M/S. LEGACY GLOBAL PROJECTS PRIVATE LIMITED,BANGALORE vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(4), BANGALORE

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ITA 77/BANG/2022Status: DisposedITAT Bangalore26 April 2022AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) passed an ex-parte order without hearing the assessee. In the interest of natural justice, the assessee was granted another opportunity to present its case before the CIT(A).

What were the facts?

During a search, the assessee company's book cash balance was found to be significantly higher than its physical cash balance. The Assessing Officer (AO) made an addition based on this difference, which was later enhanced through a rectification order.

What were the issues?

Whether the CIT(A) erred in passing an ex-parte order without affording the assessee an opportunity to be heard. Whether the assessee should be given a chance to present its explanations regarding the cash difference.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE

Before: SHRI N.V. VASUDEVAN & SHRI B.R. BASKARAN

For Appellant: Shri V. Srinivasan, A.R
For Respondent: Shri Sankar Ganesh K, D.R
Hearing: 22.03.2022Pronounced: 26.04.2022

PER B.R. BASKARAN, ACCOUNTANT MEMBER:

1.

The assessee has filed this appeal challenging the order dated 8.12.2021 passed by Ld. CIT(A)-11, Bangalore and it relates to the assessment year 2017-18. The assessee is aggrieved by the decision of Ld. CIT(A) in confirming the addition of Rs.7.51 crores made by the A.O in the order passed u/s 143(3) of the Income-tax Act,1961 ['the Act' for short] which was enhanced in the rectification order passed u/s 154 of the Act.

2.

The assessee is a builder and developer and a search operation was conducted in the premises of the assessee on M/s. Legacy Global Projects Pvt. Ltd., Bangalore

Page 2 of 3 9.12.2017. At the time of search, the cash balance found in the books of account was Rs.7.56 crores, while the assessee was having physical cash balance of Rs.5.50 lakhs. Further, the search officials noticed that the cash balance available as on 31.3.2017 in the balance sheet was Rs.28,44,158/-. Accordingly, the A.O. assessed the difference amount of Rs.6,73,25,479/- in the order passed u/s 143(3) of the Act. Subsequently, it was noticed that there was an arithmetic error in computing the difference in cash balance between book balance and physical cash balance to the tune of Rs.49,50,000/- and hence the A.O. passed a rectification order u/s 154 of the Act increasing the addition by Rs.49.50 lakhs.

3.

The assessee challenged the above said addition by filing appeal before Ld. CIT(A). However, the assessee did not appear before Ld. CIT(A) and was seeking adjournment every time. Hence, the Ld. CIT(A) passed the order ex-parte confirming the addition made by the A.O.

4.

The Ld. A.R. submitted that the assessee could not appear before the Ld. CIT(A) for the reasons beyond its control and accordingly prayed that the assessee may be provided with an opportunity to present the facts properly.

5.

We heard Ld. D.R. and perused the record. We noticed that the Ld. CIT(A) has passed ex-parte order without hearing the assessee. We notice that the assessee has offered certain explanations before A.O. with regard to the difference between the book balance and physical cash balance. According to the Ld. A.R., the A.O. has not properly appreciated the explanations and the above said explanations can be proved by the assessee before Ld. CIT(A) if one more opportunity is given. Accordingly, in the interest

M/s. Legacy Global Projects Pvt. Ltd., Bangalore

Page 3 of 3 of natural justice, we are of the view that the assessee may be provided with one more opportunity to present its case before Ld. CIT(A). In fact, providing one more opportunity to the assessee would promote the cause of justice and it will not cause prejudice to the revenue. Accordingly, we set aside the order passed by ld. CIT(A) and restore all the issues to his file for adjudicating them afresh, after affording adequate opportunity of being heard.

6.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.

Order pronounced in the open court on 26th Apr, 2022.

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