ITAT Restores Appeals to AO for Reassessment Due to Incomplete Evidence Submission [Read Order]

In a recent case, the Cuttack Bench of the Income Tax Appellate Tribunal ( ITAT ) allowed the appeal of the assessee and directed the Assessing Officer ( AO ) to reassess the appeals for the assessment years (AY) 2007-08, 2008-09, and 2009-10. The Tribunal rejected the limitation issue for AY 2007-08 and mandated a fresh assessment. The AO was instructed to review all evidence and issue detailed orders.

Hi-tech Estates and Promoters Pvt Ltd., the appellant-assessee, filed appeals against the separate orders passed by the Commissioner of Income Tax (Appeals) [CIT(A)] for the AY 2007-08, 2008-09, and 2009-10.

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The counsel for the assessee filed an adjournment request on 31.7.2024 to postpone the appeals due to health issues of the counsel. The appeals were decided based on existing submissions, and the adjournment request was denied.

The assessee submitted that for the assessment years 2007-08, 2008-09, and 2009-10, the AO made additions due to the assessee's inability to produce evidence regarding customer advances and other additions. Appeals were filed, and the Tribunal restored the issues to the AO for re-adjudication for the assessment years 2007-08 and 2008-09, and for the AY 2009-10.

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The assessee also claimed that the AO did not comply with the Tribunal’s orders and that the assessment order for 2008-09 was time-barred, as it was served only on 13.01.2010. It was further argued that the AO ignored the evidence provided by the assessee and requested that the assessment orders be quashed and the additions deleted.

The Department counsel argued that the CIT(A) found no evidence was produced by the assessee, so the assessment orders should be upheld. For 2007-08, the Tribunal’s re-adjudication made the limitation issue irrelevant. For 2008-09, the order under Section 254 was issued after the ITAT’s order, and the earlier order merged into the final order dated 31.10.2018.

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The Tribunal reviewed the submissions and noted that for the assessment year 2007-08, the original assessment order dated 29.12.2009 was confirmed by the CIT(A)-2, Bhubaneswar.

The Bench noted that the Tribunal had set aside the issues for all years to the AO for re-adjudication. For the AY 2008-09, the status of orders related to Section 263 was unclear. Regarding the time bar claim for the AY 2007-08, since the Tribunal had restored the assessment order for re-adjudication, the limitation issue was effectively resolved.

Although there was a delay in serving the order, the order itself had been issued within the time frame specified. Therefore, the limitation issue for the AY 2007-08 was rejected.

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Additionally, the tribunal observed that the facts were not clearly presented in the various orders. It was also admitted that the assessee had not provided all necessary details to the AO or in the paper book filed before the tribunal. While the assessee produced various orders from different authorities, no concrete evidence was presented.

The Division Bench, George Mathan (Judicial Member) and Manish Agarwal (Accountant Member), restored the appeals to the AO for re-adjudication. The assessee was directed to cooperate fully and provide all necessary details. The AO was to consider all evidence and issue detailed orders for the three years under appeal, including consequential orders.

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