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Facts
The assessee appealed against the CIT(A)'s order dated 28.11.2023 for AY 2015-16, which upheld an assessment order passed under Section 143(3). The AO had made a significant addition of Rs. 2,98,46,874/- and assessed income at Rs. 1,42,46,930/-, contrary to the assessee's declared loss of Rs. 1,51,92,311/-. The assessee contended that the CIT(A) passed an ex-parte order without a proper opportunity of hearing due to the assessee's old age.
Held
The tribunal observed that the CIT(A) indeed passed an ex-parte order due to non-compliance with the notice. To ensure justice, the tribunal remitted the case back to the CIT(A) with directions to pass a speaking order on the merits after providing the assessee with an adequate opportunity of being heard.
Key Issues
Whether the ex-parte order passed by the CIT(A) was valid due to the alleged denial of adequate opportunity of hearing; and the legality of additions made by the AO under Section 143(3) after rejecting books of accounts under Section 145(3).
Sections Cited
Section 143(3), Section 145(3)
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Income Tax Appellate Tribunal, DELHI BENCH “H”, NEW DELHI
Before: SHRI SHAMIM YAHYA, & SHRI VIMAL KUMAR
ORDER PER SHAMIM YAHYA, AM :
The Assessee has filed the instant Appeal against the Order of the Ld. CIT(Appeal)/NFAC, Delhi dated 28.11.2023, relating to assessment year 2015-16 on the following grounds:- 1. The Assessment Order dated 30.12.2017 passed under Section 143(3) of the Income Tax Act, 1961' (‘the Act’) for Assessment Year (‘AY’) 2015-16 by the Assistant Commissioner of Income Tax, Circle 55(1), New Delhi (‘AO’) and the demand raised thereunder are illegal, bad in law, without jurisdiction, time-barred, and liable to be quashed. The National Faceless Appeal Centre ('CIT(A)') vide order dated 28.11.2023 has also erred in upholding the said assessment order.
2. That in view of the facts and circumstances of the case, the CIT(A) has - erred in confirming/upholding the additions/disallowances made by the AO vide order dated 30.12.2017 and assessing the total income of the Appellant at Rs. 1,42,46,930/- against the loss of Rs. 1,51,92,311/- as declared by the Assessee in his returned income.
3. That in view of the facts and circumstances of the case and in law, the AO has grossly erred in rejecting the books of accounts of the Assessee under Section 145(3) of the Act.; 4. That in view of the facts and circumstances of the case and in law, the AO has grossly erred in making ian addition of Rs. 2.98,46,874/- by rejecting the books of accounts under Section 145(3) of the Act. The addition made is illegal, bad in law, and is liable to be deleted. Further, the order of the CIT(A) upholding the same are also liable to be deleted.
5. That in view of the facts and circumstances of the case and in law, the AO has grossly erred in rejecting the books of accounts under Section 145(3) of the Act and estimating the Net Profit of the Assessee for the relevant Assessment Year at rate of 7.75% of Total Sales.
6. That in view of the facts and circumstances of the case and in law, the addition made by the AO on the basis of estimation of Net Profit of Total Sales is uncalled for, based on surmises and conjectures and is highly excessive.
7. That in view of the facts and circumstances of the case and in law, the AO has grossly erred in rejecting the books of accounts under Section 145(3) of the Act without according the Assessee a right of hearing before rejecting the books thereby violating his rights/principles of Natural Justice and causing him great prejudice.
8. That in view of the facts and circumstances of the case and in law, the AO has erred in not providing sufficient and adequate' opportunity to the Assessee to represent its case.
9. That, in view of the facts and circumstances of the case, the order of the CIT(A) dated 28.11.2023 has been passed without giving the Assessee reasonable opportunity to present its case and not providing him with the opportunity of personal hearing and hence, violating his rights/principles of Natural Justice and causing him great prejudice.
10. That in the view of facts and circumstances of the case, the various observations made: by AO and as! upheld by the CIT(A) are incorrect, illegal, and bad in law & based on surmise and conjectures.
2. In this case, AO made an addition of Rs. 2,98,46,874/- and completed the assessment u/s. 143(3) of the Act by assessing the total income at Rs. 1,42,46,930/-. 2 | P a g e
3. Upon assessee’s appeal, Ld. CIT(A) confirmed the AO’s action.