Non- Compliance to Order of CIT(A) cannot be Sole Reason to Allow Addition on C: ITAT Sets Aside Ex Parte Order [Read Order]

The Chandigarh Bench of Income Tax Appellate Tribunal (ITAT) held that non compliance to the order of Commissioner of Income Tax (Appeals) [CIT (A)] during the entire proceedings cannot be the sole reason to allow addition on income tax return filed. Consequently, the ITAT overturned the previous order and reinstated it for a fresh assessment.

In this case the Central Processing Unit (CPC), Bangalore has processed the assessee Iqbal Singh’s return of income under Section 143(1) of the Income Tax Act, 1961 by creating a demand of Rs.22,16,870 after giving credit of Rs.25,35,014 of tax  deducted at source as against the amount of Rs.42,88,612 claimed by the assessee. The Assessing Officer issued an order for addition of Rs. 1,76,41,713 made to the return filed.

Aggrieved by the order assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT (A)], which dismissed the assessee’s appeal without entering into the merits of the case by observing that the assessee was non compliant during the entire proceedings and further stated that the assessee was required to furnish the required documents but the assessee had only filed adjournment applications on those given dates.

The assessee has approached the Tribunal and contended that the Commissioner of Income Tax (Appeals) gravelly erred in deciding the appeal exparte without affording reasonable opportunity of being heard and not considering the adjournment letter of the appellant seeking more time as the documents required for the preparation of the case.

The ITAT Bench comprising of Sudhanshu Srivastava , Judicial Member and  Vikram Singh Yadav, Accountant Member observed that the CIT(A) has passed the ex-parte order as according to it, the assessee was non-compliant during the whole proceedings before it, therefore one more opportunity should be given to the assessee to protect the interest of justice as the CIT(A) has not decided the appeal on merits. 

Therefore, the Tribunal overturned the decision made by the Commissioner of Income Tax (Appeals) [CIT (A)] and returned the appeal back to the CIT (A) with instructions to reevaluate the case, granting the assessee a fair and ample opportunity to present their arguments. The Tribunal also instructed the assessee to cooperate fully throughout the proceedings.

To Read the full text of the Order CLICK HERE

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