2017 (2) TMI 25 - AT - Income Tax

Ex-parte assessment u/s 147 - rejection of objections raised by the assessee - Additions on the basis of A/c Statement received from the Bank - Right to be heard - denial of principle of natural justice - non speaking order - Held that - The mere fact that written submissions were filed by the assessee, it is of the view cannot be so construed that the right to be heard was given up. Thus taking note of the fact that although more than sufficient opportunity has been provided to the assessee during the remand proceedings and the appellate proceedings, it is find one more opportunity on facts ought to have been provided as in the eventuality the written submissions were considered to be not sufficient to support the claim, an opportunity of being heard as per law ought to have been given. Thus in the face of the fact that the grievance of the assessee still persists the impugned order is set aside to the file fo the Ld.CIT(A) directing the said authority to pass a speaking order in accordance with law after giving the assessee a reasonable opportunity of being heard.

Summary

Issues:
Appeal against addition of ?26,57,533 made by Assessing Officer and sustained by CIT(A) - Failure to comply with notices - Addition based on cash deposit in bank account - Assessee's claim of profit on gross receipts - Assessing Officer's requirement for books of accounts - Assessee's casual attitude towards proceedings - Multiple bank accounts maintained by assessee - Lack of evidence of trading activity - Cash deposit in ICICI Bank unexplained - Written submissions not fully considered by CIT(A) - Request for setting aside impugned order for fresh consideration.

Analysis:
The appeal was filed by the assessee challenging the addition of ?26,57,533 made by the Assessing Officer and upheld by the CIT(A). The assessee failed to comply with notices and explain the cash deposit in the bank account, leading to the issuance of notice under section 148. Despite opportunities, the assessee did not provide necessary information or comply with requests for documents. The CIT(A) noted that the assessee declared a profit on gross receipts but failed to substantiate the claim during assessment proceedings. The CIT(A) found the assessee's behavior casual and lacking in proper engagement with the process.

The Assessing Officer required the assessee to produce books of accounts and supporting documents during the remand proceedings. However, the assessee repeatedly sought adjournments and failed to provide adequate evidence to support the claim of profit. The CIT(A) observed that the assessee maintained multiple bank accounts, with no mention of business activities in Mumbai where the cash deposit was made. The CIT(A) concluded that the claim was not allowable due to lack of evidence and inconsistent financial activities.

The Ld.Sr.DR supported the addition and argued for its confirmation. However, it was noted that the written submissions filed by the assessee were not fully addressed by the CIT(A). The Tribunal found that the right to be heard was not adequately provided to the assessee, and thus set aside the impugned order for reconsideration by the CIT(A). The Tribunal directed the CIT(A) to pass a speaking order after giving the assessee a reasonable opportunity to be heard and comply with the proceedings.

In conclusion, the appeal of the assessee was allowed for statistical purposes, and the adjournment petition was rejected. The Tribunal emphasized the importance of fair and full compliance by the assessee during the reconsideration process by the CIT(A). The order was pronounced on 6th January 2017.