2018 (5) TMI 1264 - AT - Income Tax

Revision u/s 263 - not giving the assessee proper and sufficient opportunity of being heard - denial of natural justice - Held that - The assessing officer has not given adequate opportunity to the assessee and has passed an order u/s 144 without adequate enquiry. The directions given by the CIT in the Sec 263 order have not been followed by the AO. The Ld. CIT(A) has passed an ex parte order and has not dealt with the issue on merit. We set aside this assessment to the file of the assessing officer for fresh adjudication, with the direction that an adequate opportunity should be provided to the assessee and that the direction given by the Ld. CIT in the order passed u/s 263 be followed. The assessee is directed to appear before the assessing officer within 30 days of receipt of this order take notice and thereafter cooperate in completion of the assessment. See M/S. SRIRAM TIE UP PVT. LTD. VERSUS ITO 2018 (3) TMI 1403 - ITAT KOLKATA - Decided in favour of assessee for statistical purposes.

Summary

Issues:
Appeal against order of Commissioner of Income Tax (Appeals); Assessment order passed under section 144 without adequate opportunity; Non-compliance with directions in order passed under section 263; Ex parte order by Commissioner of Income Tax (Appeals); Setting aside assessment for fresh adjudication.

Analysis:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) passed under sections 144/263/147/143(3) of the Income Tax Act, 1961. The counsel for the assessee argued that the assessment order was passed under section 144 without providing adequate opportunity, and the Commissioner of Income Tax (Appeals) had passed an ex parte order without addressing the issue on merit. It was contended that the Assessing Officer (AO) did not follow the specific directions given by the CIT in the order passed under section 263. Similar cases cited before the Tribunal highlighted the need for a fair opportunity for the assessee in the assessment process.

The Tribunal noted that the AO had not given adequate opportunity to the assessee and passed the order under section 144 without proper enquiry. The directions given by the CIT in the section 263 order were not followed. The Tribunal referred to previous cases where similar issues were remanded back to the AO for fresh adjudication due to lack of proper opportunity for the assessee. The Tribunal emphasized the importance of following guidelines for conducting deep investigations as directed by the CIT to uncover the source of funds.

The Tribunal highlighted the need for fair opportunity for the assessee in the assessment process, as lack of opportunity could lead to a fresh assessment. Citing relevant case laws and the decision of the Hon'ble Supreme Court, the Tribunal set aside the assessment and directed the assessee to cooperate with the assessing officer for completion of the assessment within a specified timeframe. The order was pronounced in favor of the assessee for statistical purposes, in line with the consistent view taken by the Kolkata Bench of the ITAT in similar cases.

In conclusion, the Tribunal allowed the appeal, setting aside the assessment for fresh adjudication with a directive for providing adequate opportunity to the assessee and ensuring compliance with the directions given by the CIT in the order passed under section 263. The decision aimed at upholding the principles of natural justice and fair assessment procedures in accordance with the law.