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2023 (12) TMI 1381 - AT - Income TaxReopening of assessment u/s 147 - AO based on the bank statements obtained from Karur Vysya Bank Ltd. had noticed certain credits into the bank account of the assessee and had called for furnishing details in this regard - HELD THAT - We also notice that the assessee did not appear before the CIT(A) who has concluded the appellate proceedings ex-parte based on the materials available on records. Given this in the interest of natural justice and fair play we are of the considered view that the assessee be given one final opportunity to present the case on merits. Accordingly we remit the issue back to the AO for de novo verification calling for necessary details as may be required. Assessee is directed to furnish the required information as may be called for without seeking any adjournments and cooperate with the proceedings. Appeal of the assessee is allowed for statistical purposes.
Issues:
1. Addition of alleged contract receipts to the income of the appellant. 2. Estimation of income at an exorbitant rate of 20% of contract receipts. 3. Addition of deposits into the bank as unexplained cash credit. 4. Treatment of credit entries in the bank statement as unexplained cash credits. 5. Violation of principles of natural justice by not providing an opportunity of personal hearing. Analysis: Issue 1: Addition of Alleged Contract Receipts The appeal contested the addition of Rs. 11,68,000 to the appellant's income, representing 20% of the alleged contract receipts of Rs. 58,40,000, despite actual receipts being Rs. 29,20,000. The Assessing Officer proceeded with the addition as the appellant did not respond to notices and the Assessing Officer's final notice. The CIT(A) directed the AO to credit the TDS amount of Rs. 58,400, providing partial relief. The Tribunal remitted the issue back to the AO for de novo verification, emphasizing the appellant's opportunity to present the case on merits. Issue 2: Estimation of Income at 20% Rate The appeal challenged the estimation of income at an exorbitant rate of 20% of contract receipts. The AO made this estimation due to the appellant's non-response to notices. The CIT(A) provided relief by considering cheques returned after verification. The Tribunal allowed the appeal for statistical purposes, acknowledging the appellant's delay in filing the appeal due to operational email issues. Issue 3: Addition of Deposits as Unexplained Cash Credit The AO added Rs. 8,36,965 as unexplained cash credit based on deposits in the bank account. The appellant did not file any explanation to the notice under section 142(1) of the Act. The CIT(A) gave relief concerning cheques returned after reviewing the materials on record. Issue 4: Treatment of Credit Entries as Unexplained Cash Credits The AO added Rs. 99,30,973 to the appellant's income as unexplained cash credits, including credit entries in the bank statement. The CIT(A) provided relief after verifying the materials on record, particularly regarding cheques returned. Issue 5: Violation of Principles of Natural Justice The appellant contended that the order under section 250 of the Income Tax Act, 1961, was passed without a personal hearing, violating natural justice principles. The Tribunal, following the Supreme Court's decision, condoned the delay in filing the appeal, admitting it for adjudication. Despite the appellant's non-appearance, the Tribunal remitted the issue back to the AO for de novo verification, emphasizing the appellant's cooperation and participation in the proceedings. In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the importance of natural justice and fair play in the proceedings.
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