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Facts
The assessee's appeal is against the order of the NFAC for AY 2018-19. The assessee's grounds of appeal include denial of liability to be assessed at the enhanced total income, challenging the assessment proceedings for lack of jurisdiction and due process, and disputing additions made on account of cash received from customers and alleged commission income.
Held
The Tribunal held that both the Assessing Officer and the first appellate authority ought to have conducted a proper inquiry and applied their mind, giving the assessee a reasonable opportunity of being heard. Therefore, the Tribunal restored the appeal to the file of the CIT(A) for a fresh decision.
Key Issues
Whether the assessment proceedings were conducted in accordance with law, principles of natural justice, and whether the additions made were justified.
Sections Cited
143(3), 68
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Income Tax Appellate Tribunal, DELHI ‘A’ BENCH,
Before: SHRI SATBEER SINGH GODARA, & SHRI NAVEEN CHANDRA
This appeal by the assessee is directed against the order of the NFAC, dated 28.08.2023 pertaining to A.Y 2018-19.
At the very outset the ld. counsel for the assessee submitted his grievances vide grounds of appeal which read as under:
“1. That the appellant denies her liability to be assessed at the total income of Rs.2,43,51,915/-(reduced to Rs. 2,07,01,495 ) by worthy CIT(A) against returned income of Rs. 4,20,330/-and accordingly denies her liability to pay tax and interest demanded thereon.
2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law in not quashing the assessment u/s 143(3) even though the same was framed by Ld. A.O. without assuming jurisdiction under that section in accordance with law.
3. In any view of the matter and in any case initiation and conduct of impugned assessment proceedings and framing of impugned assessment order are bad in law and against the fact and circumstances of the case.
4. That having regard to the facts and circumstances of the case Ld. CIT(A) has erred in not deleting addition of Rs. 1,98.24,862/- that too made u/s 68 on account of cash received from customers in normal course of business accepted by revenue, as unexplained cash deposited into bank from 01.04.2017 to 29.08.2017, that too for the reason that business agreement for this period was not on record and ignoring the nature of business of the assessee.
That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in sustaining the addition
Page 2 of 5 of Rs 4,56,302/- on account of alleged commission against the facts and circumstances of the case and that too ignoring the fact that this commission income has been already offered to tax
That having regard to facts and circumstances of the case, the 6 demand raised without giving credit of the prepaid taxes is bad Rs. 0 in law and facts of the case.
That having regard to the facts and circumstances of the case, the assessment order passed in this case is bad in law being passed without following principles of natural justice and due care and without proper enquiry, application of mind and appreciation of facts
That the appellant craves the leave to add, modify, amend or 8 delete any of the grounds of appeal at the time of hearing and all Rs. 0 the above grounds are without prejudice to each other.”
Per contra, the ld. DR relied upon the orders of the authorities below.
A perusal of the above grounds of appeal reveal that the main grievance of the ld. counsel for the assessee is that the Assessing Officer and the CIT(A) has passed the order without following principles of natural justice and due care without proper enquiry, application of mind and appreciation of facts.
5. Having heard the rival submissions, we are of the considered view that both the AO and the first appellate authority ought to have conducted proper enquiry and applied their mind after giving a reasonable and adequate opportunity of being heard to the assessee.
Therefore, in the interest of justice and fair play, we deem it fit to restore the appeal to the file of the ld. CIT(A). The ld. CIT(A) is directed to decide the appeal afresh after affording a reasonable and adequate opportunity of being heard to the assessee and considering the evidences/material furnished by the assessee. The assessee is directed to cooperate with the proceedings and furnish documents/evidence as required by the ld. CIT(A). allowed for statistical purposes.
Order pronounced in open court on 26.08.2025.