2024 (8) TMI 745 - AT - Income Tax

Ex-parte order passed by CIT(A) - Validity of reopening of assessment - addition of bogus expenses - HELD THAT - Reassessment proceedings submissions were duly made before the Assessing Authority which were not considered by the AO and in appeal before the learned First Appellate Authority no physical notice of hearing was ever received by the assessee and CIT(A) dismissed the appeal of the assessee, ex parte, without adverting on merit of the case and without affording adequate opportunity of hearing. Considering all, we hereby set aside the order of CIT(A) and restore the matter to the file of learned First Appellate Authority for fresh decision.

Summary

Issues:
Appeal against ex parte order, time-barred assessment, approval without application of mind, undated approvals, violation of guidelines for reopening, assessment without physical notice, assessment based on information from DDIT, framing assessment without independent belief, assessment without pointing out defects, hasty assessment, initiation of penalty proceedings.

Analysis:
1. The appeal was filed against the ex parte order by the National Faceless Appeal Centre for the assessment year 2012-13. The grounds of appeal included errors in passing the ex parte order, time-barred assessment, and lack of physical notices for hearings.

2. The Assessing Officer received information regarding alleged bogus expenses made by the assessee company to a bogus concern. The case was reopened under section 147 of the Income Tax Act, and the assessment was completed by adding the amount as an accommodation entry under section 68 of the Act.

3. The counsel for the assessee argued that submissions were made during the reassessment proceedings, but the Assessing Officer did not consider them. The First Appellate Authority issued notices via email, which were not physically received due to the demise of the legal consultant. The order was challenged on the grounds of lack of opportunity to present the case adequately.

4. The Tribunal set aside the order of the First Appellate Authority, citing a lack of adequate opportunity for the assessee to be heard. The case was remanded for fresh adjudication after affording proper hearing opportunities to the assessee.

5. The decision was made in favor of the assessee for statistical purposes, allowing the appeal against the ex parte order and directing a fresh decision by the First Appellate Authority with proper hearing opportunities.

6. The appeal of the assessee was allowed for statistical purposes, and the order was pronounced in open court on a specified date.