CIT(A) Ex-Parte Adding Rs. 12,06,189 as Undisclosed Income: ITAT directs Fresh Hearing [Read Order]

The Jaipur Bench of Income Tax Appellate Tribunal (ITAT) directed a fresh hearing in which the Commissioner of Income Tax (Appeals) [CIT(A)] had earlier dismissed the appeal ex-parte with an addition of Rs. 12,06,189 as undisclosed income.

Jai Prakash Sharma, (assessee) filed his income tax return declaring a total income of Rs. 1,61,190 for the relevant year. The Department initiated proceedings based on information that the assessee had sold gems and jewelry worth Rs. 12,06,189. The inquiry revealed that no gems and jewelry business was being conducted from the premises of the assessee's firm, M/s. Konark Impex.

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The Revenue issued notice to the assessee in order to assess the alleged undisclosed income. However, the assessee failed to file Income Tax Return and also failed to file any other reply in compliance with the notice.

Therefore, the Assessing Officer (AO) completed the assessment and passed an ex parte assessment order. The assessing officer passed the order with an addition of Rs. 12,06,189 to the income.

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Aggrieved by the order of the AO, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. However, the appeal was dismissed by the CIT(A) due to the assessee’s non-appearance during the hearings. Further aggrieved by the order of the CIT(A), the assessee further filed an appeal before the ITAT.

The two-member bench comprising Dr. S. Seethalakshmi (Judicial Member) and Shri Gagan Goyal (Accountant Member), observed that the assessee had failed to appear before both the AO and the CIT(A), which resulted in the ex-parte orders.

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The tribunal observed that the facts and legal contentions were not completely discussed in the earlier proceedings. The Tribunal observed that it was fit to restore the matter to the CIT(A) for a fresh adjudication.

Therefore, the Tribunal directed for fresh hearing before the CIT(A). The tribunal further directed the CIT(A) to provide the assessee with a fair opportunity to present his case. Additionally, the tribunal instructed the assessee to cooperate in the proceedings and avoid unnecessary adjournments. The appeal of the assessee was allowed for statistical purposes. 

To Read the full text of the Order CLICK HERE

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