AO made One Sided Addition u/s 68 without Examining Evidence: ITAT Remits ₹7.17 Matter for Fresh Adjudication [Read Order]
The Tribunal set aside an addition of Rs. 7.17 crore under Section 68 of the Income Tax Act, 1961, citing inadequate examination of evidence by the lower authorities, and remanded the matter to the Assessing Officer for fresh adjudication
AO made One Sided Addition u/s 68 without Examining Evidence
AO made One Sided Addition u/s 68 without Examining Evidence
The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has set aside an addition of Rs. 7,17,35,323/- made under Section 68 and directed the Assessing Officer (AO) to conduct a fresh adjudication with proper consideration of evidence.
Anil Kumar Chauhan (assessee), faced an ex-parte assessment order for the Assessment Year 2019-20, wherein the AO made an addition of Rs. 7,17,35,323/- under Section 68 (unexplained cash credits).
Aggrieved by the AO’s order, the assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)]. The assessee sought to introduce additional evidence under Rule 46A to substantiate his case.
The CIT(A) rejected the request for admission of additional evidence, concurring with the AO’s remand report that there was no reasonable cause for the assessee’s failure to submit evidence earlier. The CIT(A) upheld the addition without considering the additional evidence.
Aggrieved by the CIT(A), the assessee appealed to the ITAT. The Revenue defended the CIT(A)’s decision, arguing that the assessee’s non-compliance with the AO’s notices justified the ex-parte addition and the dismissal of additional evidence.
The two-member bench comprising Shri Mahavir Singh (Vice President) and Shri Amitabh Shukla (Accountant Member), observed that the CIT(A)’s rejection of additional evidence under Rule 46A was not supported by concrete facts and was largely speculative.
The Tribunal noted that in absence of evidence the AO made an one sided addition. It also observed that an adequate opportunity to be heard is a fundamental right of every litigant which cannot be violated under any circumstances.
The Tribunal further held that the AO’s ex-parte addition and the CIT(A)’s confirmation without considering evidence were void ab initio, as they violated principles of natural justice. It set aside the orders of the lower authorities and remanded the matter to the AO for de novo adjudication.
The bench directed the AO to provide the assessee with a fair opportunity to present evidence and pass a speaking order in accordance with the law. It instructed the assessee to comply with the AO’s notices, with a warning that non-compliance could be viewed adversely.
The appeal of the assessee was allowed for statistical purposes.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
