SHRI BAKTHAVATCHALAM AMARNATH,,TRICHY vs. ACIT, CIRCLE - 3 (1),, TIRUCHIRAPPALLI

Brief facts of the case are that the assessee filed his return of income for the assessment year 2016-17 on 05.08.2016 returning a total income of ₹.11,71,440/-. The case of the assessee was selected for scrutiny and after following due procedure, the Assessing Officer completed the assessment under section 143(3) of the Income Tax Act, 1961 [“Act” in short] assessing total income of the assessee at ₹.52,67,822/- after making addition towards business income of ₹.40,54,061/-. On appeal, the ld. CIT(A) dismissed the appeal filed by the assessee and enhanced the assessment.

On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that the ld. CIT(A) has enhanced the assessment by issuing enhancement notice without affording sufficient opportunity to furnish reply to the enhancement notice and prayed that the assessee may be given an opportunity to substantiate his case before the ld. CIT(A).

On the other hand, the ld. DR strongly supported the order passed by the ld. CIT(A).

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Against the assessment order, the assessee preferred further appeal before the ld. CIT(A). The ld. CIT(A) issued enhancement notice dated 03.07.2019 show-causing the assessee for the proposed enhancement of the assessment to file his reply before 17.07.2019. Since there was no response from the assessee, the ld. CIT(A) proceeded to enhance the assessment without any written submissions thereon. The ld. Counsel for the assessee has submitted that due to some unforeseen circumstances, the assessee was unable to file his written submissions against the enhancement notice and prayed for an opportunity to substantiate his claim before the ld. CIT(A). In view of the above facts and circumstances and in order to meet the ends of natural justice, we are of the opinion that the assessee should be given one more opportunity to substantiate his claim before the ld. CIT(A). Accordingly, we set aside the order of the ld. CIT(A) and direct the ld. CIT(A) to afford one more opportunity of being heard to the assessee to furnish his explanation against the enhancement notice and after considering the submissions of the assessee, decide the matter afresh in accordance with law.

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