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Facts
The assessee's appeal was against an order dismissing their appeal before the Ld.CIT(A). The original assessment involved additions under sections 68 and 40(a)(ia) of the Income-tax Act. The assessee argued they were denied a reasonable opportunity to submit documents due to insufficient time before the assessment deadline.
Held
The Tribunal found that the appellate authority passed a cryptic order without properly considering the documents submitted by the assessee. The assessee's justification for non-compliance was reasonable given the short timeframe. The Tribunal set aside the assessment proceedings and remanded the matter to the AO for fresh adjudication.
Key Issues
Whether the assessee was denied a reasonable opportunity to present documents during assessment and appellate proceedings, and if the CIT(A) properly considered the submitted evidence.
Sections Cited
250, 1961, 143(3), 68, 40(a)(ia)
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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI ANIKESH BANERJEE & SHRI OMKARESHWAR CHIDARAShri Kartik Natarajan
The instant appeal of the assessee was filed against the order of the National Faceless Appeal Centre, Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2017-18, date of order 04/12/2023.The impugned order was emanated from the order of the Learned Income-tax Officer, Ward-15(3)(2), Mumbai(in short, the “AO”)passed under section143(3) of the Act, date of order 28/12/2019.
The brief facts of the case are that the assessment was completed under section 143(3) and the addition was made under section 68 of the Act amounting to Rs.72,39,190/-& Rs.14,60,000/- and under section 40(a)(ia) of the Act Visible Chits (Maharashtra) Pvt Ltd Rs.4,33,371/-. The aggrieved assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) passed an order in a very cryptic manner by dismissing the appeal of the assessee. Being aggrieved, the assessee filed an appeal before us.
The Ld. AR submitted a written statement comprising pages 1 to 79, which has been placed on record. The Ld. AR argued that all relevant documents were duly submitted before the Ld. AO during the hearing, as evidenced by the letter enclosed in the Assessee’s Paper Book (APB) on pages 8 to 24. Additionally, all pertinent documents have been properly annexed for consideration by the Ld. CIT(A) and are also included in the paper books submitted before the Bench.The Ld. AR further contended that the assessment was completed on 28/12/2019, with the last notice issued on 20/12/2019, directing the assessee to submit documents as per the annexures of the said notice. However, the given period of seven days was insufficient for the assessee to comply, resulting in the assessee's inability to furnish the required documents before the Ld. AO. Meanwhile, as the assessment was approaching its statutory time limit, the Ld. AO proceeded to pass the order without considering those documents.The Ld. AR asserted that the assessee was denied a reasonable opportunity both during the assessment and appellate proceedings. Accordingly, the Ld. AR requested that the matter be remanded to the Ld. AO for proper consideration of the unverified documents.
The Ld.DR vehemently argued and relied on the order of the revenue authorities.
We have heard the submissions of both parties and have carefully examined the documents on record. Upon perusal of the orders passed by the Visible Chits (Maharashtra) Pvt Ltd lower authorities, we find that the assessee had duly submitted all relevant documents. However, the appellate authority, without properly considering these documents, passed the order in a cryptic manner, drawing conclusions solely based on the written submissions in a summary fashion. Furthermore, the assessee has presented a reasonable justification for the non-compliance with the notice issued on 20/12/2019, particularly given that the assessment was completed within a short span thereafter on 28/12/2019. In our considered view, the assessee was denied a fair opportunity to submit the requisite documents in relation to the additions made by the Ld. AO. Accordingly, we set aside the assessment proceedings and remand the matter to the file of the Ld. AO for fresh adjudication. We refrain from expressing any opinion that may prejudice the reassessment proceedings. It is, however, imperative that the assessee is afforded a reasonable opportunity of being heard during the reassessment proceedings and is allowed to submit any evidence or documents necessary for the proper determination of the assessment. At the same time, the assessee is expected to act diligently and cooperate in the reassessment process.