2024 (9) TMI 857 - AT - Income Tax

Ex-parte order without granting sufficient opportunity of being heard to the appellant - Rejection of book results/accounts u/s 145 - estimating the profits @ 4% of the total contractual receipts - CIT(A) dismissed the appeal of the assessee on the ground that the assessee did not pursue his appeal before the CIT(A) and did not furnish any supporting documentary evidence or written submission despite having been given sufficient opportunity of being heard - HELD THAT - We have considered the above submissions and think it proper to remand the matter back to the file of the CIT (A) to decide the issue on merit after affording reasonable opportunities of being heard to the appellant considering the non-compliance due to Covid-19 Pandemic. The appellant is also directed to make compliance before the Ld. CIT (A) and explain its case on merit.

Summary

Issues:
1. Ex-parte order passed by the Learned CIT (A) without granting sufficient opportunity to the appellant.
2. Rejection of book results/accounts under section 145 of the Income Tax Act without valid reasons.
3. Estimation of profits at 4% of total contractual receipts without considering the facts of the case.
4. Non-compliance by the appellant in providing necessary details during scrutiny.

Analysis:
1. The appellant raised concerns regarding the ex-parte order passed by the Learned CIT (A) without granting sufficient opportunity for a hearing. The appellant argued that this violated their right to be heard, a fundamental principle of natural justice.

2. The rejection of book results/accounts under section 145 of the Income Tax Act was challenged by the appellant, claiming that the reasons for rejection were not valid or adequately explained in the assessment order. The appellant contended that the rejection was unfounded and not in accordance with the law.

3. The estimation of profits at 4% of total contractual receipts by the Learned Assessing Officer was disputed by the appellant, who argued that this estimation was arbitrary and did not consider the specific circumstances of the case. The appellant asserted that the estimation was not based on factual evidence or a proper assessment of the business operations.

4. The non-compliance of the appellant in providing necessary details during scrutiny was noted by the Assessing Officer, leading to a lack of verification and third-party inquiry. The appellant failed to furnish essential records and details despite multiple notices, which hindered the assessment process and raised concerns about transparency and compliance.

Conclusion:
The appellate tribunal remanded the matter back to the file of the Learned CIT (A) to allow the appellant a fair opportunity to present their case on merit, considering the challenges faced during the Covid-19 pandemic. The tribunal directed the appellant to comply with the proceedings before the Learned CIT (A) and explain their case thoroughly. The appeal was allowed for statistical purposes, emphasizing the importance of due process and proper consideration of all relevant factors in tax assessments.