2021 (10) TMI 1243 - AT - Income Tax

Assessment u/s 144A - Ex-parte order - non providing proper opportunity - HELD THAT - On perusal of assessment order, it is revealed that the assessee did not appear but filed some documents/explanation. However, the assessment was completed vide an ex-parte order dated 31.3.2015 passed u/s. 153A/144 of the I.T. Act, 1961, assessing the total income at ₹ 58,11,170/- as against the returned income of ₹ 2691/-, without providing sufficient opportunity to the assessee. Against the assessment order, the assessee appealed before the Ld. CIT(A) who during the appellate proceedings has considered the written submission of the assessee but the main contention that due to some unavoidable circumstances, voluminous documents and paper book were not filed before the AO, was not considered. Keeping in view of the facts and circumstances of the case as explained above, we are of the considered opinion that the orders passed by the Revenue Authorities are against the principle of natural justice and, therefore, the issues involved in the Appeal filed by the assessee deserve to be set aside to the file of the AO to decide the same afresh, under the law, after detailed enquiry/investigation/verification of the each and every evidence. The AO is directed to pass denovo assessment order after allowing proper opportunity to the assessee. AO is also directed to call all relevant documents/evidences including copy of bank statement, copies of cheques/drafts, from the recipient of Odisha Cricket Association through which amounts were received by the Association and collect the entire correspondence and details of the persons/entity/company, who gave the impugned amount to the Orisha Cricket Association. The assessee is also directed to fully cooperate with the AO in the proceedings and did not take any unnecessary adjournment and also produce all the documentary evidences before him to substantiate its case.

Summary

Issues:
Appeal against CIT(A) order for assessment year 2012-13 - Disallowance of bogus expenditure - Addition under section 69A - Addition of unexplained cash credit under section 68.

Analysis:
The appeal was filed against the CIT(A) order for the assessment year 2012-13. The assessee raised grounds regarding the disallowance of bogus expenditure, addition under section 69A, and addition of unexplained cash credit under section 68. The case involved a search and seizure operation under section 132 of the Income Tax Act, resulting in the finding and seizure of incriminating documents. The Assessing Officer framed the assessment under section 144, making various disallowances and additions. The CIT(A) provided partial relief in the case of bogus expenditure but confirmed the other additions, leading to the current appeal.

During the hearing, the AR of the assessed argued that the assessment was ex parte under section 144 without considering detailed submissions due to unavoidable circumstances faced by the company. The AR contended that the CIT(A) did not consider the submissions in the right perspective and confirmed the additions made by the AO. The AR requested an opportunity to submit all required documents for a fresh assessment. The CIT DR supported the lower authorities' orders but did not object to remitting the matter for a denovo assessment.

The Tribunal observed that the assessment was conducted ex parte without providing sufficient opportunity to the assessee. The Tribunal found that the orders passed by the Revenue Authorities were against the principle of natural justice. Therefore, the Tribunal decided to set aside the issues involved in the appeal to the file of the AO for a fresh assessment. The AO was directed to conduct a denovo assessment after a detailed inquiry, investigation, and verification of all evidence. The AO was instructed to collect relevant documents and evidence, including bank statements and correspondence related to the impugned amounts. The assessee was directed to cooperate fully and provide all necessary documentary evidence to substantiate its case.

In conclusion, the appeal of the assessee was allowed for statistical purposes, and the matter was remitted back to the AO for a fresh assessment in accordance with the law.