2020 (9) TMI 721 - AT - Income Tax

Ex-parte order passed by CIT-A - Denial of natural justice - non giving opportunity of hearing to the respective assessee - addition u/s 68 - HELD THAT - From the perusal of the order of the CIT(A) can be seen that the notice were issued to the assessee and on two occasions, the assessee sought time before the CIT(A). The respective assessee have not made out any case as regards to the non appearance before the CIT(A) despite giving proper opportunity. Therefore, we are imposing cost of ₹ 5,000/- in each case which should be paid by the respective assessee to the Prime Minister s relief fund. The CIT(A) has not discussed the merit of the case and passed ex-parte order. It will be appropriate to remand back this issue in entirety to the file of the CIT(A).The appeal of the assessee is partly allowed for statistical purpose.

Issues:
1. Appeal against the order passed by CIT(A)-3, New Delhi for Assessment Year 2011-12.
2. Appeal challenging the ex-parte order passed by CIT(A) without giving opportunity of being heard.
3. Addition u/s 68 of the Act and commission made by AO.
4. Reassessment proceedings initiated by the A.O.
5. Non-appearance before the CIT(A) and imposition of costs.
6. Remanding the issue back to the file of the CIT(A) for deciding the appeals afresh on merit.

Issue 1: Appeal against CIT(A) Order
The two appeals were filed by the assessee against the order passed by CIT(A)-3, New Delhi for Assessment Year 2011-12. The grounds of appeal raised various issues related to the legality and factual correctness of the CIT(A) order. These included challenges regarding the violation of natural justice, confirmation of additions by the CIT(A), and errors in the initiation of reassessment proceedings under Section 147 and Section 148 of the Income Tax Act.

Issue 2: Ex-Parte Order and Opportunity of Being Heard
The primary contention in both appeals was the passing of ex-parte orders by the CIT(A) without giving the assessee an opportunity of being heard. The appeals argued that the non-appearance before the CIT(A) was due to reasons beyond the control of the assessee. Despite the submissions made by the assessee and the challenges raised regarding the initiation of proceedings and the confirmation of additions, the CIT(A) had passed orders without giving any findings on the merits of the case.

Issue 3: Addition u/s 68 of the Act and Commission
The appeals specifically addressed the additions made by the Assessing Officer under Section 68 of the Act and on account of commission. The challenges included the lack of basis for the additions, the failure to consider material and evidence provided by the assessee, and the confirmation of these additions by the CIT(A) without proper justification.

Issue 4: Reassessment Proceedings
The appeals raised concerns about the validity of the reassessment proceedings initiated by the Assessing Officer. It was argued that the reasons recorded for issuing notices under Section 148 were legally flawed and contrary to facts. Additionally, it was contended that there was a lack of independent application of mind by the Assessing Officer in forming beliefs for recording reasons, thus rendering the reassessment proceedings legally questionable.

Issue 5: Non-Appearance and Imposition of Costs
The issue of non-appearance before the CIT(A) was addressed during the proceedings. Despite the assessee's submissions regarding the reasons for non-appearance, the CIT(A) imposed costs on the assessee for failing to appear. The imposition of costs was justified by the lack of a compelling case made by the assessee for non-appearance despite opportunities given.

Issue 6: Remanding the Issue for Fresh Consideration
In light of the procedural and substantive issues raised in the appeals, the Tribunal decided to remand the matter back to the file of the CIT(A) for deciding the appeals afresh on merit. The Tribunal emphasized the importance of following principles of natural justice and giving the assessee a fair opportunity of being heard. The appeals were partly allowed for statistical purposes, indicating a partial success for the assessee in challenging the CIT(A) order.

This detailed analysis of the judgment highlights the key issues raised in the appeals, the arguments presented by the parties, and the Tribunal's decision to remand the matter back to the CIT(A) for fresh consideration.

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