2020 (12) TMI 75 - AT - Income Tax

Reopening of assessment - unexplained deposits - Commissioner (Appeals) upheld the addition made by assessing officer by taking view that he has no alternative except to accept the findings given by assessing officer on both the additions - assessee vehemently submitted that the learned Commissioner (Appeals) passed the impugned order in ex parte proceeding - HELD THAT - As noted that in the application for additional ground of appeal was duly acknowledged by the officer of Commissioner (Appeals), the assessee referred the reasons recorded by assessing officer. The assessee specifically pleaded that bank account, wherein the deposit of ₹ 1.16 Crore stated to be deposited does not belong to assessee. Commissioner (Appeals) neither considered those facts not give any finding while passing the impugned order. Considering the submission of learned AR of the assessee and the contents of the impugned order passed by Commissioner (Appeals), we are of the view that the order is passed without affording fair and reasonable possibility to the assessee. Therefore, we deem it appropriate to restore all the grounds of appeal to the file of learned Commissioner (Appeals) to decide all the issue de novo including the additional ground of appeal raised by assessee. - Decided in favour of assessee for statistical purposes.

Issues:
1. Validity of reopening under section 147/148
2. Ex-parte order passed by learned Commissioner (Appeals)
3. Non-adjudication of additional ground of appeal
4. Addition made under section 68 and section 11 of the Income Tax Act

Analysis:
1. Validity of Reopening under Section 147/148:
The case involved the reopening of assessment under section 147 based on the deposit of significant amounts in bank accounts not disclosed in the income tax return. The assessing officer raised queries regarding undisclosed accounts and made additions under section 68. The appellant challenged the validity of the reopening, arguing that the bank account in question did not belong to them. The Tribunal noted discrepancies in the assessment order and directed the case to be restored to the Commissioner (Appeals) for a fresh decision, emphasizing the need for a fair opportunity for the appellant to present evidence and arguments.

2. Ex-parte Order Passed by Learned Commissioner (Appeals):
The appellant contended that the order passed by the Commissioner (Appeals) was ex-parte, lacking a reasonable opportunity for the appellant to present their case. The Tribunal observed that the Commissioner (Appeals) upheld the additions without considering the additional ground of appeal challenging the validity of the reopening. The Tribunal found that the order was passed without affording a fair and reasonable opportunity to the appellant, leading to the decision to restore all grounds of appeal to the Commissioner (Appeals) for a fresh adjudication.

3. Non-Adjudication of Additional Ground of Appeal:
The appellant raised an additional ground of appeal challenging the notice under section 148, which was not considered by the Commissioner (Appeals) in the impugned order. The Tribunal emphasized the importance of addressing all grounds raised by the appellant and ensuring a thorough examination of the issues. Consequently, the Tribunal directed the Commissioner (Appeals) to decide all issues, including the additional ground of appeal, de novo, with the appellant providing necessary evidence and information.

4. Addition Made under Section 68 and Section 11 of the Income Tax Act:
The assessing officer made additions under section 68 for undisclosed deposits and disallowed the claim of exemption under section 11. The Commissioner (Appeals) upheld these additions without considering the appellant's submissions. The Tribunal, noting the procedural irregularities and lack of fair opportunity, allowed the appeal for statistical purposes, directing a fresh consideration of all grounds and evidence by the Commissioner (Appeals) to ensure a just decision in accordance with the law.

In conclusion, the Tribunal's decision focused on procedural fairness, emphasizing the importance of providing a reasonable opportunity for the appellant to present their case and ensuring that all grounds of appeal are thoroughly examined and adjudicated upon by the appropriate authorities.

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