2018 (3) TMI 1581 - AT - Income Tax

Reopening of assessment - addition on account of un-explained cash credit u/s 68 - Held that - We observe that the assessee has filed a paper book which has not been certified by the appellant or any other authorized persons. CIT(A) has decided the issue on the basis of documents filed before him. There is no clear from the order of the ld. CIT(A) that what type of documents were submitted before him by the assessee and on those documents whether the ld. CIT has conducted any enquiry or not . The Remand report were also not called from the Assessing officer where as the assessee has filed additional evidence under Rule 46A which has been accepted by him without conducting any further enquiry. In these circumstances , we think it appropriate in the interest of natural justice to restore the matter back to the file of ld. CIT(A) for deciding the appeal afresh

Summary

Issues:
1. Addition of unexplained cash credit
2. Verification of facts by assessing officer
3. Opportunity for rebuttal under Rule 46A
4. Calling for Remand report from assessing officer
5. Adjudication process and natural justice

Analysis:

1. Addition of unexplained cash credit:
The appeal involved the addition of ?95,00,000 as unexplained cash credit by the Assessing Officer (AO). The revenue contended that the ld. CIT(A) erred in deleting the addition without considering findings from previous cases. The Hon'ble Delhi High Court's stance on the onus of proving identity, creditworthiness, and genuineness of transactions was emphasized. The revenue challenged the CIT(A)'s decision based on lack of verification of facts and non-compliance by the assessee with statutory notices.

2. Verification of facts by assessing officer:
The revenue argued that the CIT(A) did not verify the facts adequately and accepted additional evidence without calling for a Remand report from the assessing officer. The assessment was completed ex-parte under section 144 of the Income Tax Act, and the revenue sought a fresh adjudication with due opportunity for the assessing officer.

3. Opportunity for rebuttal under Rule 46A:
The issue of 'mistaken identity' was raised, with the revenue contending that the CIT(A) erred in not providing an opportunity for the AO to rebut the claim of the assessee under Rule 46A. The lack of opportunity for the AO to present counterarguments was highlighted as a procedural flaw.

4. Calling for Remand report from assessing officer:
The revenue emphasized the necessity of calling for a Remand report from the assessing officer before accepting additional evidence submitted by the assessee. The absence of this procedural step was considered a violation of natural justice and due process.

5. Adjudication process and natural justice:
In the interest of natural justice, the ITAT decided to restore the matter back to the CIT(A) for a fresh adjudication. The ITAT directed the assessee to cooperate and not seek unnecessary adjournments during the appeal process. The appeal of the revenue was allowed for statistical purposes, emphasizing the importance of following due process and providing fair opportunities for all parties involved.

This comprehensive analysis of the judgment highlights the key issues raised, arguments presented, and the ITAT's decision to ensure procedural fairness and adherence to legal principles in the adjudication process.