INCOME TAX OFFICER, BANGALORE vs. MS.DIVYA CHETANA, BANGALORE

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ITA 2273/BANG/2016Status: DisposedITAT Bangalore28 February 2017AY 2005-064 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(Appeals) erred by accepting fresh evidence without providing the Assessing Officer an opportunity to examine it, which violates Rule 46A(3) of the IT Rules. The issue was set aside to the Assessing Officer for fresh adjudication.

What were the facts?

The Assessing Officer made an addition on account of fixed deposits totaling Rs. 32 lakhs, as the assessee did not appear or comply with notices. The CIT(Appeals) deleted this addition based on fresh evidence provided by the assessee without giving the Assessing Officer an opportunity to respond.

What were the issues?

Whether the CIT(Appeals) was justified in admitting additional evidence without giving the Assessing Officer an opportunity to be heard.

Which sections of the Income-tax Act were involved?

Section 144,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCH-SMC “ C ”

Before: SHRI VIJAY PAL RAO

For Appellant: Shri AR.V.Sreenivasan, JCIT (D.R)

Per Shri Vijay Pal Rao, J.M. : This appeal by the revenue is directed against the order dt.26.10.2016 of Commissioner of Income Tax (Appeals)-7, Bengaluru for the Assessment Year 2005-06.

2.

The revenue has raised the following grounds :

3.

When this appeal is called for hearing none has appaeared onbehalf of the assessee-respondent. It transpires from record that the notice issued to the assessee through Regd. AD has been received back unserved. Accordingly, the appeal of the revenue is heard exparte.

4.

The only issue raised by the revenue is regarding addition made by the Assessing Officer on account of fixed deposits in Canara Bank was deleted by the CIT (Appeals) by considering the fresh evidence without giving an opportunity to the Assessing Officer.

5.

Submissions of learned Departmental Representative as well as relevant material on record has been considered. It is noted that during the assessment

1.

Assessing Officer found that the assessee has made investment of fixed deposit with Canara Bank to the tune of Rs.32 lakhs. The Assessing Officer has further recorded in the assessment order that despite several opportunities given to the assessee, the assessee has not appeared nor complied with the notice under Section 148 of the Income Tax Act, 1961 (in short 'the Act'). Hence, the assessment was completed under Section 144 r.w.s. 147 of the Act.

6.

On appeal, the assessee furnished the evidence in the shape of certificate from the Bank and contended that these fixed deposits are not fresh deposits but it was renewal of all the deposits and only the interest earned on these deposits have been withdrawn by the assessee. The CIT (Appeals) has accepted the additional evidence and deleted the addition made by the Assessing Officer without giving an opportunity to the Assessing Officer to respond to the additional evidence by the assessee before the CIT (Appeals). Thus it is clear that when the assessee neither appeared nor filed any response to the notice under Section 148 and the assessment was framed under Section 144 then the acceptance of the fresh evidence by the CIT (Appeals) without giving an opportunity to the Assessing Officer is an apparent violation of Rule 46A(3) of the I.T. Rules. In view of the facts and circumstances of the case, this issue is set

Assessing Officer for deciding afresh after verification and examination of the evidence filed by the assessee.

7.

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

Order pronounced in the open court on 28th Feb., 2017.

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