SUPRIYA ANURAG KHANNA,LUDHIANA vs. INCOME-TAX OFFICER-WARD-2(3), HUBBALLI

PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER:

“1. That the Worthy CIT(A) erred on facts and in law in upholding the order of the Assessing Officer having been passed in haste without proper application of mind:

2. That the Worthy CIT(A) erred on facts and in law in upholding the illegal assumption of jurisdiction by the Assessing Officer in issuing notices for framing of the assessment u/s 143(3).

3. That the Ld CIT(A) erred on facts and in law in upholding the order passed u/s 143(3) which is illegal, bad in law as having been passed by an Assessing Officer who did not have jurisdiction to do so. 4. That the Worthy CIT(A) erred on facts and in law in upholding the addition of Rs 30,53,908/- made by the Assessing Officer completely overlooking the documentary evidences filed during the course of the assessment proceedings. 5. That the Worthy CIT(A) erred on facts and in law in upholding the addition of Rs.26,88,300/- made by the Assessing Officer completely overlooking the documentary evidence filed during the course of the assessment proceedings. 6. That the CIT(A) erred on facts and in law in upholding the assessment order which had been passed in complete violation of principles of natural justice. 7. That the appellant reserves the right to amend/add any ground! grounds of appeal, in addition to aforesaid at the time of hearing or before hearing of the said appeal.”

2. The brief facts of the case are that the assessee is trading in Yarn & Knitted cloth and is the proprietor of Technitex, F131, Focal Point, Phase-8, Ludhiana. Previously the assessee was residing at Dandeli, Karnataka and notice u/s 143(2) was sent to Dandeli address at Type-1, Room No.84, Bangur Nagar, Dandeli as per her PAN address. However, the notice returned unserved and subsequently other statutory notices were issued to the assessee. During the course of assessment proceedings, the AO noted that the assessee has not furnished confirmation in respect of two creditors viz., Maya Export and Modern Processors Pvt. Ltd. for Rs.22,64,500 and Rs.7,89,408/-. Hence he made addition of Rs.30,53,908. The AO further observed that the assessee furnished confirmation from Shri Banke Bihari Aggarwal, resident of Delhi, towards transfer of sum of Rs.26,88,300/- from his bank account to the assessee’s capital account on 7.2.2013 as interest free loan. The AO observed that it is to be treated as unsecured loan in the balance sheet and cannot be taken to the capital account of assessee. Therefore, he made addition of Rs.26,88,300 to the total income of the assessee.

3. Aggrieved from the above order, the assessee field appeal before the CIT(A).

4. The CIT(A) issued notices on various dates on the PAN address as well as the address quoted in the Income-tax return but the assessee failed to respond to the notices. Accordingly, the CIT(A) confirmed the order of the AO and dismissed the appeal.

5. The ld.AR submitted that the CIT(A) has decided the issue ex-parte and without considering the legal issue as well as merits of the case and he also submitted that no notice for hearing before the CIT(A) was received by the assessee. Therefore, the matter may be sent back to the file of the CIT(A) for fresh consideration.

6. On the other hand, the ld.DR relied on the orders of the lower authorities and submitted that ample opportunities were granted but assessee was unable to avail the benefit.

7. Considering the rival submissions, we note that the CIT(A) has issued notices on different dates as per para No.3.1 of his order on both addresses of the assesses. The assessee did not appear before the CIT(A). The assessee has raised legal issue in ground No.2 and 3 which needs to be adjudicated at the level of CIT(A). We notice that the CIT(A) has not decided the issue on merits. Therefore, in the interest of justice, we remit back the issue to the file of CIT(A) for fresh consideration in accordance with law after giving reasonable opportunity of being heard to the assessee. The assessee is directed to provide correct address and correct e-mail for communication and required documents to substantiate his case. The assessee shall not seek unnecessary adjournment for early disposal of the case.

Order pronounced in the open court on 12th July, 2023 Sd/- Sd/- (George George K) (Laxmi Prasad Sahu) Vice President Accountant Member Bangalore, Dated 12th July, 2023 Vms Copy to:

Date of Dictation ………………………………………

8. Date on which the file goes to the Bench Clerk …………………..