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2021 (4) TMI 437 - AT - Income TaxEx-parte order u/s 144 - notices issued during the year 2014 onwards have remained uncomplied with and the assessment was thereafter completed u/s 144 - CIT(A) admitted the additional grounds and restored the matter before the AO - HELD THAT - Where the business of the assessee is discontinued and the premises have been taken over by the Bank as part of its recovery proceedings, it is quite likely that the focus of the assessee company and its directors is directed towards the crises being faced by them due to non recovery of the Bank dues and consequent action taken by the Bank and it is therefore likely that the notices issued by Assessing Officer have remained un-complied with and there was reasonable cause which prevented the assessee from submitting the requisite information/documents. Therefore, in such peculiar facts and circumstances of the case and especially where the assessment has been completed u/s 144 of the Act, the ld. CIT(A) where he deemed it appropriate to admit the additional evidences under rule 46A(1) to adjudicate the grounds of appeal and also on principle of natural justice, we do not find any infirmity in such action of the ld. CIT(A) in admitting such additional evidences. It is also noted that these additional evidences have been sent to the Assessing Officer for necessary examination and therefore, as far as Revenue s interest is concerned, the same has been duly safe-guarded by way of providing the reasonable opportunity to the AO.
Issues:
Acceptance of additional evidences by the CIT(A) in contravention of Rule 46A(1) of the I.T. Rules. Analysis: The appeal filed by the Revenue challenged the order of the CIT(A) for A.Y 2013-14, specifically focusing on the acceptance of additional evidences by the assessee before the CIT(A) in violation of Rule 46A(1) of the I.T. Rules. The facts revealed that the assessee declared a loss in the return of income, but the AO assessed the income at a significantly higher amount. The assessee submitted additional evidences during the appeal process, leading to a reduction in the additions made by the AO. The Revenue disputed the acceptance of these additional evidences by the CIT(A) while acknowledging the lack of grievance on the merits of the case. During the hearing, the Revenue argued that the assessee knowingly avoided attending the assessment proceedings, rendering the additional evidences inadmissible. The Revenue contended that all notices were sent to the last known address of the assessee, constituting proper service. In contrast, the assessee's representative highlighted that the notices were not received due to the business being discontinued following a bank takeover, leading to a delay in filing the appeal and submitting additional evidences. The CIT(A) accepted the additional evidences, emphasizing the need for natural justice and the grounds of appeal. The CIT(A) examined the additional evidences and sent them to the AO for verification. The AO, after reviewing the evidences, concluded that the additions made during the ex-parte assessment were not sustainable. The findings of the CIT(A) indicated that the additional evidences were crucial in reducing the additions made by the AO, including unsecured loans and share capital issues. The CIT(A) justified the acceptance of additional evidences based on the peculiar circumstances faced by the assessee, ensuring a fair opportunity for presenting their case. The Tribunal upheld the CIT(A)'s decision to admit the additional evidences under Rule 46A(1) for adjudication, considering the unique circumstances of the case. The Tribunal noted that the additional evidences were sent to the AO for examination, safeguarding the Revenue's interests. Ultimately, the appeal of the Revenue was dismissed, affirming the actions of the CIT(A) in accepting the additional evidences and providing relief to the assessee based on the facts and principles of natural justice. In conclusion, the judgment emphasized the importance of considering the circumstances of the case, ensuring fairness in the appeal process, and upholding the principles of natural justice while admitting additional evidences for examination and decision-making.
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