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Facts
The Revenue appealed the CIT(A)'s order which set aside the assessment order. The original assessment was completed under Section 143(3) with an addition, and a subsequent show-cause notice led to a further addition of Rs. 70,00,000/- treating a transaction as bogus. The assessee had provided submissions and documents.
Held
The Tribunal held that the CIT(A) correctly observed that the assessment order was passed without adequate opportunity for the assessee. Therefore, the CIT(A)'s action of setting aside the assessment and remitting it back to the AO for fresh adjudication was upheld.
Key Issues
Whether the CIT(A) was justified in setting aside the assessment order for lack of adequate opportunity to the assessee, and whether the appeal of the Revenue against this order deserves to be dismissed.
Sections Cited
147, 148, 143(3), 251(1)(a), 144, 144B, 250
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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-Ms SUCHITRA KAMBLE
O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
The captioned appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi, vide order dated 24.10.2024 relevant to the Assessment Year 2017-18. The assessee has filed Cross Objection No.71/Ahd/2025 against the Revenue’s appeal.
C.O No.71/Ahd/2025 Asst. Year : 2017-18 - 2–
The Revenue has raised the following grounds of appeal:
(a) The Ld.CIT(A) has erred in law and on facts in setting aside the order to the file of AO for fresh assessment u/s 251(1)(a) of the IT Act holding that the assessment order was passed ex parte u/s 144 of the Act by ignoring the fact that during the assessment proceedings, the assessee has responded on 01.05.2023 in response to Show cause Notice issued on 30.04.2023 and the order was passed u/s 147 r.w.s. 144B of IT Act which is clearly mentioned in para 12 of the assessment order. This indicates that this case was not ex- parte.
(b) The Ld.CIT(A) has erred in law and on facts in not deciding the appeal on merits of the case.
(c) The appellant craves leave to add alter and/or to amend all or any the ground before the final hearing of the appeal.
The brief facts of the case are that the assessee is a Co-operative Bank and has been maintaining proper books of accounts duly audited by the statutory auditors. Thereafter, the assessee filed its Return of Income on 23.10.2017. The case was selected for scrutiny, and the assessment under section 143(3) of the Income Tax Act, 1961, was completed on 30.10.2019, wherein an addition of Rs. 69,860/- was made being the difference between the computation of income as per the Return of Income and Annexure 8 submitted to the Assessing Officer. The assessment order does not indicate any non-cooperation on the part of the assessee; rather, it records that the assessee had furnished written submissions and necessary documents from time to time during the assessment proceedings. Subsequently, a show-cause notice was issued to the assessee requiring it to explain why the transaction with M/s. Kavita Enterprise amounting to Rs. 70,00,000/- should not be treated as bogus. The assessee duly complied by filing various written submissions along with the requisite details and C.O No.71/Ahd/2025 Asst. Year : 2017-18 - 3– supporting documents from time to time. However, the Assessing Officer treated the said transaction as bogus and made an addition of Rs. 70,00,000/-, thereby determining the total assessed income at Rs. 1,12,68,010/-.
Aggrieved against the Assessment Order, the assessee filed appeal before the Ld. CIT(A), who set aside the order of the Assessing officer by observing as follows:
“…I have considered the facts of the case, the grounds of appeal
, the written submission made by the appellant, and the reasoning given by the AO. 6.1 The appellant has raised several grounds of appeal. However, ground No. 01 relates to the contention that the reopening the section 147/148 was bad in law and thus, the order passed by the AD should be quashed. It is, however, noticed that appellant has not made any specific pleading in this regard in his written submission dated 10.07.2024, the only submission made in response to various notices issued under section 250 of the Act. Thus, in the absence of specific pleading in the submission of the appellant on the question of re opening, this ground is dismissed as not pressed. 6.2 Coming to the other grounds, which relate to the merits of the case, it is noticed that assessment order has been passed exparte under section 144, as there was no compliance from the appellant, Submission made on merits and the applicability of relevant case laws to the facts emerging after enquiry arid verification of AO requires a close look at the end of the AO so that he may give due opportunity to the appellant to explain his case. In this view of the matter, I deem it just and proper to remit this matter back to the AO with the direction to make this assessment afresh after giving due opportunity to the appellant to adduce evidence in support of his claims and explain his case. Accordingly, this assessment is set aside to be made de novo, after giving due opportunity to the appellant and after necessary verification and enquiry deemed fit…”
5. Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before the Tribunal.
C.O No.71/Ahd/2025 Asst. Year : 2017-18 - 4– 6. After considering the facts of the case and the findings of the Ld. CIT(A), it is evident that the Ld. CIT(A) has correctly observed that the assessment was passed without adequate opportunity being afforded to the assessee to present its case and substantiate its claims. Accordingly, we find no infirmity in the action of the Ld. CIT(A) in setting aside the assessment and restoring the matter to the file of the Assessing Officer for fresh adjudication in accordance with law. The assessee shall submit all the relevant bank statement/submission/document before the Assessing Officer and comply with the notices issued by the revenue authorities without seeking any unnecessary adjournments.
In the result, the appeal file by the Revenue is dismissed.
C.O No.71/Ahd/2025 (in AY 2017-18
Since the Cross Objection filed by the assessee is merely in support of the order passed by the Ld. CIT(A), no separate adjudication is required. Accordingly, the Cross Objection filed by the assessee is dismissed.
In the combined result, both the appeal of the Revenue and the Cross Objection of the assessee are hereby dismissed.