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Facts
For AY 2014-15, the assessee filed a NIL return, but the Assessing Officer completed assessment u/s 143(3) by making significant additions for unexplained cash credits and unsecured loans u/s 68. The CIT(A) deleted these additions, leading the Revenue to appeal to the ITAT. The assessee did not attend the ITAT hearing, and notices sent were returned unserved.
Held
The Tribunal noted that the CIT(A) allowed the appeal by relying on new documents filed by the assessee without seeking comments from the Assessing Officer. To ensure substantial justice, the Tribunal set aside the CIT(A)'s order and restored the matter for a de novo decision, requiring the CIT(A) to provide the assessee an opportunity to be heard and obtain comments from the AO on the new evidence.
Key Issues
Whether the CIT(A) erred in deleting additions for unexplained cash credits and unsecured loans under Section 68, and in not appreciating the applicability of Section 56(2)(viiB), without obtaining comments from the Assessing Officer on new evidence, thus requiring a de novo assessment.
Sections Cited
Section 68, Section 56(2)(viiB), Section 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI
Before: SHRI KUL BHARAT & SHRI M. BALAGANESH
O R D E R PER KUL BHARAT, JM:
This appeal, by the Revenue, is directed against the order of the learned Commissioner of Income-tax (Appeals)-32, New Delhi, dated 29.12.2017, pertaining to the assessment year 2014-15. The assessee has raised following revised grounds of appeal:
“1. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.1,39,25,20,500/- on account of unexplained cash credits u/s. 68 of the Income-Tax Act, 1961.
2. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) failed to appreciate that as per financial statements/records the said amount was kept in “General Reserve” and not under head “Share Application Money”. Hence, provisions of Section 56(2)(viiB) is clearly attracted as the amount of share premium was determined at the time of issue of shares i.e. in the previous year.
3. Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.77,53,467/- made u/s. 68 of the Income-Tax Act, 1961.”
At the time of hearing no one attended the proceedings on behalf of the assessee. It is seen from the record that no one is attending the proceedings on behalf of the assessee since 12.04.2021. Notices sent at the address furnished by the assessee in Form no. 36 have been returned unserved with the postal remarks ‘Addressee left without instruction’. No change in address, if any, has also been furnished by the assessee. Therefore, the appeal is taken up for hearing in the absence of the assessee and is being decided after hearing the learned DR and on the basis of material available on record.
Facts, in brief, are that for A.Y. 2014-15 the assessee filed its return of income on 29.03.2016 declaring loss of Rs. NIL. The case was selected for scrutiny assessment under CASS for limited scrutiny. The AO completed the assessment u/s 143(3) of the Income-tax Act, 1961 (the “Act”) at a total income of Rs. 140,02,73,970/-, as against Nil income returned by the assessee, by making addition of Rs. 139,25,20,500/- on account of unexplained cash credits; and Rs.
77,53,467/- on account of unsecured loan u/s 68 of the Act. Aggrieved against this the assessee preferred appeal to the learned CIT(A), who allowed the appeal by deleting the additions made by the AO. Aggrieved against the deletion of additions the Revenue is in appeal before this Tribunal.
It is noticed that before the learned Commissioner (Appeals), the counsel of the assessee had filed certain papers which were not placed on record before the Assessing Officer. The papers filed were - order of DRT; sealing the premises of the assessee; minute books of the assessee resolving issuance of equity shares; and the order of FIR filed by the E.O.W. against one Shri Kamal Jit Ahluwalia, who was one of the share-subscribers. Relying on the documents filed on behalf of the assessee learned Commissioner (Appeals) allowed the appeal of the assessee.
4.1 From the perusal of the order of learned Commissioner (Appeals)’s order, it is apparent that he has decided the matter without seeking any comments from the learned Assessing Officer vis-à-vis documents filed by the assessee before learned Commissioner (Appeals).
4.2. Considering the totality of facts and circumstances of the case, we are of the considered view that in order to provide substantial justice to both the parties, the impugned order of learned CIT(A) is set aside and the matter is restored to the file of the learned CIT (Appeals) to decide the matter de novo, in accordance with Assessing Officer in respect of documentary evidence filed by the learned counsel appearing for the assessee. We order accordingly.
Grounds are allowed for statistical purposes.
In the result, the appeal is allowed for statistical purposes.
Order pronounced in open court on 10th April, 2024.