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Facts
The assessee appealed against orders of the CIT(A) which arose from assessments made by the ITO under sections 147/144. The assessee argued that the assessment should have been completed under section 153C as incriminating material was found during a search on a third party (Mastana Group), not directly on the assessee. The CIT(A) had dismissed the assessee's appeal ex parte due to non-appearance, without a proper examination of facts and legal arguments.
Held
The Tribunal observed that the CIT(A) failed to conduct a factual appreciation and provide conclusive findings on questions of fact and law due to the ex-parte dismissal and disputed service of notices. Consequently, the Tribunal restored the issues on merits and points of law to the CIT(A) for a fresh order, granting the assessee a reasonable and effective opportunity of hearing.
Key Issues
Whether assessment based on incriminating material found during a third-party search should be under Section 147/148 or Section 153C of the Income Tax Act, 1961. Whether the ex-parte dismissal by CIT(A) without factual appreciation or legal examination warrants restoration of the appeals, especially when notice service is disputed.
Sections Cited
Section 147, Section 144, Section 153C, Section 148, Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES : B : NEW DELHI
Before: SHRI M. BALAGANESH & SHRI ANUBHAV SHARMA
(Appellant) (Respondent) Assessee by : Shri V.K. Bindal, CA & Ms Rinky Sharma, ITP Revenue by : Shri Shyam Manohar Singh, Sr.DR Date of Hearing : 14.08.2024 Date of Pronouncement : 27.08.2024 ORDER PER ANUBHAV SHARMA, JM: These are appeals preferred by the assessee against the orders dated 07.02.2024 of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) arising out of the appeal before it against the orders passed u/s ITAs No.1473 to 1476/Del/2024 147/144 of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’), by the ITO, Ward48(4), New Delhi (‘the ld. AO’ for short).
Heard and perused the record.
At the time of hearing, the ld. counsel for the assessee had raised a legal argument that the assessment in the case of the assessee should have been completed by taking recourse to section 153C of the Act and the impugned notice u/s 148 and the assessment thereupon u/s 147 of the Act is not in accordance with law. He has argued that the incriminating material/entries were allegedly found during the search in the premises of Mastana Group on 17.01.2017 and the same has been relied for completing assessment in the hands of the assessee without taking recourse to section 153C of the Act. He had relied the decision of this bench itself in the case of Anoop Kumar Gupta Versus ACIT order dated 5/10/2023 and in MAH Impex (P) Ltd Versus ITO in order dated 31/10/2023.
The proposition as raised in no more res integra, however, what transpires form the impugned order is that before the CIT(A), the assessee had failed to appear and make any submissions on facts or law and proceeding the assessee ex parte, the CIT(A) had dismissed the appeal of the assessee. Though the appeal was dismissed in default, but, CIT(A) had made some observations on the merits of the addition also. But, the same was without examination of the legal issue as raised before us and not having an opportunity to consider the ITAs No.1473 to 1476/Del/2024 substantial facts and the legal aspects on submissions of assessee. The ld. counsel had pointed out that notices were not actually served upon the assessee.
We are of the considered view that as there is no factual appreciation and conclusive findings of the CIT(A) on questions of facts and law thus the ends of justice require restoring the issues on merits and point of law to CIT(A) for passing an order afresh.
Consequently, the appeals are allowed for statistical purposes and the issues on merits and question of law are restored to the files of the CIT(A) to pass an order afresh after giving a reasonable and effective opportunity of hearing to the assessee.