2020 (12) TMI 1140 - AT - Income Tax

Reopening of assessment u/s 147 - Due to non-service of notices assessment has been passed ex-parte - additions have been made under Section 69 and 68 which were on account of unexplained cash Credit in the bank account and undisclosed amount invested in the purchase of land - HELD THAT - Initiation of proceedings under Section 147/148 of the Act and the assessment order has been passed without service of statutory notices and without giving any opportunity to the assessee there is gross violation of natural justice. Even before the first appellate authority the matter has been decided ex-parte, without any opportunity to represent as notices could not be served. Therefore, in the interest of substantial justice the matter is restored back to the file of Assessing Officer to be decided afresh in accordance with law on all the issues raised before us including the legal issues are kept open and the assessee is directed comply with the notices and substantiate her case before the Assessing Officer.

Issues:
1. Validity of the order passed by the Assessing Officer and Commissioner Income Tax Appeals.
2. Violation of principles of natural justice by not providing a reasonable opportunity of being heard.
3. Non-service of notices under Section 148/143(2)/142(1) during assessment proceedings.
4. Reopening of assessment without complying with statutory conditions under Section 147 read with Section 148 of the Act.
5. Insufficiency of reasons recorded for reopening the assessment under Section 147 of the Act.
6. Reopening of assessment proceedings based on material collected without giving the assessee an opportunity to rebut.
7. Addition of cash deposits and investment in agricultural land.
8. Confirmation of additions without direct evidence but based on presumption and assumption.
9. Passing the order without discussing the merits of the case in violation of section 250(6) of the Act.
10. Allegation of double addition in the case of investment in agricultural land.

Analysis:
1. The appeal was filed against the impugned order under Section 147/148 of the Income Tax Act, 1961 for the year 2011-12. The grounds of appeal raised various issues regarding the validity of the orders passed by the Assessing Officer and Commissioner Income Tax Appeals. The appellant challenged the legality of the actions taken and alleged violations of natural justice.

2. The counsel for the assessee contended that no notices were served during the assessment proceedings, leading to an ex-parte assessment and subsequent additions under Sections 69 and 68 of the Act. The appellant submitted an Affidavit stating the non-receipt of notices under Section 133(6)/148/142(1) for the relevant assessment year. The matter was brought to light before the Tribunal, emphasizing the importance of due process and the right to be heard.

3. The Tribunal observed that the initiation and assessment were carried out without serving statutory notices, resulting in a gross violation of natural justice. The lack of opportunity for the assessee to represent their case before the authorities necessitated the matter to be remanded back to the Assessing Officer for a fresh decision in accordance with the law. The legal issues, including the validity of the assessment under Section 147/148, were to be re-examined.

4. The Departmental Representative did not object to remanding the matter back to the Assessing Officer for a fresh decision. The Tribunal, in the interest of substantial justice, directed the assessee to comply with the notices and substantiate their case before the Assessing Officer. The appeal of the assessee was allowed for statistical purposes.

5. The judgment highlighted the significance of adherence to procedural requirements and principles of natural justice in assessment proceedings. The decision underscored the importance of providing a fair opportunity for the assessee to present their case and the consequences of non-compliance with statutory obligations in the assessment process.

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