2021 (1) TMI 637 - AT - Income Tax

Best judgment assessment u/s 144 - CIT(A) refusing to admit additional evidences - addition relating to bank deposits and interest from banks - HELD THAT - A.O. was constrained to complete the assessment to the best of his judgement u/s 144 of the Act in view of non-cooperation from the assessee s side. As stated assessee was unwell and hence he did not properly represent the matter before A.O. Hence, the assessee has furnished evidences before Ld. CIT(A) to substantiate the cash deposits made into the bank account. CIT(A) has refused to admit them. Assessee did not represent before the AO for the reasons stated above. Hence assessee should not be put into difficulties for the failure of the Ld A.R. Further assessment has been completed by AO to the best of his judgement u/s 144 of the Act. Hence, we are of the view that there was sufficient cause for the assessee in not presenting the evidences before the AO. Accordingly, in the interest of natural justice, the additional evidences furnished by the assessee should have been admitted by Ld CIT(A). Accordingly, we admit the additional evidences. However, these evidences require examination at the end of AO. Since there was failure on the part of the assessee to properly represent before the A.O., we are of the view that the assessee should bear a cost for causing unwarranted inconveniences to the department. Accordingly, we impose a cost of ₹ 2,000/- (Rs. Two thousand only) upon the assessee,

Summary

Issues:
Challenging refusal to admit additional evidences and confirming additions of bank deposits and interest income.

Analysis:
1. Refusal to Admit Additional Evidences:
The appellant challenged the decision of the Ld. CIT(A) for refusing to admit additional evidences related to bank deposits. The appellant explained that the authorized representative was unwell during the previous proceedings, leading to the inability to furnish the evidence before the Assessing Officer (AO). The Ld. CIT(A) rejected the explanation, resulting in the refusal to admit the additional evidences. The appellant argued that the evidences were crucial and should be considered in the interest of natural justice. The ITAT acknowledged the circumstances and admitted the additional evidences, emphasizing that the appellant should not be penalized for the representative's inability to present the evidence before the AO.

2. Confirmation of Additions - Bank Deposits and Interest Income:
The AO had assessed cash deposits and interest income not declared by the appellant, leading to additions in the assessment. The Ld. CIT(A) confirmed these additions based on the lack of cooperation and evidence provided by the appellant during the assessment. However, upon admitting the additional evidences, the ITAT set aside the Ld. CIT(A)'s order and directed the AO to re-examine the issues considering the newly submitted evidence. The ITAT imposed a cost on the appellant for causing inconvenience to the department due to the failure to represent adequately before the AO.

In conclusion, the appeal was treated as allowed for statistical purposes, and the matter was remanded back to the AO for a fresh examination based on the newly admitted evidences, ensuring the appellant's right to present a case with proper representation.