Ex-parte appellate order passed by CIT(A) based on statement of ...

Tax dispute resurfaces: Firm's contradictions on dissolution vs business closure raise concerns.

Case Laws     Income Tax

November 7, 2024

Ex-parte appellate order passed by CIT(A) based on statement of fact filed by assessee. Second round of litigation regarding whether assessee firm stood dissolved or business discontinued. Disallowance of freight expenses u/s 40(a)(ia). Assessee did not participate in appellate proceedings before CIT(A) for reasons cited in statement of fact. Huge additions made by AO and huge tax demand raised against assessee in second round. Assessee acted negligently during appellate proceedings before CIT(A) but should not be allowed to benefit from its own wrong. CIT(A) passed ex-parte order based on record including statement of fact. Assessee did not comply with CIT(A)'s notices. Act of court should not prejudice anybody. Mandate of 1961 Act is to compute and collect correct taxes. Assessee now arguing against additions before ITAT, filing paper book. Contradictory statements regarding dissolution of firm versus discontinuance of business. Inquiries to be conducted in interest of justice. Appellate order set aside, matter remanded to CIT(A) for fresh adjudication after giving opportunity to both parties u/ss 189(1), 189(3), 189(4) read with Section 176(3).

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