2022 (10) TMI 417 - AT - Income Tax

Reopening of assessment u/s 147 - unexplained investments in Mutual Funds and unexplained money deposited in Axis Bank HDFC Bank and State Bank of India and also added the CPB interest - difference on account of cascading effect of the income received and further reinvested both being added on various occasions - Admission of additional evidences - HELD THAT - Additional evidences produced by the assessee before the CIT(A) namely the Mutual Funds statement was issued on 01.04.2014 whereas the reassessment was passed on 26.03.2014 and another reason that matured FDR receipt could not be obtained by the assessee from its bankers before passing of the assessment order by the AO. Considering the ill health of the assessee and transfer of his residence to New Delhi. We find that the assessee is sufficiently prevented from above reasons for not furnishing the above documents to the AO - Therefore to meet the ends of justice we deem fit it to set aside the case to the file of the Assessing Officer and give one more opportunity to the assessee to explain its case with these additional evidences as last opportunity by imposing a cost of Rs. 10, 000/- as the assessee has not cooperated with the Assessing Officer. Appeal filed by the Assessee is allowed for statistical purposes.

Summary

Issues:
1. Assessment order under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 for A.Y. 2010-11
2. Confirmation of penalty u/s. 271(1)(c) of the Act for A.Y. 2010-11
3. Dismissal of appeal by CIT(A) based on non-cooperation and investment pattern
4. Rejection of additional evidences by CIT(A)
5. Request for setting aside the case and providing one more opportunity to explain with additional evidences

Analysis:

1. The appellant filed ITA No. 924/Ahd/2016 against the assessment order for A.Y. 2010-11, challenging the additions made by the Assessing Officer. The Assessing Officer added amounts for unexplained investments in Mutual Funds, unexplained money in bank accounts, and unexplained interest, resulting in a total income determination of Rs. 1,16,43,370. The appellant contended that the additional evidences were not admitted by the CIT(A), leading to the appeal before the ITAT.

2. The ITAT noted that the appellant, a senior citizen and retired employee, faced challenges in producing necessary documents due to ill health and relocation. The ITAT set aside the case to the Assessing Officer, granting one more opportunity to the appellant to explain with additional evidences. The ITAT imposed a cost of Rs. 10,000 on the appellant for lack of cooperation, payable to the Prime Minister's Relief Fund within four weeks.

3. Regarding the penalty u/s. 271(1)(c) of the Act for concealment of income, the ITAT found the penalty order infructuous due to setting aside the reassessment order. Consequently, ITA No. 2878/Ahd/2017 was dismissed as infructuous. The ITAT allowed ITA No. 924/Ahd/2016 for statistical purposes, emphasizing the importance of the appellant utilizing the opportunity to furnish all required documents and cooperate with the Assessing Officer.

This comprehensive analysis covers the issues involved in the legal judgment, detailing the challenges faced by the appellant, the decision of the ITAT to provide another opportunity, and the implications on the penalty order.