2023 (1) TMI 1217 - AT - Income Tax

CIT(Appeals) dismissed the appeals of the assessee ex parte - Reopening of Assessment u/s 147 - reassessment pursuant to search proceedings conducted against the assessee as per the provisions of Section 153A - unexplained investments by the Assessing Officer in the absence of any response from the assessees - assessee contended that there is a petition pending before the Settlement Commission in the case of company wherein assessee made investment and the outcome of the decision of the Settlement Commission will have bearing on the appeals of the assessee - HELD THAT - Taking the totality of facts and circumstances into consideration and since the assessments were made under 144 r.w.s. 147 of the Act and the Ld. CIT(A) also passed ex parte order rejecting the submission of the assessees to keep the appeal proceedings in abeyance and in the interest of justice, these appeals are restored to the file of the Assessing Officer for denovo assessment in accordance with law. The Assessing Officer shall provide adequate opportunity of being heard to the assessees. The assessees are at liberty to file necessary evidences in support of their claims. Grounds raised by the assessee are allowed for statistical purpose.

Issues:
Appeals against orders of Ld. CIT(Appeals) for AY 2010-11 by different assessees of the same group.

Analysis:
1. The appeals were filed by the assessees against the orders of Ld. CIT(Appeals) for the AY 2010-11. The primary grounds of appeal included challenges to the legality of the orders, lack of jurisdiction, and violation of natural justice principles.
2. The assessees contended that the orders passed by the Ld. AO were illegal and without proper opportunity for being heard. They raised concerns about the double addition of Rs.39,00,000/- and the sustainability of the additions made by the Assessing Officer.
3. The Ld. Counsel for the assessees highlighted that the assessments were reopened under Section 147 of the Income Tax Act following search proceedings. They argued that the proceedings should have been kept in abeyance pending the outcome of the Settlement Commission's decision in the case of M/s Angad & Sons Realcon Pvt. Ltd.
4. Despite the submissions made by the assessees, the Ld. CIT(A) dismissed the appeals ex parte, leading to further challenges regarding the lack of opportunity to present their case adequately.
5. The Assessing Officer made additions based on unexplained investments by the assessees in certain companies, as the assessees failed to respond to notices and questionnaires. The Ld. CIT(A) upheld the additions, stating that the assessees did not provide any material explaining the sources of funds invested.
6. The Ld. CIT(A) passed an ex parte order, emphasizing the lack of filings before the Settlement Commission and the absence of material supporting the assessees' claims. The appeals were dismissed based on the available records and lack of response from the assessees.
7. Considering the circumstances and the ex parte nature of the proceedings, the appeals were restored to the Assessing Officer for denovo assessment to provide the assessees with a fair opportunity to be heard and present necessary evidence in support of their claims. The appeals were allowed for statistical purposes.

This detailed analysis outlines the key issues raised in the appeals, the arguments presented by the assessees, the decisions made by the authorities, and the final outcome of the judgment, ensuring a comprehensive understanding of the legal proceedings.

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