RAJESH G.MEHTA,MUMBAI vs. ASST CIT CEN CIR 36, MUMBAI

Before us, there is a letter for adjournment dated 7.11.2016, wherein assessee seeks certain time to compile the details. In this regard, in response to the questions from the Bench regarding the details likely to be filed, there is no response from the assessee‟s side. Accordingly, the request for adjournment is rejected and we proceed to hear the case on the grounds raised before us.

Bringing our attention to the grounds no.4 and 6, it is submitted that the CIT (A) passed order without attendance of the assessee or any representation on behalf of the assessee. Therefore, there is a request for remanding this appeal to the file of the CIT (A) with a direction to grant further opportunity in addition to the details provided in para 3.2 of the impugned order. It is also brought to our notice that the issue relating to making of assessment in the absence of any incriminating material u/s 153A of the Act is unsustainable in law.

On hearing both the parties, we have perused the order of the AO dated 26.3.2014 and find the assessee filed the return of income originally on 2.6.2008 declaring the total income of Rs. 6.6 lakhs (rounded off). Consequent to the search action conducted on Shri Rajesh G. Mehta, the director of M/.s Karma Industries Limited, in response to the notice u/s 153A of the Act, assessee filed the return of income declaring the increased total income of Rs. 33,65,021/-. On the fact of it, the assessment order does not indicate any incriminating material / evidence in any form for this increased total income. Assessee declared an amount of Rs. 28,12,544/- as „short term capital gains‟ and claimed benefit of the provisions of section 111A of the Act relating to the „tax on short term capital gains‟ suo moto in certain cases. AO never mentioned that the above additional income is attributable to any incriminating material seized u/s 132 of the Act. Assessing Officer considered the claim of the assessee and found, assessee does not establish the applicability of the said provisions of the Act and the conditions are satisfactorily met before claiming the concessional tax rates. Accordingly, the said income was treated as normal income. AO also denied the claim of deduction under Chapter VI-A amounting to Rs. 1,10,000/-. On appeal, CIT (A) confirmed the same in his exparte adjudication. Thus, it is evident from the record that the AO did not have evidence / incriminating material to show that the said income of Rs. 28,12,544/- or deduction of Rs. 1,10,000/- has a basis of any incriminating material found during the search action. However, this is the case where adjudication by the CIT (A) is done in the absence of the assessee or his representative. Considering the fairness of the requirement of the adjudication of issues involved, we are of the opinion, the grounds raised by the assessee in the appeal are required to be remanded to the file of the CIT (A) for fresh adjudication after granting a reasonable opportunity of being heard to the assessee. Assessee is also directed to make attendance without fail this time in the second round of proceedings before the first appellate authority. We order accordingly. Thus, grounds raised by the assessee are allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 8th November, 2016. (PAWAN SINGH) ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक 08.11.2016 व.नन.स./ OKK , Sr. PS आदेश की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A)- 3. 4. आमकय आमुक्त / CIT 5. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 6. गार्ड पाईर / Guard file. सत्मावऩत प्रनत ////