Loading judgment…
Facts
The assessee filed a return of income which was selected for scrutiny. The Assessing Officer (AO) made an addition under Section 68 of the Act. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that the assessment order was passed in violation of principles of natural justice as no show-cause notice was issued. The impugned orders were set aside.
Key Issues
Whether the assessment order is vitiated due to violation of principles of natural justice for want of show-cause notice? Whether additional evidence should be admitted?
Sections Cited
250, 143(3), 143(2), 142(1), 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI
Before: SHRI VIMAL KUMAR & SHRI BRAJESH KUMAR SINGH
PER VIMAL KUMAR, JUDICIAL MEMBER:
The appeal filed by the Assessee is against order dated 31.01.2023 of the Learned Commissioner of Income- Tax(Appeals),Delhi/National Faceless Appeal Centre(NFAC), Delhi (hereinafter referred as ‘Ld. CIT(A)’) under Section 250 of the Income-Tax Act, 1961 (hereinafter referred as ‘the Act’) arising out of assessment order dated 29.12.2019 passed by the ITO, Ward-59(7), Delhi (hereinafter referred as ‘Ld. A.O.’) under Sections 143(3) of the Act for assessment years 2017-18.
Brief facts of case are that appellant/assessee e-filed return of income declaring total income of Rs.6,05,250/- on 14.10.2017. The case was selected for scrutiny under CASS with reasons to verify the “Quantitative details of principal items of goods traded or raw-material as well as finished goods”. Notice under Section 143(2) of the Act was issued. Notices under Section 142(1) of the Act with questionnaire were issued to draw details on various dates through ITBA portal and delivered upon assessee on his user ID. The assessee filed reply via e-filing portal from time to time. The assessee was issued notices under Section 142(1) through ITBA portal on 07.02.2019, 16.11.2019 and 17.12.2019. During assessment proceedings, assessee furnished details. The assessee was asked to file reply by 20.12.2019. Notice under Section 142(1) of the Act to the creditors but no reply was furnished by them. The assessee filed reply to notice under Section 142(1) of the Act on 25.12.2019. On completion of assessment proceedings, Learned AO vide order dated 29.12.2019, made addition of Rs.87,76,47,415 under Section 68 of the Act.
Against assessment order dated 29.12.2019, appellant/assessee preferred appeal before the Learned Commissioner of Income-Tax(Appeals) which was dismissed vide order dated 31.01.2023.
Being aggrieved, appellant/assessee preferred present appeal.
At the time of hearing, Learned Authorised Representative for the appellant/assessee filed application under Rule 29 of the Income Tax Appellate Tribunal (Rules) 1963 for admission of additional evidence and in separate application for permission to raise an additional ground of appeal as under:
“That learned NFAC has erred in failing to appreciate that before making the addition in the order of assessment framed u/s 143(3) of the Act, no show-cause-notice has been issued to the appellant, which is in complete violation of the principles of natural justice and accordingly assessment framed is vitiated in law.”
Learned Authorised Representative for the appellant/assessee submitted that appellant/assessee is 73 years old lady is engaged in business of wholesale trading of business of sugar and fabrics. The business of assessee is a low margin business. Assessment order framed under Section 143(3) dated 29.12.2019 by the learned AO is in violation of principles of natural justice as no show-cause-notice was ever given to the appellant and inquiries were made in the assessment proceedings. Appellant wants to lead additional evidence which goes to the root of the matter for fair decision. The matter may be sent back to the learned Assessing Officer for fresh decision.
Learned Authorised Representative for the Department of Revenue relied on orders of departmental authorities.
From examination of record in the light of aforesaid rival contentions, it is crystal clear that Learned AO passed order dated 29.12.2019 without issuing show-cause-notice or making inquiries during the assessment proceedings.
The appellant had contended that the principles of natural justice have been violated. The appellant wants to lead additional evidence i.e. copy of confirmation of accounts and ledgers of the parties, comparative summary of NCDEX prices of sugar with purchase and sale price of the assessee, comparative statement of profitability between similarly situated entitles, stock register and forms MGT-14 for alteration in object clause by parties..
In view of above material facts and well settled principles of law, in the interest of justice, the impugned orders dated 31.03.2023 of Learned CIT(A and order dated 29.12.2019 of Learned AO are set aside. The matter is restored to the file of the Learned AO for fresh decision in accordance with law.
In the result, the appeal of the appellant/assessee is allowed for statistical purposes.
Order pronounced in the open court on 19/03/2025.