2018 (10) TMI 718 - AT - Income Tax

Best Judgement assessment u/s 144 - unexplained cash deposit - unsecured loans - Admission of additional evidences - Held that - there have been number of occasions wherein the hearing have been scheduled by the Assessing Officer, however, there has been no compliance on the part of the assessee and the Assessing Officer has proceeded and passed the order u/s 144 of the Act. Assessing Officer has not objected to the admission to the additional evidences and has in fact gone ahead and examined those additional evidences and found the transaction undertaken by the assessee verifiable. In such circumstances whether the Revenue has not objected to the admission of the additional evidences, it would have been better had ld. CIT(A) given his finding on merit rather than rejecting the additional evidences on technicality. Matter remanded back to CIT(A)

Summary

Issues involved:
1. Jurisdictional validity of order u/s 144
2. Adequate opportunity provided for assessment u/s 144
3. Admission of additional evidences by ld. CIT(A)
4. Disallowance of expenses
5. Disallowance of brought forward losses
6. Charging and withdrawal of interest u/s 234A, 234B, 234C & 234D

Analysis:

Issue 1: Jurisdictional validity of order u/s 144
The appellant challenged the order u/s 144 for Assessment Year 2014-15. The tribunal found that the Assessing Officer issued notices and provided opportunities for compliance. Despite multiple scheduled hearings, the appellant failed to comply, leading to the order being passed u/s 144. The tribunal dismissed Ground No. 2 due to lack of compliance by the appellant.

Issue 2: Adequate opportunity provided for assessment u/s 144
The tribunal examined the records and noted that the Assessing Officer had issued necessary notices and opportunities for the appellant to furnish required information. However, the appellant failed to comply, leading to the order u/s 144. Consequently, the tribunal upheld the validity of the assessment under section 144.

Issue 3: Admission of additional evidences by ld. CIT(A)
The appellant contested the ld. CIT(A)'s decision not to admit additional evidences, including books of accounts, during the appellate proceedings. The tribunal reviewed a remand report from the AO, which verified the additional evidence submitted by the appellant. Despite the AO's verification, the ld. CIT(A) did not address the remand report findings. The tribunal remanded the matter to the ld. CIT(A) for a fresh decision based on the additional evidences and the remand report.

Issue 4: Disallowance of expenses
The ld. CIT(A) confirmed the disallowance of certain expenses totaling &8377; 11,02,693. The AO had disallowed 30% of these expenses, but the remand report suggested a 20% disallowance. The tribunal noted discrepancies in the vouching of expenses and directed the ld. CIT(A) to reconsider the disallowance after examining the additional evidences submitted by the appellant.

Issue 5: Disallowance of brought forward losses
The ld. CIT(A) upheld the disallowance of brought forward losses, leading to a dispute over the amount disallowed. The tribunal observed discrepancies in the allowed amount and directed the ld. CIT(A) to review the disallowance in light of the remand report and additional evidences.

Issue 6: Charging and withdrawal of interest u/s 234A, 234B, 234C & 234D
Given the remand of various issues to the ld. CIT(A), the tribunal set aside the grounds related to the levy of interest u/s 234A, 234B, 234C & 234D for the ld. CIT(A) to reconsider along with the other remanded matters.

In conclusion, the tribunal partly allowed the appeal for statistical purposes and remanded several issues back to the ld. CIT(A) for fresh consideration based on the additional evidences and the remand report.