No Clear Finding on Merits: ITAT Directs CIT(A) to Decide the Matter Afresh [Read Order]

The Lucknow bench of Income Tax Appellate Tribunal (ITAT) has recently restored a case of an assessee to the file of the Commissioner of Income Tax (Appeals) in the absence of any clear findings on the merits of addition of income.

The assessee filed his return of income declaring a total income of  ₹18,03,210 in the status of individual. The case was selected for scrutiny through Computer Assisted Scrutiny Selection (CASS) and a notice was issued to the assessee u/s 143(2) of the Income Tax Act, 1961. In response to the statutory notices, the assessee furnished the requisite information but the information was not found to be satisfactory. Therefore, the cash deposited in the bank account amounting to Rs.43,00,000/- was treated as unexplained income by the Assessing Officer.

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Accordingly, the same was added into the revenue of the assessee. Aggrieved by this, an appeal was preferred by the assessee before the CIT(A). Since there was no effective representation before the CIT (A), therefore, an ex parte order was passed thereby sustaining the addition. The CIT (A) observed that the appellant remained non-compliant and non-serious in prosecuting his appeal only for the purpose of hiding the facts and to conceal the truth. Hence, the present appeal was filed by the assessee.

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Chartered Accountant Samrat Chandra, appearing for the assessee, contended that he was not afforded an effective opportunity to represent his case before both the lower authorities which led to the passing of an ex-parte order against the assessee. He further prayed that the matter be remanded back to the authorities below with direction to provide him an adequate opportunity of being heard.

The Departmental Representative, Sanjeev Krishna Sharma, appearing for the revenue, supported the orders passed by the lower authorities. It was his contention that sufficient opportunities were provided to the assessee to represent his case.

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The bench comprising of Kul Bharat (Vice President) and Anadee Nath Mishra (Accountant Member), on a perusal of the order passed by CIT(A) observed that no clear finding has been given by the appellate authority on the merits of addition except for sustaining the addition made by the assessing authority. Therefore, on a consideration of facts and to sub-served the principles of natural justice the impugned orders passed by the lower authorities were set aside. In order to maintain a fair play between both the parties, the matter was restored to the file of the CIT(A) for decision on merits. Thus, the grounds of the appeal were allowed for statistical purposes.

Hence, the appeal of the assessee was allowed. 

To Read the full text of the Order CLICK HERE

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