The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) directed the assessing officer to re-adjudicate the addition made without giving the sufficient opportunity of hearing to the assessee.
S.B. Traders, the appellant assessee appealed against the order passed by the Commissioner of Income Tax (Appeals) for compensation of the addition made by the assessing officer based on the alleged peak credit balance in the bank account of the assessee.
Sanjay Mody, the counsel for the assessee contended that the notices for the date of the hearing were sent to the assessee through speed post and the assessee did not receive any speed post or letter from the Commissioner.
It was further submitted that the assessee being a small trader was not aware of the nitty-gritty of the income tax proceedings. Therefore the assessee may be given one more opportunity to present his case before the assessing officer.
N. T. Sherpa, the counsel for the revenue department relied on the decisions made by the lower authorities and contended that the addition made by the assessing officer was as per the law and sustainable.
The bench observed that the assessee was unable to give a reply to the notice issued by the Commissioner and in the interest of justice the assessee needs one more opportunity to present its case before the assessing officer.
The two-member panel comprising Sanjay Garg (Judicial) and Girish Agrawal (Accountant) directed the assessing officer to re-adjudicate the matter by giving the sufficient opportunity of hearing to the assessee while allowing the appeal filed by the assessee.
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