2020 (6) TMI 665 - AT - Income Tax

Validity of reopening of assessment - Non appearance by assessee - non-disclosure of profit on transactions at National Stock Exchange platform carried out by the assessee - Four Notices were issued by the AO but Assessee did not reply - important fact that was placed before the ld. CIT (Appeals) was that there was a fire on 9.11.2017 at the principal place of business of the assessee - HELD THAT - We find that naturally if there is a fire then subsequent non-compliance within a short span of one month may be due to sufficient cause - non-compliance prior to that cannot be accepted in the civilized society. CIT (Appeals) has also not dealt with the issue on the merits of the case, but has merely brushed aside the arguments of the assessee and upheld the order of the AO - assessee could not get proper opportunity of explaining transactions before the lower authorities. We have given an offer to the AR to explain the transaction before the lower authorities by placing the accounts of the broker, the bank statement etc. with which he readily agreed. The purpose of making the assessment would be met if complete details are filed by the assessee before the Assessing Officer. Assessee has not co-operated before the lower authorities, precisely the Assessing Officer, we direct the assessee to deposit as a contribution ₹ 5,000/- to the Prime Ministers National Relief Fund as the public money is involved in the efforts of AO and same is wasted by non-compliance of the assessee. The learned Authorized Representative also agreed to that. There was no objection from the learned Departmental Representative, if the issue is set aside to the file of the Assessing Officer. In view of this, we direct the assessee to make the contribution as directed above on or before 30th June, 2020 and on or after 16th August, 2020 appear before AO with relevant information. - Appeal of the assessee is allowed, for statistical purposes.

Summary

Issues involved:
1. Re-opening of assessment order
2. Improper sanction
3. Addition on the merits of the case

Re-opening of assessment order:
The appeal was filed against the Commissioner of Income Tax (Appeals)'s order dismissing the assessee's appeal. The Assessing Officer re-opened the assessment order due to the assessee's non-disclosure of profit on transactions at the National Stock Exchange platform. The assessee failed to respond to multiple notices issued by the Assessing Officer. However, the assessee presented evidence of a fire at their principal place of business, which hindered their compliance. The Appellate Tribunal found that non-compliance after the fire could be due to sufficient cause, but prior non-compliance was not acceptable. The Tribunal directed the assessee to deposit a contribution to the Prime Minister's National Relief Fund due to wasted public money and lack of cooperation with the Assessing Officer. The appeal was restored back to the Assessing Officer for reconsideration.

Improper sanction:
The grievance of the assessee included challenges against the re-opening of the assessment order and improper sanction. The Assessing Officer issued multiple notices to the assessee, who did not respond adequately. The Appellate Tribunal acknowledged the fire incident as a valid reason for non-compliance post-fire but stressed the importance of cooperation in civilized society. The Tribunal directed the assessee to make a contribution to the Prime Minister's National Relief Fund and cooperate with the Assessing Officer moving forward.

Addition on the merits of the case:
The Assessing Officer made additions to the assessee's income based on the short-term capital gain from the sale of shares and capital investment. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's order, refusing to admit additional evidence and dismissing the appeal. The Appellate Tribunal found that the assessee did not receive a proper opportunity to explain transactions before the lower authorities. The Tribunal directed the assessee to deposit a contribution to the Prime Minister's National Relief Fund and cooperate with the Assessing Officer for a fresh assessment, allowing the assessee to raise all issues, including the re-opening of assessment and additions on merit.

This detailed analysis of the judgment covers the re-opening of the assessment order, improper sanction, and addition on the merits of the case, providing a comprehensive overview of the legal proceedings and the Appellate Tribunal's decision.