2018 (1) TMI 445 - AT - Income Tax

Unexplained investment u/s 69 - Held that - As before us, the assessee filed additional evidence which could not be filed before CIT (Appeal) within the specified time. The assessee has also filed an affidavit stating that the assessee could not attend the office of the Ld. Commissioner of Income Tax (Appeal) under the bona fide reasons/compelling circumstances as has been narrated in the said affidavit. Considering the aforesaid order of the Tribunal and the reasons explained before us/stated in the affidavit, we are of the view that even as per Article 265 of the Constitution of India, only due taxes has to be levied/collected. Even otherwise, no persons should be condemned unheard, thus, considering the principle of natural justice and the material facts available on record, in all fairness, we deem it appropriate to remand these files to the file of the First Appellate Authority to adjudicate the same afresh on merit. The assessee be given opportunity of being heard with further liberty to furnish evidence in support of his claim. The assessee is also directed to remain careful and to furnish the necessary evidence before the Ld. Commissioner of Income Tax (Appeal), thus, the appeals of the assessee are allowed for statistical purposes only.

Summary

Issues:
- Additional evidence filed by the assessee before the First Appellate Authority.
- Correctness of the assessment order made under section 143(3) read with section 153A of the Income Tax Act.
- Applicability of section 153A of the Act in the absence of incriminating material.
- Allegation of exparte adjudication by the CIT (A) violating principles of natural justice.
- Merits of the assessment order and additions made therein.

Additional Evidence Filed by the Assessee:
The assessee filed additional evidence during the hearing before the Appellate Tribunal, which could not be submitted before the First Appellate Authority due to insufficient opportunity. The Tribunal noted the reasons for the delay in filing the evidence and decided to remand the case back to the First Appellate Authority for fresh adjudication, emphasizing the importance of natural justice and providing the assessee with an opportunity to be heard.

Correctness of Assessment Order under Section 143(3) read with Section 153A:
The assessment order under section 143(3) read with section 153A of the Income Tax Act was challenged by the assessee on various grounds, including the correctness of the assessment order and the applicability of section 153A in the absence of incriminating material. The Tribunal found that the assessment was made without any incriminating material supporting the increased total income declared by the assessee, leading to the decision to remand the case for fresh adjudication by the CIT (A) after providing the assessee with a reasonable opportunity to be heard.

Allegation of Exparte Adjudication and Violation of Natural Justice:
The assessee alleged that the adjudication by the CIT (A) was done exparte, thereby violating the principles of natural justice. The Tribunal acknowledged this allegation and decided to remand the case back to the CIT (A) for fresh adjudication, emphasizing the importance of providing the assessee with a fair opportunity to present their case.

Merits of the Assessment Order and Additions Made Therein:
The Tribunal examined the merits of the assessment order and the additions made by the Assessing Officer, particularly regarding the treatment of short-term capital gains as business income and the denial of certain deductions. The Tribunal found that the Assessing Officer did not have sufficient evidence or incriminating material to support the additions made, leading to the decision to remand the case for fresh adjudication by the CIT (A) with proper representation from the assessee.

Conclusion:
The Appellate Tribunal allowed the appeals of the assessee for statistical purposes, remanding the cases back to the First Appellate Authority for fresh adjudication while emphasizing the principles of natural justice and the importance of providing the assessee with a fair opportunity to present their case.