The Ahmedabad Bench of the Income Tax Appellate Tribunal ( ITAT ) set aside the Commissioner of Income Tax’s [CIT(A)] Order for not granting adequate opportunity to present necessary evidence and explanation.
The tribunal directed the CIT(A) to restore the matter back on file to ensure fair adjudication.
Assessee-company filed its income tax return for the assessment year 2016-17 declaring a total income of Rs. 17,97,090. The assessing office scrutinized the filing under CASS and notices were sent in this regard. The assessee failed to comply with the notice which led to the penalty under section 271(1)(b) of the Income Tax Act. The AO passed an order regarding the penalty and noticed that the assessee had submitted it under E-proceedings.
The assessee observed that the assessee had not disclosed the interest income of Rs.5,47,553 and asked the assessee to furnish the details to justify the depreciation claim of Rs. 26,96,496 with proper evidence which the assessee failed to provide the requirements. The AO added the interest of Rs. 5,47,553 under income from other sources and disallowed the depreciation claim of Rs.26,96,496.
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The AO also observed that the assessee had not calculated the value as per Rule 11UA of the Income Tax rules and added Rs. 12,85,900 being the difference between the value as determined by the assessing officer. The AO completed the assessment and passed the order under section 143(3) of the Income Tax Act.
Aggrieved by this order, the assessee appealed before the CIT(A) regarding the addition made by the AO. The CIT(A) dismissed the appeal and upheld the AO assessment order. Aggrieved by this decision, the assessee appealed before the ITAT, Ahmedabad.
The assessee’s counsel argued that the CIT(A) has erred in law and failed to give a fair opportunity to be heard. The assessee’s counsel submitted that due to the CORONA pandemic and the devastating fire in the hotel caused the delay in complying with the CIT(A) notices. The assessee’s counsel requested to restore the matter to the file of CIT(A) as no proper opportunity was given before passing the order. The CIT(A) counsel did not object to the request made by the assessee.
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The two-member bench of Siddhartha Nautiyal (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed arguments of both sides.
The tribunal noted that the CIT(A) did not grant fair opportunity for the assessee. The tribunal observed that the Assessee’s Affidavit and the paper book containing supporting documents need proper verification to ensure fair adjudication. Hence the tribunal directed the CIT(A) to allow the presentation of the evidence and restored the matter on the file.
The tribunal allowed the appeal for statistical purposes.
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