2022 (4) TMI 150 - AT - Income Tax

Best judgment assessment u/s 144 - Unexplained expenditure u/s. 69-C and on account of unexplained investment u/s. 69 - Additional evidences produced by the assessee during the course of appellate proceedings - HELD THAT - As per the mandate of Rule 46A(3), learned Commissioner (Appeals) is duty-bound to give an opportunity to the Assessing Officer to examine the fresh evidences filed by the assessee and have his say on the authenticity of such evidences, however, prima face, it appears that no such opportunity was extended to the Assessing Officer. Purely based on the submissions made and the evidences furnished at the appellate stage, learned Commissioner (Appeals) has deleted the additions. Thus, in our view, not only there is gross violation of Rules of Natural Justice but the mandate of Rule 46A(3) has been bypassed. In view of the aforesaid, we are inclined to set aside the impugned order of learned Commissioner (Appeals) and restore the issues to the file of learned Commissioner (Appeals) for de novo adjudication. It is made clear, in case learned Commissioner (Appeals) intends to rely upon any fresh evidence filed by the assessee in course of appellate proceeding, he must provide opportunity to the Assessing Officer to examine them and submit a report on the acceptability or otherwise of assessee's claim based on such evidence. Needless to mention, the assessee must also be given a fair opportunity of being heard before deciding the issues. Grounds are allowed for statistical purposes.

Summary

Issues:
1. Lack of representation by the assessee leading to an ex-parte disposal of the appeal.
2. Dispute regarding additions made by the Assessing Officer and subsequent deletion by the Commissioner (Appeals).
3. Alleged violation of Rule 46A(3) and Rules of Natural Justice in the appellate proceedings.

Analysis:
1. The judgment pertains to an appeal by the Revenue against an order of the Commissioner of Income Tax (Appeals) for the assessment year 2014-15. Despite multiple hearing dates and notices, the assessee did not appear, indicating a lack of interest in pursuing the appeal. Consequently, the Tribunal proceeded to dispose of the appeal ex-parte due to the assessee's continuous absence.

2. The primary issue revolved around the additions made by the Assessing Officer totaling ?21,76,39,374, resulting in a total income of ?23,38,81,650. The Commissioner (Appeals) deleted these additions after considering the submissions and evidences presented by the assessee during the appellate proceedings. The Departmental Representative argued that the assessee did not provide any evidence during the assessment proceedings to reconcile discrepancies, and the Commissioner (Appeals) deleted the additions without allowing the Assessing Officer to examine the new evidence. This led to a challenge based on the alleged violation of Rule 46A(3).

3. The Tribunal acknowledged that the Assessing Officer had issued notices seeking clarification from the assessee, who failed to respond, leading to the assessment being completed to the best of the officer's judgment. However, the Tribunal noted that the Commissioner (Appeals) deleted the additions based solely on the submissions and fresh evidence provided by the assessee during the appellate stage. This action was deemed to violate the rules of natural justice and Rule 46A(3). Consequently, the Tribunal set aside the Commissioner (Appeals) order and remanded the issues for fresh adjudication, emphasizing the need for the Assessing Officer to have an opportunity to examine any new evidence presented by the assessee.

In conclusion, the Tribunal allowed the appeal for statistical purposes, highlighting the importance of adherence to procedural rules and principles of natural justice in income tax assessment and appellate proceedings.