What did the Tribunal hold?

The Tribunal held that justice would be better served by remanding the case back to the Assessing Officer to adjudicate all issues afresh after providing opportunities for hearing. The CIT(A)'s action of accepting additional evidence without allowing the AO to respond was noted.

The Revenue and assessee filed cross-appeals against the CIT(A)'s order concerning AY 2011-12. The Assessing Officer had passed an ex-parte assessment order, and the assessee filed additional evidence before the CIT(A) without giving the Assessing Officer an opportunity to rebut it.

What were the issues?

Whether the CIT(A) erred in accepting additional evidence without providing the Assessing Officer an opportunity to rebut it, and whether the ex-parte assessment order necessitates a fresh adjudication.

Acp Industries Limited vs DCIT | ITAT Hyderabad 2021

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

For Assessee : Shri K.A.Sai Prasad, AR For Revenue : Shri Y.V.S.T.Sai, CIT-DR Date of Hearing : 05-10-2021 Date of Pronouncement : 27-10-2021 O R D E R PER S.S.GODARA, J.M. : These Revenue’s and assessee’s cross appeals for AY.2011-12 arise against the CIT(A)-1, Hyderabad’s order(s) dated 20-10-2017 in appeal Nos.0340 / CIT(A)-1 / Hyd / 2014-15 / 2017-18, involving proceedings u/s.143(3) of the Income Tax Act, 1961 [in short, ‘the Act’]; respectively. Heard both the parties. Case files perused.

The Revenue’s and assessee’s respective pleadings herein challenge correctness of the CIT(A)’s action deleting disallowance of trade discount on sales of Rs.4,39,72,368/- and upholding Section 14A disallowance of Rs.23,98,438/-, notional interest disallowance/addition of Rs.1,92,67,755/-, un-accounted income of Rs.6,16,37,930/- and un-secured

:- 2 -: & 267/Hyd/2018 loans of Rs.6,94,01,241/-; appeal-wise respectively. It next transpires during the course of hearing that the Assessing Officer had passed his assessment order on 28-03-2014 ex-parte which prima facie indicates that the assessee could not produce all the relevant supportive material regarding all the foregoing issues. It appears to have filed its additional evidence before the CIT(A) only which stands partly accepted without granting any opportunity to the Assessing Officer to rebut the contents thereof which leaves both the parties; and more particularly the department aggrieved, in foregoing terms. Faced with this situation, and more so when the assessee had filed its additional documents before the CIT(A) which were never forwarded to the Assessing Officer for factual verification under Rule 46A of the Income Tax Rules, we are of the opinion that larger interest of justice would be met in case the assessing authority herein adjudicates all these issues afresh within three effective opportunities of hearing. We order accordingly. The Revenue’s and assessee’s respective substantive grounds are allowed for statistical purposes.

These Revenue’s and assessee’s cross appeals are treated as allowed for statistical purposes in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 27th October, 2021 Sd/- Sd/- (LAXMI PRASAD SAHU) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 27-10-2021 TNMM

:- 3 -: & 267/Hyd/2018

ACP INDUSTRIES LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(1), HYDERABAD

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