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Facts
The assessee's income tax return for AY 2017-18 was scrutinized, leading to an addition of Rs. 13,68,000/- under Section 68 for unexplained capital introduction. The Assessing Officer and CIT(A) confirmed the addition due to the assessee's failure to provide supporting evidence despite multiple opportunities. The assessee's counsel contended that the proprietor was in judicial custody during the CIT(A) proceedings, preventing his appearance.
Held
The Tribunal, acknowledging the assessee's inability to appear before the CIT(A) due to judicial custody in a separate case, set aside the CIT(A)'s ex-parte order. The case was remanded back to the CIT(A) for fresh adjudication, ensuring the assessee receives a reasonable opportunity of being heard in adherence to natural justice principles.
Key Issues
Whether the CIT(A) violated principles of natural justice by passing an ex-parte order without granting the assessee sufficient opportunity of being heard, especially given the proprietor's judicial custody.
Sections Cited
Section 68, Section 115BBE, Section 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘SMC’: NEW DELHI
Before: SHRI ANUBHAV SHARMA & SHRI BRAJESH KUMAR SINGH
per the details on page-3 of the appellate order. The Ld. CIT(A) held that it was evident that the assessee during the assessment as well as in the appellate proceedings fail to furnished documentary evidences/proper explanation in support of his contention. He, therefore, dismissed the appeal of the assessee and confirmed the addition of Rs.13,68,000/- u/s 68 of the Act.
Against the said order, the assessee is in appeal before us
During the course of hearing, the ld. AR submitted a copy of decision dated 16.02.2023 in the case of Vijay Garg vs State of Haryana & Anothers (CRM-M-14003-2022) of the Hon’ble Punjab & Haryana High Court at Chandigarh granting bail to Shri Vijay Garg. On perusal of this order it is seen that Shri Vijay Garg managed three firms, two in the name of Shri Shyam Traders and one in the name of M/s Stasya Enterprises. A case was filed by state of Haryana that through these firms, the petitioner availed input tax credit by fabricating invoices resulting in generation of bills worth Rs.367 Crores and evasion from payment of goods and services tax (for short GST) to the tune Rs.26 Crores. The Ld. AR submitted that the petitioner was in custody since 21.09.2021 and as per the above decision was released on 16.02.2023 and therefore, due to these difficulties, he could not appear before the ld. CIT(A). In view of these facts, the ld. Counsel for the assessee prayed that the order of the Ld. CIT(A) may be set-aside to the file of the ld. CIT(A) for fresh adjudication and one more opportunity may be granted to the assessee to represent its case effectively.
The ld. DR strongly supported the orders of the authorities below.
We have heard both the parties and perused the materials available on record. Considering the entire facts in perspective in order to subserve the interests of natural justice and to provide an opportunity to the assessee to effectively represent his case, the order of the Ld. CIT(A) is set- aside to the file of the ld. CIT(A) for fresh adjudication after providing reasonable opportunity of being heard to the assessee. Grounds are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes only.
Order pronounced in the open court on 17th October, 2024.