The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has quashed an assessment order and asked the AO to re-consider the matter afresh by observing that the closure of business is a reasonable cause for non-cooperation of assessee with the income tax proceedings.
The assessee, Balex Private Ltd, is engaged in the business of manufacturing of Aluminium Sections. For the relevant year, the Assessing Officer made an addition on account of unsecured loan of Rs. 93,95,000/- and also rejected book result of Rs. 6,05,998/-. On appeal, the Tribunal remanded the matter back to the AO for fresh consideration. However, the notice served in terms with such order was not received by the assessee. Consequently, the AO confirmed the addition made in the earlier Assessment Order as the assessee has not produced required details and informations called in the notice issued under Section 142(1).
The Tribunal bench comprising Shri Pramod M Jagtap, Vice President and T.R. Senthil Kumar, Judicial Member observed that the assessee came to know about the issuance of notice when the Authorised Representative was served with the notice during his visit to the Income Tax Department for some other case.
“In fact, the last notice dated 11.12.2018 fixing case for hearing on 18.12.2018 when this was communicated by the Authorized Representative to the assessee, thereby a letter dated 28.12.2018 was filed seeking for time to represent the case. As the business operations had been closed down and there was no full time accountant to deal with the subject matter are the reason for seeking further time, which are bona fide in nature. In the above circumstances the additional evidences to be taken on record and appropriate orders to be passed and assessee is also undertaking to appear before the AO and cooperate with the assessment proceeding,” the Tribunal said.
Shri Parimalsinh B Parmar appeared for the assessee.
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