2024 (8) TMI 803 - AT - Income Tax

Validity of order passed by the CIT(A) - denial of principles of natural justice in non- compliance of technical procedure and without affording an opportunity of being heard to the assessee - Addition u/s 56(2)(vii) - Submission of assessee is that the assessee is deprived off to advance the submissions before the ld. CIT(A) to contest the case and thus he may be provided one more opportunity to submit his arguments/ submissions to settle the issue in question before the CIT(A). HELD THAT - The bench considered the submissions of assessee to submit his submissions / arguments as to the issue raised hereinabove but awards cost of Rs. 2,000/- and the same may be deposited in the Prime Minister Relief Fund and copy of the same shall be submitted to the CIT (A) for proof and thus the appeal of the assessee is restored to the file of the CIT(A) to decide it afresh by providing one more opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus the appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
1. Appeal against order of CIT(A) dated 26-10-2023
2. Allegations of non-compliance with natural justice and technical procedures
3. Dismissal of appeal based on mode of filing
4. Addition u/s 56(2)(vii) of the Act

Analysis:
The appeal was filed against the order of the CIT(A) dated 26-10-2023 for the assessment year 2014-15. The appellant raised multiple grounds of appeal, including allegations of the CIT(A) erring in law and fact by not adjudicating on merits, dismissing the appeal based on filing mode, and confirming the addition u/s 56(2)(vii) of the Act. The appellant contended that the order was against natural justice, non-compliance of procedures, and lacked an opportunity to be heard.

The appellant's return of income for the assessment year 2014-15 was processed under section 143(1)(a) of the Act. The case underwent limited scrutiny, and notices were issued to the appellant. The appellant, engaged in trading handicraft and textile items, purchased an immovable property during the year, leading to an addition u/s 56(2)(vii) by the AO. The CIT(A) treated the appeal as infructuous due to manual filing after the e-filing mandate, resulting in dismissal.

During the proceedings, the appellant argued against the CIT(A)'s order, citing non-compliance with natural justice and technical procedures. The appellant sought an opportunity to present arguments and collect relevant documents. The ITAT, after hearing both parties, restored the appeal to the CIT(A) for fresh consideration, allowing the appellant to submit arguments with a cost imposed. The decision to remand the case did not reflect on the merits, leaving it to be independently adjudicated by the CIT(A) in accordance with the law.

Ultimately, the ITAT allowed the appeal for statistical purposes, emphasizing that the restoration did not imply a judgment on the underlying dispute. The order was pronounced on 31/01/2024, providing the appellant with an opportunity to present their case afresh before the CIT(A).