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Facts
The assessee's assessment for AY 2014-15 was completed ex-parte by the AO under Section 144 due to non-compliance, where an addition of 8% of unexplained unsecured loans totaling Rs. 1,12,33,965/- was made. The CIT(A) enhanced this addition to Rs. 1,03,35,948/- after issuing a notice of enhancement. The assessee appealed the CIT(A)'s order to the ITAT but did not appear for the hearing.
Held
The Tribunal found that the notice under Section 143(2) was duly served and there was no justification for the AO to restrict the addition to only 8% of the unexplained creditors. Upholding the CIT(A)'s order, the Tribunal concluded that the enhancement of the addition, made after due notice, required no interference. Consequently, the appeal filed by the assessee was dismissed.
Key Issues
Whether the CIT(A) was justified in enhancing the addition made by the AO under Section 144 for unexplained unsecured loans, and if the AO was justified in restricting the addition to 8% of such loans.
Sections Cited
Section 144 of the Income Tax Act, 1961, Section 143(2) of the Income Tax Act, 1961, Section 142(1) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI G.S. PANNU & SHRI ANUBHAV SHARMA
O R D E R PER ANUBHAV SHARMA, J. M.: 1. The appeal has been preferred by the Assessee against the order dated 28.02.2019 of Ld Commissioner of Income Tax (Appeals)-19, New Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in appeal No. 10613/16-17/618 arising out of an appeal before it against the order dated 30.11.2016 u/s 144 of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) passed by the ld. Assessing Officer, ITO, Ward-55(4), New Delhi (hereinafter referred as the Ld. AO).
As the case was called for hearing none has appeared for the assessee. The records shows earlier on 23.11.2022 only Shri M. P. Rastogi had appeared for the assessee and filed a paper book/ synopsis/ written submission. Thereafter, notices have been issued repeatedly but none appeared for the assessee and on the RPAD notice it is reported that there is no such person at the address. There is no further notice was justified and arguments of the ld DR Page | 1 were heard who supported the findings of the Ld. Tax Authorities below. On appreciating the facts it comes up that the return of assessee was taken up for scrutiny u/s 143(2) was issued on 21.09.2015 and thereafter none appeared for the assessee in response to the notice u/s 142(1) and accordingly, the ld AO proceeded to complete the assessment by resorting the provision of Section 144 of the Act and findings the increase in unsecured loans to be not genuine and an addition was made to the extent of 8% of the total increase of unsecured loan of Rs. 1,12,33,965/-. The ld CIT(A) had enhanced this addition of Rs. 1,03,35,948/- against this assessee is in appeal.
On perusal of the order of the ld CIT(A), we convinced that there is a specific conclusion of service of notice u/s 143(2) within the time prescribed under the law and there is no justification on the part of the ld AO to restrict the addition to 8% of the unexplained creditors. The ld CIT(A) after giving the due notice of enhancement had made the addition which requires no interference.
Accordingly, the appeal of the assessee is dismissed.
Order pronounced in the open court on 25/06/2024.