2021 (8) TMI 855 - AT - Income Tax

Addition u/s 68 - unexplained cash credit - HELD THAT - It is an admitted fact that due to non-substantiation of the identity and creditworthiness of the share applicants and genuineness of the transactions, the AO invoking the provisions of section 68 made addition - We find due to non-appearance of the assessee before the CIT(A) despite number of opportunities granted, the learned CIT(A) in the ex-parte order passed by him sustained the addition made by the AO. It is the submission of the for the assessee that in the interest of justice, the assessee be given an opportunity to substantiate its case before any of the lower authorities. Considering the totality of facts of the case and in the interest of justice, we deem it proper to restore this issue to the file of the learned CIT(A) with a direction to grant one final opportunity to the assessee to substantiate its case by filing requisite details and the learned CIT(A) shall decide the issue as per fact and law. Appeal filed by the assessee is allowed for statistical purpose

Summary

Issues:
Reopening of assessment under section 148 based on accommodation entries - Addition under section 68 for unexplained credit - Non-appearance of assessee before CIT(A) - Opportunity to substantiate case before lower authorities.

Analysis:
The appeal pertains to the reopening of assessment for Assessment Year 2004-05 based on accommodation entries. The AO made an addition of &8377; 30,03,390 under section 68 due to unexplained credit. Despite multiple opportunities, the assessee did not appear before the CIT(A), leading to an ex-parte order upholding the AO's decision.

The grounds of appeal raised questions on the justification of the CIT(A)'s order. The assessee argued for an opportunity to substantiate its case, citing lack of proper representation before the CIT(A). The DR supported the AO and CIT(A) orders, emphasizing the assessee's failure to avail opportunities.

Upon review, the ITAT found the non-substantiation of share applicants' identity and creditworthiness by the assessee. Considering the interest of justice, the ITAT decided to remand the issue back to the CIT(A) for the assessee to present necessary details. The ITAT directed the assessee to appear before the CIT(A) without seeking adjournment, empowering the CIT(A) to pass an appropriate order as per law.

Ultimately, the ITAT allowed the appeal for statistical purposes, emphasizing the importance of providing the assessee with a fair opportunity to substantiate its case. The decision aimed to ensure due process and fairness in the assessment proceedings, highlighting the significance of proper representation and evidence in tax matters.