SAINATH SAKHARAM TARE,THANE vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, THANE, THANE

Facts

A search and seizure action was conducted on the Antariksh Group, where the assessee provided contractual services. Documents pertaining to the assessee were seized, leading to assessment proceedings. The assessee admitted receiving cash as contractual receipts but claimed some entries were for third parties and offered 5% income. The AO did not accept this and made additions, also initiating penalty proceedings under Section 271DA.

Held

The Tribunal found that the assessee was not heard by the CIT(A) before the ex-parte order was passed, despite the assessee's reasons for not explaining their case. Therefore, the Tribunal decided to remand the matter back to the CIT(A) for a fresh consideration after providing the appellant a reasonable opportunity of being heard.

Key Issues

Whether the CIT(A) erred in passing an ex-parte order without granting sufficient opportunity of being heard to the appellant, and whether the addition made and penalty levied were justified.