2019 (4) TMI 1290 - AT - Income Tax

Best judgment assessment u/s 144 - addition u/s 69A - cash deposited in accounts - admission of additional evidences - non service of notices - HELD THAT - Whereas the assessee is represented by the legal heir and is ready to substantiate and explain cash deposits made in the bank account. We, considering the facts and circumstances and illness of the assessee, are of the opinion that is a fit case to restore to the file of the AO to meet the ends of justice. We restore the entire disputed issue along with evidences filed to the file of the AO to adjudicate afresh and consider the material filed by the assessee and further the assessee should be provided with adequate opportunity of hearing and pass a speaking order and we order accordingly. Assessee s appeal is allowed for statistical purposes.

Issues:
Appeal against CIT(A) order under sections 144, 154, and 250 of the Income-tax Act, 1961.

Analysis:

1. Grounds of Appeal:
The appellant raised multiple grounds of appeal against the CIT(A)'s order, including the failure to appreciate the appellant's inability to appear due to illness, not disposing of the appeal on merits, and not considering additional evidence. The appellant also contested the best judgment assessment made by the AO under section 144 of the Act.

2. Factual Background:
The appellant filed the income tax return, which was processed under section 143(1) of the Act. Subsequently, notices were sent for assessment, but due to various reasons, the appellant could not respond adequately. The AO proceeded with a best judgment assessment under section 144 based on information regarding cash deposits in the bank account.

3. Rectification under Section 154:
The assessment order was rectified under section 154 to disallow a claim under Chapter VIA of the Act. This rectification was a part of the overall assessment process.

4. CIT(A) Decision:
The CIT(A) upheld the AO's best judgment assessment, citing the appellant's failure to comply with directions during assessment proceedings. The CIT(A) did not admit additional information submitted during the appellate proceedings and dismissed the appeal.

5. Tribunal Appeal:
The appellant appealed to the Tribunal, submitting written arguments, bank statements, and medical certificates to support their case. The appellant requested an opportunity to provide clarifications and additional information before the assessing authority.

6. Tribunal Decision:
After hearing both parties, the Tribunal observed that the AO's assessment was based on best judgment due to the lack of evidence provided by the appellant. Considering the appellant's illness and the evidence presented, the Tribunal decided to remand the issue back to the AO for fresh adjudication. The AO was directed to consider the material filed by the appellant and provide a fair opportunity for hearing.

7. Outcome:
The Tribunal allowed the appeal for statistical purposes, indicating that the issue would be reconsidered by the AO in light of the new evidence and circumstances. The order was pronounced in open court on a specified date.

This detailed analysis covers the grounds of appeal, factual background, decisions by the CIT(A) and Tribunal, and the final outcome of the case, providing a comprehensive understanding of the legal judgment.

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