What did the Tribunal hold?

The Tribunal held that the punishment of tax liability was disproportionate to any alleged negligence by the assessee. It was also noted that the CIT(A) could have called for further evidence under Rule 46A(4) to resolve the controversy more justifiably.

The Assessing Officer (AO) made an ex parte addition of Rs. 25,93,000/- on account of unexplained investment in immovable property based on information from the Annual Information Report. The assessee's appeal to the CIT(A) was dismissed as the CIT(A) refused to admit additional evidence, citing prior opportunities given by the AO.

What were the issues?

Whether the CIT(A) erred in not admitting additional evidence, and if so, whether the addition made by the AO was justified without considering such evidence.

Smt. Usha, Ghaziabad vs ITO | ITAT Delhi 2016

Income Tax Appellate Tribunal, DELHI BENCHES : SMC-2 : NEW DELHI

Before: SHRI RAJPAL YADAV

For Appellant: Shri Somil Aggarwal, Advocate

For Respondent: Shri S.K. Jain, Sr.DR

Hearing: 26.12.2016Pronounced: 27.12.2016

ORDER

PER RAJPAL YADAV, JM:

The present appeal is directed at the instance of the assessee against the order of the CIT(A) dated 30th December, 2015 passed for Assessment Year 2009-10. The grounds of appeal taken by the assessee are not in consonance with Rule 8 of ITAT Rules. She has taken 11 grounds of appeal, but, her grievance revolves around one issue, namely, the ld.CIT(A) has erred in not admitting additional evidence and, thereby, confirming the addition of Rs.25,93,000/-.

2. With the assistance of ld. representatives, I have gone through the record carefully. It emerges out from the record that the AO got an information from Annual Information Report Wing exhibiting the fact that the assessee has purchased immovable property of Rs.25,93,000/- on 22nd January, 2009. The AO has passed an ex parte assessment order making an addition of Rs.25,93,000/- on account of unexplained investment in the purchase of the property. Dissatisfied with the assessment order, the assessee carried the matter in appeal and applied for permission to lead additional evidence. This prayer of the assessee has been rejected by the ld.CIT(A) on the ground that sufficient opportunities have been given by the AO.

3. On due consideration of the above facts and circumstances, I am of the view that ld. Revenue authorities have failed to appreciate that even 2 if there is negligence at the end of the assessee, then, punishment in the shape of tax liability will not be disproportionate to the alleged negligence. The ld. first appellate authority has failed to appreciate this aspect. The sub-clause (4) of Rule 46A contemplates that ld. first appellate authority could call for any evidence which can help her resolve the controversy in a more justifiable manner. Considering these facts and circumstances, I set aside both the orders of ld. Revenue authorities and restore this issue to the file of the AO. The assessee will be at liberty to produce any evidence in support of her explanation. The ld. AO shall grant due opportunity of hearing to the assessee.

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

The order pronounced in the open court on 27.12.2016.

SMT. USHA,GHAZIABAD vs. ITO, GHAZIABAD

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

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