2023 (1) TMI 702 - AT - Income Tax

Non-speaking order passed by the Ld. CIT(A) - Assessment was completed ex parte for non-compliance of two notices issued by the Ld. AO - addition of sale consideration of Rs 2,00,00,000/- from the sale of shares u/s 68 - HELD THAT - From the perusal of Rule 29 of ITAT rules, we note that the said Rule provides, inter alia, if the Income Tax Authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such documents to be produced and may allow such evidence to be produced. Provisions of sec. 250 of the Act which provides for procedure to be adopted by Ld. CIT(A) in disposing of any appeal, make such further enquiry as he thinks fit, or may direct the AO to make further enquiry and report the result of the same to the Commissioner Appeals. Further, sub-section (6) provides that Ld. CIT(A) shall pass an order in writing and shall set the points for determination, the decision thereof and the reasons for the decision. Principle governing the exercise of powers by the first appellate authority are contemplated u/s. 250 and 251 of the Act, breach of it has far reaching consequences on the administration of justice culminating into litigant approaching the higher appellate authority. We also take note of the decision of Tin Box Co. 2001 (2) TMI 13 - SUPREME COURT wherein the Hon ble Supreme Court has directed that the assessee should be given proper opportunity during the assessment proceeding and failure to do so, the matter should be remitted back. Keeping in mind the non-speaking order passed by the Ld. CIT(A) dismissing it for non-attendance, the provisions of sections 250 and 251, the decision of Hon ble Supreme Court in the case of Tin Box Ltd. (supra) and the petition filed under Rule 29 of the ITAT Rules along with paper book, all of which are referred and discussed above, we find it proper to remit the matter back to the file of Ld. CIT(A) to pass a speaking order on merits of the case by examining, verifying and analyzing the material placed on record. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
Appeal against order of Ld. CIT(A) confirming addition of sale consideration of Rs 2,00,00,000 from sale of shares u/s 68 of IT Act without conclusive evidence. Non-attendance of assessee leading to ex parte assessment u/s 144 of the Act. Appeal dismissed by Ld. CIT(A) due to non-attendance. Request for admission of additional evidence under Rule 29 of ITAT Rules. Assessment completed ex parte. Proper opportunity not given to assessee. Remittal of matter back to Ld. CIT(A) for a speaking order on merits.

Detailed Analysis:

1. Issue 1 - Addition of Sale Consideration: The appeal challenges the addition of Rs 2,00,00,000 from the sale of shares under section 68 of the Income Tax Act without conclusive evidence. The Ld. CIT(A) confirmed the addition based on suspicions and surmises without substantial proof against the assessee.

2. Issue 2 - Ex Parte Assessment: The assessment was completed ex parte under section 144 of the Act as the assessee failed to comply with notices and did not appear to explain its case. The non-attendance of the assessee led to adverse conclusions against them.

3. Issue 3 - Dismissal by Ld. CIT(A): The Ld. CIT(A) dismissed the appeal due to the non-attendance of the assessee, indicating a lack of interest in pursuing the case. Despite perusing the material on record, the Ld. CIT(A) found no meritorious evidence to support the assessee's claims.

4. Issue 4 - Request for Additional Evidence: The assessee sought admission of additional evidence under Rule 29 of the ITAT Rules, contending that proper time was not allowed during the first appeal to present crucial documents supporting the genuineness of the transaction.

5. Issue 5 - Remittal of Matter: The Tribunal observed lapses in the proceedings and the non-speaking order of the Ld. CIT(A). Citing relevant legal provisions and precedents, the matter was remitted back to the Ld. CIT(A) for a detailed, speaking order on the merits of the case, emphasizing the importance of providing the assessee with a fair opportunity to present their case.

6. Conclusion: The Tribunal allowed the appeal for statistical purposes, setting aside the impugned order and directing the Ld. CIT(A) to re-examine the case after affording the assessee a reasonable opportunity to be heard. The decision aimed to uphold principles of natural justice and ensure a fair adjudication process.

This comprehensive analysis of the legal judgment highlights the key issues, procedural irregularities, and the Tribunal's decision to remit the matter back for a fair and thorough assessment based on the principles of justice and legal provisions.