9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (3) TMI 277 - AT - Income TaxRejection of books of accounts - denial of natural justice - Held that - In view of the cryptic findings returned by the Assessing Officer rejecting the books of accounts and finding returned by Ld. CIT(A) referred to above, we are of the considered view that the opportunity of being heard has not been granted to the assessee by the Assessing Officer before rejecting the books of accounts. Even otherwise, the bills submitted by the assessee during assessment proceedings have been declared as bogus without calling the parties who have issued the bills in question. Moreover, the Assessing Officer at the one hand has accepted the P & L account statement and on the other hand, he has rejected the books of accounts of the assessee. So, we are of the considered view that Ld. CIT(A) has erred in quashing the action taken by the Assessing Officer to invoke provisions contained u/s 145(2) of the Act without taking into account the admitted fact that the Assessing Officer has not provided sufficient opportunity of being heard to the assessee rather rejected the books of accounts arbitrarily and declared the bills filed by the assessee as bogus unilaterally. So, the impugned order passed by Ld. CIT(A) is not sustainable in the eyes of law and without entering into the merits of the case, the file is ordered to be restored to the Assessing Officer to decide afresh after providing opportunity of being heard to the assessee.
Issues involved:
1. Quashing of invoking section 145 of the I.T. Act and appeal under section 44AD. 2. Restriction of disallowance u/s 14A. 3. Rejection of bills of suppliers. Analysis: Issue 1: Quashing of invoking section 145 of the I.T. Act and appeal under section 44AD: The appellant, DCIT, challenged the order passed by Ld. CIT(A) XI, seeking to set aside the impugned order dated 25.11.2011. The appellant contended that Ld. CIT(A) erred in quashing the invoking of section 145 of the I.T. Act and allowing the appeal of the assessee with regard to section 44AD. The Assessing Officer rejected bills submitted by the assessee under various heads due to lack of payment mode details, absence of stamp, and discrepancies in amounts. The Assessing Officer also rejected the books of accounts and estimated gross profit at 8% under section 44AD. The Tribunal found that the Assessing Officer did not provide sufficient opportunity for the assessee to be heard before rejecting the books of accounts and declaring bills as bogus. The Tribunal concluded that the action taken by the Assessing Officer was arbitrary, and the order passed by Ld. CIT(A) was not sustainable. The case was ordered to be restored to the Assessing Officer for a fresh decision after providing a fair opportunity of being heard to the assessee. Issue 2: Restriction of disallowance u/s 14A: The Assessing Officer disallowed dividend income of &8377; 73,850 under section 14A, stating it does not form part of the total income. Ld. CIT(A) restricted the disallowance from &8377; 1,22,956 to &8377; 73,850. The Revenue contended that the disallowance was rightly made by the Assessing Officer, while the appellant argued that relevant bills were produced, but arbitrarily rejected. Ld. CIT(A) observed that sufficient opportunity was not given to the appellant before invoking section 145 of the Act. The Tribunal held that the rejection of bills without proper hearing and the discrepancies in the assessment process rendered the order unsustainable in law. Issue 3: Rejection of bills of suppliers: The Assessing Officer rejected bills of suppliers, including sub-contractor bills, on grounds of being in rough form and not appearing genuine. The appellant argued that bills were genuine and related to advance payments, hence lacking cheque numbers. The Tribunal noted that the rejection of bills without proper verification and lack of opportunity for the appellant to present their case rendered the Assessing Officer's actions arbitrary and unsustainable. The case was remanded for a fresh decision with proper opportunity for the assessee to be heard. In conclusion, the Tribunal found that the Assessing Officer's actions lacked proper reasoning and opportunity for the assessee to be heard, leading to arbitrary rejections and disallowances. The order passed by Ld. CIT(A) was deemed unsustainable, and the case was remanded for a fresh decision ensuring principles of natural justice and fair opportunity for the appellant.
|
