“Dragging the assessee to litigation and creating another Demand”: ITAT raps AO and Appellate Authority for failing to examine facts on record [Read Order]

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) quashed an Assessment Order passed by an Assessing Officer under Sections 144 and 147 of the Income Tax Act, 1961. The aforementioned Assessment Order was reopened by the Commissioner of Income Tax (Appeals) (CIT(A)) by issuing a second notice dated 30.03.2016 to the Assessee under Section 148 of the Income Tax Act. The Tribunal in its judgment observed that an earlier assessment order under Section 148 of the Income Tax Act had already been passed under Section 143(3) read with Section 147 of the Income Tax Act on 19.03.2015.

The Tribunal deliberated that the CIT(A) had committed a grave mistake in confirming the order of the Assessment Officer to subsequently reopen the Assessment Order without having tangible evidence to supplement their decision.

Further, the Petitioner contended before the Tribunal that the CIT(A) and the Assessing Officer erred in confirming the reopening of the Assessment order merely based on information received from DGIT(INV), Mumbai and the Sales Tax Department and without tangible proof warranting the reopening of the Assessment Order. The Assessee alleged that the CIT(A) erred in upholding the order of the Assessing Officer in disallowing the purchase from one party claiming that they were ‘bogus purchases’ despite being supplemented with documentary proof such as bank statements, purchase bills, ledger accounts, quantitative details & MVAT returns etc.

The Mumbai Bench of the ITAT panel comprising of Amit Shukla, Judicial Member and Ranesh Nandan Sahay, Accountant Member, further reinforced the Assessee’s position in law by stating that the dismissal of the appeal by the JCIT(A) is a result of a callous approach towards their duty as the CIT(A) dismissed the appeal ex-parte citing grounds of non-prosecution owing to the Assessee not honoring the multiple notices sent by the CIT(A) to the Assessee.

In closing, the Bench further averred that the Assessing Officer and Authority should have paid closer attention to the facts on record and prevented the Assessee from having to pursue unwanted litigation while simultaneously quashing the impugned Assessment Order.

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