2017 (8) TMI 227 - AT - Income Tax

Additional evidences under Rule 46A of the Income Tax Rules, 1962 admission - Held that - AO adjourned telephonically the case to 17.11.2010. On the said paper, the mobile number of the Counsel for the assessee namely, Sh. R.K. Malik, CA is also mentioned. It is therefore, clear that the AO adjourned the case to 17.11.2010, but in the body of the assessment order, he has mentioned that the assessee has not complied on 15.11.2010 when the case was fixed for hearing. It is noticed that in the body of the impugned order, nothing has been mentioned about the above said facts and the CIT(A) had also not dealt with the additional evidences which were admitted by him under Rules 46A of the Income Tax Rules, 1962. We, therefore, by considering the totality of the facts, deem it appropriate to set aside this case back to the file of the AO for fresh adjudication in accordance with law after providing due and reasonable opportunity of being heard. The assessee is also directed to cooperate and not to seek undue or unwarranted adjournments. - Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues:
Appeal against CIT(A)'s order - Arbitrary order, additions confirmed by CIT(A) - Unsecured loss, fresh investment, pro-rata disallowance of expenses - Non-compliance by assessee - Assessment framed ex-parte - Additional evidences submitted under Rule 46A - CIT(A) upholds AO's decision - Assessee's appeal for fresh adjudication.

Analysis:
The appeal was filed against the CIT(A)'s order, challenging the arbitrary nature of the order and the additions confirmed by the CIT(A). The additions made by the Assessing Officer (AO) included amounts on account of unsecured loss, fresh investment, and pro-rata disallowance of operational expenses. The AO framed the assessment ex-parte due to the assessee's non-compliance during the scrutiny process. The assessee provided reasons for non-compliance, citing the unavailability of the director and insufficient time for preparation. Additional evidences were submitted under Rule 46A, but the AO proceeded with an ex-parte assessment. The CIT(A) upheld the AO's decision, stating that the estimate was made in good faith based on available material.

The assessee contended that proper opportunity for being heard was not provided by the AO, and the additional evidences were not considered appropriately by the CIT(A). The assessee requested the case to be sent back to the AO for fresh adjudication. The Departmental Representative (DR) supported the lower authorities' orders, stating that the AO had given ample opportunities for compliance. Upon review of the assessment record, it was found that the AO had telephonically adjourned the case to a later date, contrary to what was mentioned in the assessment order. The Tribunal deemed it appropriate to set aside the case for fresh adjudication, emphasizing the importance of providing a reasonable opportunity for being heard.

Ultimately, the Tribunal allowed the appeal filed by the assessee for statistical purposes, directing the case to be sent back to the AO for fresh adjudication in accordance with the law. The assessee was instructed to cooperate and avoid seeking unnecessary adjournments during the process.