2021 (6) TMI 846 - AT - Income Tax

Ex parte order confirming the order passed by the AO determining the total income as against the returned loss - HELD THAT - It is an admitted fact that despite number of opportunities granted by the CIT(A), the assessee did not appear before him for which the CIT(A) was constrained to pass the ex parte order. As submission of the ld. Counsel for the assessee that given an opportunity the assessee is in a position to explain his case before the ld. CIT(A). We deem it proper to restore the issue back to the file of the CIT(A) with a direction to grant one final opportunity to the assessee to substantiate its case and decide the issue as per fact and law. The assessee is also hereby directed to appear before the CIT(A) and explain its case without seeking any adjournment under any pretext failing which, the ld. CIT(A) is at liberty to pass appropriate order as per law. Thus we hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

Summary

Issues:
Appeal against ex parte order of CIT(A) confirming AO's determination of total income.

Analysis:
The appeal was filed against an ex parte order of the CIT(A) confirming the AO's determination of the total income for the assessment year 2011-12. The AO had determined the total income at ?21,21,997/- as opposed to the returned loss of ?46,058/-. The case involved the assessee, a private limited company, receiving funds amounting to ?45 lakhs from various sources, leading to the reopening of the case. The AO specifically questioned the amount received from a construction company and observed significant credits in the assessee's bank statement, suspecting them to be bogus entries to route unaccounted money. Consequently, the AO added ?21,68,055/- to the total income of the assessee. Despite several opportunities, the assessee did not appear before the CIT(A), resulting in the ex parte order.

The Tribunal, after hearing both sides, acknowledged the non-appearance of the assessee before the CIT(A) and the subsequent ex parte order. However, considering the interest of justice, the Tribunal decided to restore the issue back to the CIT(A) with a direction to grant one final opportunity to the assessee to present its case. The assessee was instructed to appear before the CIT(A) without seeking adjournment, with a warning that failure to do so would allow the CIT(A) to pass an appropriate order as per the law. The Tribunal allowed the grounds raised by the assessee for statistical purposes and ultimately allowed the appeal for statistical purposes, directing the assessee to present its case before the CIT(A).

In conclusion, the Tribunal's decision to grant the assessee another opportunity to explain its case before the CIT(A) showcases a commitment to ensuring due process and fairness in the assessment proceedings. The restoration of the issue back to the CIT(A) emphasizes the importance of providing the assessee with a chance to substantiate its claims and defend its position, highlighting the principles of natural justice in tax matters.