities, we do not find any infirmity in the order of Ld. CIT(A). However, since there were certain additional information submitted by the assessee which could not be submitted before the revenue authorities for the reasons refer to in the application of admission of additional evidence, therefore, in the interest of justice the matter requires to be restored back to the files of Ld. CIT(A) for fresh adjudication. CIT(A) has passed an ex-parte order - As reasonable opportunity of being heard against the principle of natural justice since no explanations or evidence that opportunities were not granted to the assessee by Ld. CIT(A) have been brought on record or to our attention by the assessee neither such contentions are emerging from the impugned order of Ld. CIT(A) therefore such contentions raised in ground. No. 1 are unsustainable, thus, are rejected.he assessee by Ld. CIT(A) have been brought on record or to our attention by the assessee neither such contentions are emerging from the impugned order of Ld. CIT(A) therefore such contentions raised in ground. No. 1 are unsustainable, thus, are rejected. Thus the present appeal is restored to the file of the CIT(Appeals) with a direction to re- adjudicate the same after taking cognizance of the additional documentary evidence in the course of the proceedings before us. Assessee appeal allowed for statistical purposes.

Summary

Issues Involved:
1. Legality of the ex-parte appellate order passed by the CIT(A) u/s 250 of the Income Tax Act, 1961.
2. Confirmation of addition of Rs. 5,16,16,970/- by the AO invoking provisions of section 56(2)(viia) of the Act.
3. Admission of additional evidence by the assessee.

Summary of Judgment:

Issue 1: Legality of the Ex-Parte Appellate Order
The assessee contended that the ex-parte appellate order passed by the CIT(A) u/s 250 of the Income Tax Act, 1961, was unjustified, bad in law, and against the principles of natural justice. The Tribunal observed that the CIT(A) had provided several opportunities for the assessee to be heard, but the assessee failed to appear on multiple occasions. Consequently, the Tribunal found no merit in the contention that the order was passed without providing a reasonable opportunity of being heard. Thus, the ground raised by the assessee was rejected.

Issue 2: Confirmation of Addition of Rs. 5,16,16,970/-
The AO had made an addition of Rs. 5,16,16,970/- by invoking the provisions of section 56(2)(viia) of the Act, which was confirmed by the CIT(A). The Tribunal noted that the assessee had invested in shares at a face value lower than the fair market value, resulting in a profit. The CIT(A) had calculated the addition correctly, and since the assessee did not dislodge these calculations, the Tribunal found no infirmity in the order of the CIT(A). However, due to additional evidence submitted by the assessee, the Tribunal decided to restore the matter to the CIT(A) for fresh adjudication.

Issue 3: Admission of Additional Evidence
The assessee submitted an application for the admission of additional evidence, citing reasons for not being able to present these documents earlier. The Tribunal acknowledged the reasons provided and admitted the additional evidence. The Tribunal referred to a similar case in the assessee's own matter for AY 2012-13 & 2013-14, where the matter was set aside to the CIT(A) for fresh adjudication. Following this precedent, the Tribunal restored the present appeal to the CIT(A) for re-adjudication after considering the additional evidence.

Conclusion:
The Tribunal allowed the appeal for statistical purposes, directing the CIT(A) to re-adjudicate the matter after considering the additional documentary evidence. The CIT(A) is to afford a reasonable opportunity of being heard to the assessee during the set-aside proceedings. The order was pronounced in the open court on 07/03/2024.