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Facts
A search and seizure operation was conducted, leading to assessment proceedings under Section 153C. The Assessing Officer made significant additions for AYs 2018-19, 2019-20, and 2020-21. The CIT(A) confirmed these additions.
Held
The Tribunal found that the assessment proceedings were conducted in violation of natural justice as the assessee was not given adequate time to respond. The appeals were allowed for statistical purposes, and the matter was remitted back to the AO for de novo adjudication.
Key Issues
Whether the assessment proceedings were conducted in violation of principles of natural justice due to inadequate time provided to the assessee for response.
Sections Cited
132, 153C, 143(2), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid three appeals filed by the assessee for Assessment Year (AYs) 2018-19, 2019-20 & 2020-21 arises out of the common orders of Learned Commissioner of Income Tax (Appeals)-18, Chennai [hereinafter “CIT(A)”] dated 30.03.2023.
The facts in all the appeals of the assessee are identical and issues are common hence, we proceed to pass a common order. For , 690 & 691/Chny/2023 :- 2 -: brevity, we shall take up the appeal in for A.Y 2018-19 as lead case.
The brief facts of the case are that the assessee is a Director in M/.s Radha Industries Pvt. Ltd., engaged in the business of trading of iron and steel products. The assessee is also a partner in a firm M/s.
Radha Automobiles, which is a dealer of Hero Motors. A search and seizure operation u/s. 132 of the Act was conducted on 25.07.2019 in the cases of M/s. Sakthi Ferro Alloys India Pvt. Ltd., M/s. Sakthi Steel Industries Ltd., and assessee’s residential and business premises were also covered. The A.O of M/s. Sakthi Ferro Alloys India Pvt. Ltd. and M/s. Sakthi Ferro Alloys India Pvt. Ltd. and Sri Kanniah Naidu Anandh has forwarded satisfaction note u/s. 153C of the Act relating to the assessee based on which the A.O has initiated proceedings u/s. 153C of the Act. The AO in the assessment orders passed u/s 153C has made addition of Rs.2,54,92,935/- for A.Y 2018-19, Rs. 5,48,27,675/- for A.Y 2019-20, Rs. 106,95,22,730/- for A.Y 2020-21.
Aggrieved, the assessee preferred an appeal before Ld. CIT(A). On appeal the Ld. CIT(A) confirmed the additions made by the A.O.
The Ld. Authorized Representative (A.R) of the assessee, at outset prayed for setting aside the order of the Assessing Officer for , 690 & 691/Chny/2023 :- 3 -: re-adjudication, as the entire assessment proceedings was conducted in violation of principles of natural justice, and the assessee was not given adequate time and opportunity before the assessment order was passed. The Ld. AR submitted that proceeding of assessment was initiated by issuing a notice u/s. 153C of the Act to file the return of income on 09.09.2021, followed by a notice u/s. 143(2) of the Act on 13.09.2021. Subsequently, a show cause notice was issued on 23.09.2021, requiring assessee to respond by 24.09.2021, giving only one day to respond. The assessment order was passed on 30.09.2021. The Ld. AR has submitted that the entire assessment proceedings, from the issuance of notice to the completion of the assessment, has taken only 21 days, and huge addition has been made. The Ld. A.R, therefore, requested that the matter be remanded back to the Assessing Officer for proper adjudication.
The Ld. Departmental Representative (DR) could not controvert the submissions of Ld. AR that sufficient opportunity was not provided to the assessee.
We have heard the rival submissions, and perused the materials available on record. Upon reviewing of the orders of authorities below, we find that proceedings u/s. 153C of the Act were initiated by , 690 & 691/Chny/2023 :- 4 -: issuance of notice on 09.09.2021, and the assessment was completed on 30.09.2021 u/s. 153C r.w.s 144 of the Act. The A.O has given only one day time to respond the show cause notice before finalizing the search assessment. The assessee has raised this ground before Ld CIT(A), but the same has not been adjudicated. We find that sufficient opportunity was not provided to the assessee. Therefore, we set aside the orders passed by the lower authorities and remit the matter back to the file of the A.O for denovo adjudication, after providing the assessee a reasonable opportunity to present his case. We further direct the assessee to appear before the A.O on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
& 691/Chny/2023 for AYs 2019-20 & 2020-21:
We find that the identical issues are involved in assessee’s appeals for A.Ys 2019-20 & 2020-21 also and accordingly, our adjudication above in A.Y 2018-19 applies mutatis mutandis to these cases as well. Therefore, for the similar reasons, we remit these matters to the file of A.O for denovo adjudication.
, 690 & 691/Chny/2023 :- 5 -:
In the result, all the three appeals filed by the assessee are allowed for statistical purposes.
Order pronounced on 26th February, 2025.