The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) recently set aside the addition of Rs.46,58,891/- made to an Income Tax Assessment passed under Sections 144 and 147 of the Income Tax Act, 1961 in light of the lack of opportunity provided to the Assessee to adduce evidence to contest his case.
The instant Income Tax Appeal had been filed by the Assessee, Israr Ahmed on the basis of an Assessment Order dated 26.03.2015 passed under Sections 147 and 144 of the Income Tax Act, 1961, whereby an addition Rs.46,58,891/- on account of unexplained income from undisclosed sources was made towards the income of the Assessee for the Assessment Year (A.Y.) 2008-09.
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The addition made by the jurisdictional Assessing Officer (AO) was contested before the Commissioner of Income Taxes ( CIT(A) ), who pursuantly dismissed the Appeal and enhanced the addition made by the AO.
The Appellant-Assessee, represented by Neeraj Jain & P. K. Mishara while instituting the present appeal raised numerous grounds, including claims that the CIT(A) had erred in not quashing the Assessment Order and enhancing the disputed addition to Rs.1,17,79,860/-. Furthermore, the Appellant asserted that the CIT(A) had not considered the submissions made by the Assessee and failed to make any efforts to determine the true source of income prior to passing their Order.
Om Prakash, Senior Departmental Representative for the Revenue wholly relied on the decision and reasoning rendered by the lower authorities while seeking dismissal of the present Appeal.
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The two-member Bench of the Income Tax Appellate Tribunal, New Delhi constituted by S. Rifaur Rahman, Accountant Member and Shri Yogesh Kumar U.S., Judicial Member, considered the submissions on record and observed that the Assessment Order had been framed against the Assessee on ex-parte basis under Sections 144 and 147 of the Income Tax Act, 1961.
The ITAT deemed such an ex-parte Order without provision of adequate opportunity to the Assessee to produce documents to substantiate their position and claim before the AO to be in contravention to the interests of justice.
In light of such observation, the ITAT remanded the case back to the Assessing Officer while issuing directions to conduct the assessment afresh, and in accordance with law after providing due opportunity of hearing to the Assessee.
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