2018 (5) TMI 140 - AT - Income Tax

Reopening of assessment - notices were not received by the assessee which was the reason for non-appearance of the assessee before the Ld. CIT-A leading to dismissal of appeal ex-parte - Held that - Since there was no representation of the assessee before the learned CIT-A as there were a change in address of the assessee from M/s Purna Purshottam Export, 304, Veena Niketan, Vayuduta Complex, Opp, Blue & White MTNL Bldg., Devidas Lane, Borivali (W), Mumbai-400 092 to M/s. Purnapurshottam Exports, Gala no. 6A, Ground floor, Hi-tex Industrial Compound, Behind Petrol Pump, S.V. Road, Dahisar (E), Mumbai-400068 which could not be notified to the learned CIT(A) inadverantly as claimed by the assessee now , we in the interest of the substantial justice are of the considered view that the matter need to be set aside and restored to the file of learned CIT-A for fresh / de-novo adjudication of the issue on merits in accordance with law after giving proper and adequate opportunity of being heard to the assessee in accordance with principal of natural justice in accordance with law

Issues Involved:
1. Passing of ex-parte order by CIT(A).
2. Re-opening of assessment under Section 147/148.
3. Addition of ?1,57,77,971/- under Section 69C as unexplained expenditure.

Issue-wise Detailed Analysis:

1. Passing of Ex-parte Order by CIT(A):
The assessee contended that the CIT(A) erred in passing an order without providing sufficient opportunity of being heard. The CIT(A) dismissed the appeal ex-parte due to non-compliance by the assessee, despite multiple notices issued. The tribunal noted that the assessee's change of address was not communicated to the CIT(A), leading to non-receipt of notices and non-appearance. The tribunal decided to set aside the matter and restore it to the CIT(A) for fresh adjudication, emphasizing the need for proper and adequate opportunity of being heard in accordance with the principles of natural justice.

2. Re-opening of Assessment under Section 147/148:
The assessee challenged the validity of the re-opening of the assessment, arguing that the reasons to believe that income had escaped assessment were non-existent and based on presumption. The CIT(A) upheld the AO's decision to re-open the assessment, noting that the assessee did not object to the re-opening during the assessment proceedings and that the reasons for re-opening were communicated to the assessee. The tribunal did not comment on the merits of the re-opening but remanded the issue back to the CIT(A) for fresh consideration along with other issues.

3. Addition of ?1,57,77,971/- under Section 69C as Unexplained Expenditure:
The AO added ?1,57,77,971/- as unexplained expenditure under Section 69C, based on information from the DGIT(Inv.), Mumbai, indicating that the assessee had obtained accommodation entries from concerns associated with Shri Rajendra Jain, who admitted to issuing bogus bills without supplying any material. The assessee provided ledger accounts, bank statements, and sources of payments but failed to submit quantitative details, stock reconciliations, stock register, and proof of delivery of material. The CIT(A) upheld the AO's addition due to the absence of any written submission or evidence from the assessee to substantiate the genuineness of the transactions. The tribunal, considering the claim of change of address and non-receipt of notices, remanded the issue back to the CIT(A) for fresh adjudication, allowing the assessee to present its evidence and arguments.

Conclusion:
The tribunal set aside the CIT(A)'s ex-parte order and remanded the case for fresh adjudication on all issues, ensuring that the assessee is given a proper opportunity to present its case. The tribunal emphasized adherence to the principles of natural justice and did not comment on the merits of the case, leaving all issues open for re-examination by the CIT(A).

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