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2024 (2) TMI 459 - AT - Income TaxAO suo-moto framed the order u/s. 154 and rectified the order - AO framed order u/s. 154 of the Act without affording a reasonable and adequate opportunity of being heard to the assessee, also without being directed by CIT(A) - HELD THAT - CIT(A) has never given direction for reopening / rectifying the error for A.Y. 2009-10. The assessment for A.Y. 2009-10 was completed by the order dated 30.12.2011 framed u/s. 153A r.w.s. 143 (3) of the Act wherein the returned income of Rs. 10952781/- was assessed at Rs. 12328957/-. After receiving the order of the CIT(A) for A.Y. 2010-11 the AO suo-moto framed the order dated 21.07.2015 u/s. 154/250/ 153A/143 (3) of the Act and made the addition of Rs. 42382000/-. This was challenged before the CIT(A) on the ground that the AO could not have framed any order u/s. 154 of the Act without affording a reasonable and adequate opportunity of being heard to the assessee more so when the CIT(A) in A.Y.2010-11 did not give any direction for reopening / rectification of order for A.Y. 2010-11. After considering the facts and the submissions the CIT(A) was convinced and held that the impugned rectification order is not sustainable. Before us the DR could not point out any factual/ legal error or infirmity in the findings of the CIT(A). . The AO has assumed the powers conferred upon him by the provisions of section 154 of the Act and rectified the order suo-moto without affording any opportunity of being heard to the assessee. Decided against revenue.
Issues involved:
The appeal by the revenue against the order of the CIT(A)-27, New Delhi dated 23.05.2022 pertaining to A.Y. 2009-10. Issue 1: Addition of undisclosed sales in A.Y. 2009-10 The revenue contested the deletion of an addition of Rs. 4,23,82,000/- made on account of undisclosed sales in A.Y 2009-10, based on the order of Ld. CIT(A) passed for A.Y 2010-11. The CIT(A) held that any addition should be restricted to entries related to the assessment year under consideration. The AR of the appellant argued that entries amounting to Rs. 3,88,50,000/- related to the year under consideration, while Rs. 4,23,82,000/- related to A.Y. 2009-10 and Rs. 59,00,000/- to A.Y. 2008-09. The AO, without direction for rectification for A.Y. 2009-10, made an addition of Rs. 4,23,82,000/- in a subsequent order, which was challenged before the CIT(A). The CIT(A) found the rectification order unsustainable, as the AO rectified the order without affording an opportunity to the assessee. The Tribunal, after careful consideration, upheld the CIT(A)'s decision, noting that no direction was given for rectification for A.Y. 2009-10 in the A.Y. 2010-11 order. The AO's rectification without hearing the assessee was deemed improper, leading to the dismissal of the revenue's appeal. The legal judgment by the Appellate Tribunal ITAT DELHI addressed the issue of the revenue's appeal against the deletion of an addition of undisclosed sales in A.Y. 2009-10. The Tribunal upheld the CIT(A)'s decision, emphasizing the importance of affording the assessee an opportunity to be heard before making rectifications, especially when no specific direction for rectification was given in a previous order.
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