2021 (10) TMI 211 - AT - Income Tax

Sundry Credits from Undisclosed sources - details of sundry creditors have not been filed by the assessee as there is an increase in the sundry creditors during the year under assessment - HELD THAT - When the entire detail was brought on record by the assessee during the first appellate proceedings, though assessee was negligent in appearing before the AO, adequate opportunity of being heard is required to be given to the assessee to decide the issue once for all. Since entire evidence brought on record by the assessee requires initial scrutiny, it would be in the interest of justice to remit this case to the AO. Consequently, this issue is remitted back to the AO to decide afresh after providing adequate opportunity of being heard to the assessee. So, ground is determined in favour of the assessee for statistical purposes. Interest income of the assessee - addition after noticing from 26AS details of Individual Transaction statement of the assessee company which shows that assessee received interest - assessee contended that he has brought on record the entire details viz. P L account with Form 3CD, audited balance sheet, bank statements, which is evident form assessment order, as well as before the ld. CIT(A), but no cognizance has been taken of the documents - HELD THAT - Since all these documents are required to be examined by the AO, this issue is also remitted back to the AO to decide afresh after providing adequate opportunity of being heard to the assessee. So, Ground determined in favour of the assessee for statistical purposes.

Issues:
1. Validity of assessment order passed under sections 147/148 of the Income Tax Act without serving notice to the Assessee Company.
2. Opportunity of being heard not provided to the Assessee during assessment proceedings.
3. Addition of income on account of Sundry Creditors and Interest Income.
4. Failure to appreciate evidence of transaction w.r.t. Sundry Trade Creditors.
5. Upholding addition of Interest Income received from M/s. Intec Securities.
6. Alleged failure to consider explanation and evidence by CIT(A).

Issue 1 - Validity of Assessment Order:
The Appellant contested the assessment order passed under sections 147/148 of the Income Tax Act, alleging non-compliance with the requirement of serving notice to the Assessee Company. The Tribunal noted that the AO proceeded with the assessment under section 144 due to non-appearance of the assessee, resulting from information received through the Non-filers Monitoring System. The Tribunal dismissed Grounds 1, 2, and 4 as they were not pressed during arguments.

Issue 2 - Opportunity of Being Heard:
The Appellant argued that no opportunity of being heard was provided during the assessment proceedings. The Tribunal observed that the AO made additions based on incomplete details of sundry creditors and interest income. The CIT(A) upheld these additions. However, the Tribunal found that the Appellant had supplied complete details during the first appellate proceedings. Due to inadequate scrutiny, the Tribunal remitted the issue back to the AO to decide afresh after providing adequate opportunity of being heard to the assessee.

Issue 3 - Addition of Income:
The AO made additions on account of Sundry Creditors and Interest Income, which were upheld by the CIT(A). The Tribunal found discrepancies in the decision-making process and remitted both issues back to the AO for reevaluation after providing the assessee with a fair opportunity to present their case.

Issue 4 - Failure to Appreciate Evidence:
The Appellant claimed that the CIT(A) failed to appreciate the evidence regarding transactions w.r.t. Sundry Trade Creditors. The Tribunal acknowledged the submissions made by the Appellant and remitted the issue back to the AO for a fresh decision.

Issue 5 - Upholding Addition of Interest Income:
The AO added Interest Income received from M/s. Intec Securities, which was upheld by the CIT(A). The Tribunal found discrepancies in the decision-making process and remitted the issue back to the AO for reevaluation after providing the assessee with a fair opportunity to present their case.

Issue 6 - Alleged Failure to Consider Explanation:
The Appellant alleged that the CIT(A) failed to consider the explanation and evidence presented. The Tribunal did not provide a detailed analysis of this issue as it was considered general in nature and did not require adjudication.

In conclusion, the Tribunal partly allowed the appeal for statistical purposes, remitting several issues back to the AO for reevaluation after ensuring the assessee is provided with a fair opportunity to present their case.

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