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Facts
The Assessing Officer treated a significant amount of Rs. 8,67,56,098 as income from other sources for the assessee. The assessee challenged this before the Commissioner of Income Tax (Appeals) but did not provide compliance or documents, leading to the dismissal of their appeal. The assessee claimed it faced difficulties due to various civil and criminal proceedings.
Held
The Tribunal found merit in the assessee's contention that the Commissioner ought to have remanded the matter for further inquiry instead of forming an adverse inference. The Tribunal decided to remand the case to the Commissioner for a fresh decision on merits, providing the assessee with a reasonable opportunity to present their case.
Key Issues
Whether the CIT(A) erred in not remanding the case to the AO for further inquiry when the assessee claimed to have faced difficulties due to legal proceedings and provided some documentation.
Sections Cited
250, 144, 147
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Income Tax Appellate Tribunal, MUMBAI BENCH “E”, MUMBAI
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI RATNESH NANDAN SAHAY
Per : Narender Kumar Choudhry, Judicial Member:
These appeals have been preferred by the Assessee against the orders dated 24.05.2024 & 29.04.2024 impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 ,3267,3268 & 3269/MUM/2024 2 M/s. Krishna Fashion World of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2014-15, 2015-16 & 2017-18.
The impugned orders involved in these appeals are ex-parte and therefore all the appeals under consideration were heard simultaneously and are being disposed of by this common order by considering as a lead case and result of the same shall apply mutatis mutandis to all the appeals under consideration. we observe that vide assessment order dated 22.12.2018 u/s 144 r.w.s 147 of the Ac, the Assessing Officer (AO) ultimately treated the amount of Rs.8,67,56,098/- (Rs.5,25,46,135/- as loan given to various parties/entities and Rs.3,42,09,963/- cash deposited in its bank account with ICICI Bank Ltd.) as income from other sources and added the same in the income of the Assessee.
The Assessee being aggrieved, though challenged the aforesaid addition before the Ld. Commissioner, however, in spite of affording opportunities neither made any compliance nor filed any reply/documents. Therefore, in the constrained circumstances, the Ld. Commissioner affirmed the aforesaid additions by dismissing the appeal of the Assessee.
The Assessee, being aggrieved, is in appeal before us. We have heard the parties and perused the material available on record. The Assessee by way of Ground No.3 has claimed that the Ld. Commissioner before forming adverse inference on the basis of finding given by the Assessing Officer (AO) in the assessment order ignoring the contention raised by the Assessee in statement of facts filed along with appeal memo, ought to have remanded the matter to the AO to hold/conduct further enquiry. The Assessee further claimed that it went through bad times in various civil and criminal proceedings in the ,3267,3268 & 3269/MUM/2024 3 M/s. Krishna Fashion World
last 10 years which also caused forceful acquisition or possession of business premises, business stock and business asset lying at business premises wherein various records and evidences were also used to be kept and preserved, by one of business creditor with whom the Assessee had dispute related to financial transactions. The Assessee along with their representative had been frequently informing the AO qua unprecedented situation by sharing the details relating to litigation, copy of Court documents and FIR filed with the police department and therefore the Assessee may be provided one more opportunity to represent its case, by remanding the case to the file of the Ld. Commissioner for decision afresh on merits.
We by giving thoughtful considerations to the peculiar facts and circumstances of the case and the Ground No.3 which pertains to violation of principle of natural justice as alleged by the Assessee, deem it appropriate to remand the instant case to the file of the Ld. Commissioner for the just decision of the case and for the ends of substantial justice.
Thus, the case is remanded to the file of Ld. Commissioner for decision afresh, suffice to say by affording reasonable opportunity to the Assessee to substantiate its claim and further by calling remand report from the AO, if so desires. The Assessee is also directed to cooperate with the appellate proceedings and to file the relevant submissions/documents which would be essential and required by the Ld. Commissioner for proper adjudication of the case. We clarify that in case of further default the Assessee shall not be entitled for any leniency.
Consequently the appeal i.e.
filed by the Assessee stands allowed in the aforesaid terms for statistical purposes.
,3267,3268 & 3269/MUM/2024 4 M/s. Krishna Fashion World
In the result, in view of our decision in all the appeals filed by the Assessee are allowed for statistical purposes in the same terms.
Order pronounced in the open court on 23.08.2024.