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Facts
The assessee trust failed to file its return of income, leading to a reopening of the case by the AO. The AO made an addition of Rs. 1,17,10,000/- as unexplained cash credit. The CIT(A) deleted this addition.
Held
The Tribunal held that the CIT(A) failed to provide the AO an opportunity to examine the additional evidence filed by the assessee, thus violating principles of natural justice. The case was remanded to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred by not allowing the AO an opportunity to examine additional evidence submitted by the assessee, thereby violating principles of natural justice.
Sections Cited
250, 148, 143(2), 142(1), 147, 144B, 68, 46A(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the revenue, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s. 250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2018-19. 2. The revenue has raised the following grounds of appeal: a. “On the facts and circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the submissions made by the assessee during appellate proceedings were in the nature of additional evidences and therefore erred in not allowing the A.O. to examine the additional evidence admitted by them as per the provisions u/s 46A(3) of the
1. 1. T. Rules, 1962. b. The appellant prays that the order of the CIT(A) may be set aside and that of the Assessing Officer be restored.
(A.Y. 2018-19) Amami Imadi Fund Bhiwandi c. The appellant craves leave to add, alter, amend and modify any of the above grounds of appeal either before or at the time of hearing of the appeal, if considered necessary.”
3. Briefly stated, the assessee trust has not filed its return of income for the year under consideration and its case was reopened vide notice u/s. 148 of the Act, dated 30.03.2024, as per the information received from the ‘Insight Portal’ data that the assessee has made cash deposits in Union Bank of India amounting to Rs. 1,17,10,000/- and cash withdrawals of Rs. 35,75,000/-. In response to the said notice, the assessee filed its return of income dated 08.04.2024, declaring total income at Rs. 1,78,309/-. The statutory notice u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. The learned Assessing Officer ('ld. A.O.' for short) had passed the assessment order u/s. 147 r.w.s. 144B of the Act, dated 13.02.2023, determining total income at Rs. 1,18,88,310/-, after making addition u/s. 68 of the Act, amounting to Rs. 1,17,10,000/- as unexplained cash credit.
4. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 08.09.2024, deleted the addition made by the learned Assessing Officer (ld. A.O. for short), after considering the submission of the assessee along with documentary evidence filed before the ld. CIT(A).
5. The revenue is in appeal before us, challenging the impugned order of the ld. CIT(A) on the ground that the ld. AO was not given an opportunity to examine the additional evidences filed by the assessee as per Rule 46A(3) of the I. T. Rules, 1962.
6. We have heard the rival submissions and perused the materials available on record. The learned Departmental Representative (‘ld. DR’ for short) for the revenue contended that (A.Y. 2018-19) Amami Imadi Fund Bhiwandi the assessee has filed all the supporting documentary evidences before the ld. CIT(A), who after considering the same, deleted the impugned addition by holding that the assessee has discharged the primary onus casted upon it to prove the identity, and creditworthiness of the parties and genuineness of the transaction. The ld. DR further contended that the ld. CIT(A) neither sought for remand report from the ld. AO nor had given an opportunity to the ld. AO to examine the said documents. The ld. DR prayed that the same may be remanded to the ld. CIT(A) to extend an opportunity for the ld. AO to examine and verify the documents filed by the assessee.
The Representative of the assessee trust who appeared in person was also heard on this issue.
On the above facts of the case, it is observed that the ld. AO has made an addition on the ground that the assessee has not substantiated the source of the transactions made by the assessee trust. On the other hand, the ld. CIT(A) has allowed the claim of the assessee by relying on the documents filed by the assessee. Upon perusal of the same, it is observed that the ld. CIT(A) has not confronted the evidences filed by the assessee to the ld. AO, thereby, violating the principles of natural justice and the provisions of the Rule 46A(3) of the I.T. Rules, 1962. We therefore deem it fit to remand these issues back to the ld. CIT(A) for de novo adjudication, after duly considering the submission of both sides. Needless it is to say that sufficient opportunity of hearing is to be given to either parties.