The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) remanded back for fresh adjudication to the Commissioner of Income Tax (appeals)[CIT(A)] after a delay of four years for disposing of the appeal citing a violation of natural justice.
Gold Palace Jewellers, (assessee) a partnership firm engaged in the business of dealing in gold and diamond jewelry, filed its income tax return for the assessment year 2017-18, declaring an income of Rs. 24,89,750. The case was selected for scrutiny under the Computer-Assisted Scrutiny Selection (CASS), focusing on the source of cash deposits made during the demonetization period.
The Assessing Officer (AO) found that the assessee had deposited Rs. 2,44,46,257 in cash, for which satisfactory justification was not provided. Therefore, the AO treated the deposit as unexplained money under Section 69A of the Income Tax Act and added the amount to the taxable income.
Aggrieved by the order, the assessee filed an appeal before CIT(A). The Notices were issued to the assessee during the COVID pandemic. The appeal was pending for 4 years.
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Despite the delay, the CIT(A) disposed of the appeal and confirmed the assessment order without granting a proper hearing. Aggrieved by the order, the assessee filed an appeal before ITAT.
The counsel for the assessee argued that the delay in adjudication and the lack of a reasonable hearing before CIT(A) was a violation of the Principle of Natural Justice. The counsel submitted that a fair opportunity to present evidence was denied.
On the other hand, the counsel for the revenue supported the findings of lower authorities and sought to dismiss the appeal.
The two-member bench comprising Keshav Dubey (Judicial Member) and Waseem Ahmed (Accountant Member) observed that CIT(A) had taken a long time for four years to decide the matter without granting a fair hearing.
The tribunal set aside the order of CIT(A) and remitted the matter for fresh adjudication. The tribunal directed the CIT(A) was directed to grant a reasonable opportunity to the assessee to present their case.
The tribunal further directed the assessee to submit all necessary documents and not to seek adjournments. The appeal of the assessee was partly allowed for statistical purposes.
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