2021 (2) TMI 1137 - AT - Income Tax

Ex-parte appeal decided by CIT-A - AR submitted that the Ld. CIT(A) has dismissed all the appeals without giving adequate opportunity to the assessee of being heard - DR vehemently argued that the assessee should not be permitted to take advantage of their carelessness and non cooperative approach and that the appeals of the assessee deserved to be dismissed in view of the failure of the assessee to establish their claims with documentary evidences before both the Lower Authorities - HELD THAT - Having heard both the parties and duly taking note of the fact that both the parties have agreed that these appeals can be restored to the office of the Ld. CIT(A), for the cause of substantial justice, we deem it expedient to restore all the captioned appeals to the file of the Ld. CIT(A) for being adjudicated upon afresh by passing a speaking order after giving proper opportunity to the assessee to present their cases. We also direct the assessees to fully co-operate during the course of the first appellate proceedings failing which the Ld. CIT(A) shall be at liberty to proceed ex-parte qua the assessees in accordance with law. Assesee all the appeals stand allowed for statistical purposes.

Issues Involved:
1. Adequate opportunity for the appellant.
2. Arbitrary and ad hoc additions by the assessing officer.
3. Non-applicability of provisions of Section 234B and 234D of the Income Tax Act.
4. No incriminating documents found during the search.
5. Presumptive basis of additions.

Issue-wise Detailed Analysis:

1. Adequate Opportunity for the Appellant:
The appellants argued that the CIT(A) dismissed the appeals without providing adequate opportunity to present their cases. They claimed that the orders were passed "merely on surmises and conjecture" and should be reversed. The Tribunal acknowledged the appellants' contention and noted that the CIT(A) should have adjudicated on the merits even if proceeding ex-parte.

2. Arbitrary and Ad Hoc Additions by the Assessing Officer:
The appellants challenged the additions made by the assessing officer, asserting that these were arbitrary and made on an ad hoc basis without sufficient evidence. They emphasized that no evidence was found regarding the expenditure for the purchase of share capital or other transactions. The Tribunal took note of these arguments and the lack of cooperation from the appellants during appellate proceedings, as highlighted by the Sr. Departmental Representative (DR).

3. Non-Applicability of Provisions of Section 234B and 234D of the Income Tax Act:
The appellants contended that the provisions of Section 234B and 234D were not applicable in their cases. They argued that the CIT(A) erred in rejecting this ground and that the orders were based on "surmises and conjecture." The Tribunal considered this argument while deciding to restore the appeals for re-adjudication.

4. No Incriminating Documents Found During the Search:
The appellants argued that no incriminating documents were found during the search, and therefore, the additions made were unjustified. They claimed that the additions were made purely on a presumptive basis. The Tribunal acknowledged this point and noted that the appeals should be re-examined with proper opportunity for the appellants to present their cases.

5. Presumptive Basis of Additions:
The appellants repeatedly emphasized that the additions were made on a presumptive basis without concrete evidence. They argued that the CIT(A) and the assessing officer relied on assumptions rather than facts. The Tribunal agreed that the appeals should be restored for a fresh adjudication to ensure substantial justice.

Conclusion:
The Tribunal decided to restore all the appeals to the file of the CIT(A) for re-adjudication. It directed the CIT(A) to pass a speaking order after giving proper opportunity to the appellants to present their cases. The Tribunal also instructed the appellants to fully cooperate during the appellate proceedings, failing which the CIT(A) could proceed ex-parte in accordance with the law. All appeals were allowed for statistical purposes, and the decision was announced on the conclusion of the Virtual Hearing on 17th February 2021.

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