2019 (12) TMI 147 - AT - Income Tax

Assessment ex parte u/s 144 - grievance of the assessee is that due to reasons beyond the control the assessee could not furnish the necessary documentary evidences before the AO - HELD THAT - We have given a thoughtful consideration to the rival contentions and have carefully perused the application made under Rule 29 of the ITAT Rules. The undisputed fact is that the discretion lies with the Tribunal to admit additional evidence in the interest of justice. It is also not in dispute that Rule 29 of the ITAT Rules is aking to order 41 Rule 27(1) of the CPC. Our view is fortified by the decision of the Hon ble High Court of Delhi in the case of CIT vs. Text Hundred India Pvt. Limited 2013 (6) TMI 72 - DELHI HIGH COURT . As mentioned elsewhere with the demise of the Counsel of the assessee the assessee could not be represented properly either before the AO or before the CIT(A). In the interest of justice, the additional evidences are admitted. The additional evidences contained documents establishing that the appellant is only an agent of Allana Group. In our considered opinion, these documents need thorough investigation/verification at the assessment stage. We, accordingly, restore the entire issues to the files of the AO. The assessee directed to furnish all these evidences before the AO and the AO is directed to examine the same and decide the issues afresh, after affording reasonable and fair opportunity of being heard to the assessee.

Summary

Issues:
1. Appeal by Revenue against order of Ld. CIT (Appeals) reducing gross profit rate, disallowance of expenses, unloading charges, and salary expenses.
2. Admissibility of additional evidence in assessee's appeal due to unforeseen circumstances leading to lack of representation before authorities.

Issue 1: Appeal by Revenue
The Revenue appealed against the Ld. CIT (Appeals) order reducing various aspects like gross profit rate, expenses, unloading charges, and salary expenses for AY 2011-12. The ITAT Delhi dismissed the Revenue's appeal citing the monetary limit for filing appeals set by the CBDT Circular No.17/2019. The Tribunal referred to a Supreme Court judgment where an appeal was dismissed due to the tax amount being below a certain limit. The Revenue was given the option to approach the Tribunal if the tax effect exceeded the limit or fell under exceptions specified in the Circular.

Issue 2: Admissibility of Additional Evidence
The assessee filed an appeal stating that due to unforeseen circumstances, they couldn't provide necessary documents before the AO, resulting in an ex parte assessment under section 144 of the Act. The Tribunal considered an application under Rule 29 of the ITAT Rules for admission of additional evidence. The Tribunal had the discretion to admit additional evidence in the interest of justice, as per relevant legal provisions and precedents. The Tribunal referred to a High Court case emphasizing the importance of admitting additional evidence for substantial justice. The Tribunal admitted the additional evidence, considering the circumstances leading to lack of representation before authorities. The additional evidence established the appellant as an agent of Allana Group, requiring further investigation by the AO. Consequently, the Tribunal directed the AO to reexamine the issues based on the additional evidence provided by the assessee.

This detailed analysis of the legal judgment covers the issues raised in the appeals by both the Revenue and the Assessee, providing a comprehensive understanding of the ITAT Delhi's decision and the legal principles applied in each case.