What did the Tribunal hold?

The Tribunal, in the interest of justice and considering the Revenue's submission, remanded the matter back to the AO. The AO is directed to provide the assessee with an opportunity for cross-examination and to pass an order after giving adequate hearing.

The Revenue appealed the CIT(A)'s order which deleted additions made by the AO. The CIT(A) deleted the additions because the assessee was not given an opportunity to cross-examine the party whose statement was the basis for the additions.

What were the issues?

Whether the additions made by the AO based on statements without providing an opportunity for cross-examination to the assessee are valid. The core issue is the violation of natural justice principles.

DCIT vs M/S. Kamal Forging Pvt. Ltd… | ITAT Kolkata 2018

Income Tax Appellate Tribunal, “A” BENCH: KOLKATA

Before: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi

ORDER Shri S.S. Viswanethra Ravi, JM:

This appeal by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals),1, Kolkata dt. 31-08- 2010 for the A.Y 2007-08.

When the matter was called for hearing, neither the assessee nor any authorized representative on behalf of assessee appeared nor any application filed seeking for adjournment. Therefore, we set ex parte of assesse and proceed to hear the ld.DR, dispose of the appeal by perusing the material available on record. The contention of the ld. DR was that the CIT-A deleted the impugned additions made by the AO only on the ground, that there was no opportunity to assessee to cross examine the party/person, basing on which statement the AO made the impugned addition and referred to page-9 of the CIT-A order and as such urged to remand the matter to the file of AO in order to give an opportunity to assessee for the same. Relevant portion of order of CIT-A is reproduced herein below:-

“ In the present case, all the disallowances were made on the assesse company on the basis of statements and explanations offered by officials from M/s. M/s. Kamal Forgin Pvt. Ltd.

Vikas Iron & Steel Co. Ltd without cross examination. The validity of such explanations from the assesse company. Thus clearly going against the very basic concepts of equity and natural justice. This fact goes to the heard of the argument. It renders the assessment biased and one sided and precludes truth from emerging out of the conflicting view obfuscating the issue. In the circumstances and as narrated above, the addition cannot stand in view of my observation above. This Ground succeeds. “ 3. In view of above, taking into consideration the submissions of the ld. DR, facts and circumstances of the case, and in the interest of justice, we deem it fit and proper to remand the matter to the file of AO to afford an opportunity to assessee for cross examination of such person/party and to pass an order as per law, after giving the assessee adequate opportunity of hearing to assessee. The assessee shall be at liberty to file requisite evidences/ explanations to substantiate its claim/contention. Grounds raised by the revenue are allowed for statistical purpose.

In the result, the appeal of revenue is allowed for statistical purpose.

Order pronounced in the open court on 12-09-2018

DCIT, CIRCLE - 3 KOLKATA, KOLKATA vs. M/S. KAMAL FORGING PVT. LTD., HOWRAH

What did the Tribunal hold?

What were the facts?

What were the issues?

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