CIT(A) Ignores Reply & Computation Showing Income Variation: ITAT Remands for Denovo Adjudication [Read Order]

The Indore Bench of the Income Tax Appellate Tribunal (ITAT) in its recent ruling set aside an order passed by theCommissioner of Income Tax (Appeals) ( CIT(A) ) and remanded the matter for denovo adjudication as CIT(A) had not considered the reply and the computation sheet showed a variation in the assessed income.

The appellant Mehi Power Transformers, filed this appeal under section 253 of the Income Tax Act, 1961 against the order CIT(A) for the Assessment Year (AY) 2018-19.

The appellant’s total income eligible for tax was computed and assessed at ₹1,08,56,463 as per the assessment order made under section 144 read with section 143(3A) and 143(3B) of the Act. The returned income was ₹ 82,13,230 and consequently the addition of ₹ 26,43,233 was made.

The appellant being aggrieved by the assessment preferred an appeal before the CIT(A), who dismissed the appeal on the ground that the appellant had not filed any documents in support. It was also recorded that three opportunities were afforded to the assessee to substantiate.

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The counsel for the appellant Sudhir Padliya, submitted that the order passed by the CIT(A) is bad in law, illegal and not proper. It was further contended that, before the CIT(A) the assessee had made an exhaustive reply along with the documents but the CIT(A) held that no documents were filed.

The appellant also submitted an acknowledgement receipt as proof of filing the reply dated 02 December 2024. Additionally, the appellant produced a computation sheet showing the total income at ₹1,38,50,754, rather than ₹1,08,56,463 as assessed by the Assessing Officer.

The counsel for the revenue Ashish Porwal, stated that since the assessee had shown proof of filing the reply along with supporting documents, the matter could be reconsidered by the CIT(A). He further submitted that the case should be sent back to the file of the CIT(A) for denovo adjudication.

The bench comprising B.M. Biyani (Accountant Member) and Paresh M Joshi (Judicial Member) observed that the CIT(A) had recorded that the submission of the assessee was not accompanied by any documents. However, this was contradicted by the assessee who demonstrated that all documents were duly uploaded on the portal and in support had placed the relevant acknowledgement receipt.

In view of this, the bench held that the order was passed in violation of the principles of natural justice. Accordingly, the order was set aside and the matter was remanded on a denovo basis with a direction to the CIT(A) to pass a well reasoned order on merits after giving full and complete opportunity to the assessee.

Further liberty was given to the assessee to bring to the notice of the CIT(A) any other document relevant to the assessment proceedings and any error in the tax calculation sheet could also be pointed out to the lower authorities as the assessee deemed fit and proper.

Accordingly, the appeal was allowed for statistical purpose.

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