ITO 2(1)(1), MUMBAI vs. BALKAN CHEMICALS P.LTD, DOMBIVALI

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ITA 2519/MUM/2017Status: DisposedITAT Mumbai21 June 2017AY 2011-123 pages

In favour of the Revenue: the Revenue's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(A) violated Rule 46A by not giving the Assessing Officer an opportunity to examine evidence filed during appellate proceedings. The appeal was allowed, and the issue was restored to the Assessing Officer for fresh adjudication.

What were the facts?

The Assessing Officer made an addition on account of unexplained credit entries in the assessee's bank account after the assessee failed to appear. The CIT(A) deleted this addition. The Revenue appealed this deletion.

What were the issues?

Whether the CIT(A) erred in deleting additions without providing the AO an opportunity to examine evidence filed during appellate proceedings, particularly when the assessment was ex-parte under Section 144.

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, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI D.T. GARASIA

For Appellant: Shri Subodh Ratnaparkhi, A.R
For Respondent: Shri B.S. Bist, D.R
Hearing: 12.06.2017Pronounced: 21.06.2017

Per D.T. Garasia, Judicial Member:

1.

The present appeal has been preferred by the Revenue against the order dated 11.01.2017 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2011-12.

2.

The Revenue has taken the following grounds of appeal:

1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition on account of unexplained credit entries of the bank account.

2. The Ld. CIT(A) violated the provisions of Rule 46A of the I.T. Rules , by not giving the Assessing officer an opportunity to examine the evidence filed during appellate proceeding more so when the assessee has not attended during assessment and the order was passed u/s. 144 of the I.T. Act, 1961.

3. For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and that of the AO be restored.”

3.

The short facts of the case are that the assessee company is engaged in manufacturing of ice at MIDC, Dombivali. During the assessment

2 M/s. Balkan Chemicals Pvt. Ltd. proceedings, it was found that there was AIR information that company has made certain transactions through saving bank account with Dombivali Nagari Sahakari Bank Ltd. The Assessing Officer (hereinafter referred to as the AO) has called for the information from Dombivali Nagari Sahakari Bank Ltd. Since the assessee did not remain present, the AO has made the addition.

2. Matter carried to the Ld. CIT(A) and the Ld. CIT(A) has allowed the appeal of the assessee.

3. We have heard the rival contentions of both the parties. During the course of hearing, the Ld. D.R. submitted that the Ld. CIT(A) has given relief without calling the remand report from the AO and the Ld. CIT(A) has not made any inquiry before granting relief. Moreover, the assessee did not cooperate with the AO and in absence of assessee’s cooperation the order was passed under section 144 read with section 147 of the Act. In this case, before granting any relief Ld. CIT(A) has allowed the claim and no opportunity was granted to the AO. Therefore, I am of the view that Ld. CIT(A) has violated the provisions of rule 46A of the Income Tax Act by not giving the AO an opportunity to examine the evidence during the appellate proceedings. Therefore, I allow the appeal and restore this issue to the file of the AO and AO is directed to decide the matter afresh.

4.

In the result, appeal of the Revenue is allowed.

Order pronounced in the open court on 21.06.2017.

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