Failure by Authorities to provide necessary Documents Results in Denial of Justice: ITAT directs AO to provide Requisite Documents to Assessee for Reasonable Opportunity [Read Order]

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) restored the file back to the Assessing Officer (AO) with the direction to provide the requisite documents as asked for the Assessee and a reasonable opportunity to the Assessee to substantiate its case.

The Assessee before the revenue authorities claimed to be a farmer and working as a Govt. Officer and had shown it’s total income of Rs. 3,71,747/- on account of agriculture income beside salary and interest income, by filing it’s return of income on dated 31st July, 2010.

Subsequently, on the basis of the information received from the DGIT (Inv) Mumbai, to the effects that the Assessee has made cash payment of Rs. 5,00,000/- to Cosmos Group against booking of flat no. 19A, during the year under consideration.

The statement recorded on oath of Shri. Manish Mehta, Director of said concern, wherein he has admitted his undisclosed income relating to the ‘on money’ paid by the Assessee, which was unearthed during the search action. Accordingly, after recording the reasons and issuing the statutory notice dated 30th March 2016 under Section 148 of the Income Tax Act, 1961,  the case of the Assessee was re-opened.

In response said notice, the Assessee claimed that the return of income already filed by the Assessee, be considered as the return filed in response to the notice under Section 148 of Income Tax Act. Subsequently, by issuing the statutory notices, the Assessee was show caused as to why the ‘on money’ paid to Cosmos Group for booking of flat should not be added to the total income of the Assessee as undisclosed income.

In response to show cause the Assessee by filing letters dated 23rd & 26 December, 2016 claimed that the Assessee had not paid any cash to the Cosmos Group or the builder Concorde Developer as alleged. The payments have been made through banking channels.

The Assessee further requested to provide the copy of the incriminating documents against the Assessee as allegedly recovered in search of Cosmos Group or Concorde Developers And stated the no enquiries were made with the Assessee or any such information was gathered by the AO, during such proceedings of Cosmos Group.

The Assessing Officer though treated the cash payments of the Rs. 5,00,000/- allegedly made by the Assessee to M/s. Cosmos Group as income u/s.69 of the Act being investment made in property for the amount, not recorded in books of account maintained. On appeal the Commissioner affirmed the said addition made by the AO. The Assessee being aggrieved preferred appeal before the tribunal.

After hearing both the parties, the tribunal observed that it was clear that the Assessee had specifically requested for the details or copy of any incriminating documents found against the Assessee as alleged during the search of Cosmos Group or Concorde Developers qua booking of flat. The Assessee had also claimed that no enquiries were made with the Assessee or no such information was gathered by the AO during the search proceedings of Cosmos Group however both the authorities below failed to provide the requisite documents.

The two member bench consisting of B R Baskaran (Accountant member) and N.K Chodhry (Judicial member) ordered to remand the instant case to the file of the Assessing Officer with the direction to provide the requisite documents as asked for the Assessee and a reasonable opportunity to the Assessee to substantiate its case.

Thus the appeal was allowed.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates