2020 (9) TMI 772 - HC - Income Tax

Assessement framed u/s.143(3) based on a non-est return filed - Whether the return filed on 31/03/2014 for the Assessment Year 2012-13 is a non-est return and not a return u/s.139(5)? - Before the Income Tax Appellate Tribunal, the learned counsel who appeared on behalf of the assessee, contended that an opportunity of cross examination of Shri. Stephen John was not provided to the assessee by the CIT (Appeals) that too even after raising the said issue before the CIT(Appeals) - HELD THAT - Since the appellant/assessee has raised the issue of opportunity of cross examination of Stephen John and the same was given to the assessee and for the same, the matter is remitted back to the CIT (Appeals), we are of the view that there is no infirmity in the order of the Income Tax Appellate Tribunal and thus, we find no merit in the Tax Case appeal and the Appeal is liable to be dismissed. Since the Income Tax Appellate Tribunal has remitted back the matter to the CIT (Appeals) giving opportunity to the assessee for cross examination, and further directed the CIT (Appeals) to decide the matter, after giving opportunity of cross examination to the assessee, the substantial questions of law 1 and 2 are concerned, they are left open to the CIT (Appeals) to decide the same on merits and in accordance with law.

Summary

Issues:
1. Assessment of taxable income based on revised return filed by the assessee.
2. Disallowance of expenses under Capital Gains and Profit on facilitating sale of property.
3. Addition of unexplained cash deposits to the total income under section 68 of the Income Tax Act.
4. Appeal against the order of the Assessing Officer/Deputy Commissioner of Income Tax.
5. Dismissal of appeal by the CIT (Appeals)-1.
6. Appeal before the Income Tax Appellate Tribunal regarding disallowances and assessment issues.
7. Lack of opportunity for cross-examination of parties during assessment proceedings.
8. Remand of the case by the ITAT to the CIT (Appeals) for cross-examination.
9. Substantial questions of law raised by the appellant/assessee.

Analysis:

1. The appellant/assessee filed a Tax Case Appeal against the order of the Income Tax Appellate Tribunal related to the Assessment Year 2012-13. The case involved the assessee declaring a total income in the original return, subsequently revising it, and the assessment order resulting in a higher taxable income.

2. Under Capital Gains, the appellant's income was adjusted due to disallowed expenses related to property sale. Additionally, expenses claimed under Profit on facilitating property sale were questioned, leading to discrepancies in the assessment of taxable income.

3. The Assessing Officer added unexplained cash deposits to the total income under section 68 of the Income Tax Act, raising concerns about the legitimacy of the sources of income declared by the assessee.

4. The appellant appealed against the order of the Assessing Officer, which led to further proceedings before the CIT (Appeals)-1.

5. The CIT (Appeals)-1 dismissed the appeal based on the lack of evidence to substantiate the claims made by the assessee, including the disallowed expenses and unexplained cash deposits.

6. Subsequently, the appellant filed an appeal before the Income Tax Appellate Tribunal regarding the disallowances and assessment issues, which were thoroughly examined by the Tribunal.

7. The issue of lack of opportunity for cross-examination of parties during the assessment proceedings was raised, highlighting procedural irregularities in the assessment process.

8. The ITAT remanded the case back to the CIT (Appeals) for providing an opportunity for cross-examination, emphasizing the importance of fair proceedings and the right to cross-examine witnesses.

9. The appellant raised substantial questions of law related to the validity of the assessment, opportunity for cross-examination, and the overall assessment process, which were addressed during the proceedings before the ITAT and subsequent judgments.

This detailed analysis outlines the progression of the case, highlighting key issues related to the assessment of taxable income, disallowed expenses, unexplained cash deposits, procedural fairness, and the appellate process followed by the courts.