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Facts
The Revenue appealed an order by the CIT(A) that granted relief to the assessee. The assessee, a Trust, did not cooperate in the assessment proceedings, leading to an ex-parte assessment under Section 144. The assessee later submitted additional evidence before the CIT(A).
Held
The Tribunal found a violation of Rule 46A of the Income Tax Rules, 1962, as additional evidence submitted by the assessee was not forwarded to the AO during the remand report process. The Tribunal restored the matter to the AO for a de novo assessment.
Key Issues
Whether the CIT(A) erred in granting relief without proper appreciation of facts and in violation of Rule 46A, and if the matter should be restored to the AO for de novo assessment.
Sections Cited
144, 12A, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “G”, DELHI
Before: SHRI VIKAS AWASTHY & SHRI M. BALAGANESH
Assessee by : S/Shri Hemant Kumar, Deepak Upadhyay & Alok Gupta, Chartered Accountants Department by : Shri Mahesh Kumar, CIT(DR) सुनवाई क� ितिथ/ Date of hearing : 04/06/2025 घोषणा क� ितिथ/ Date of pronouncement : : 02/09/2025 आदेश/ORDER
PER VIKAS AWASTHY, JM:
This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 30.03.2024, for Assessment Year 2017-18.
The Revenue has assailed the order of CIT(A) on following grounds:- “1. The Ld. CIT(A) has erred in allowing relief to the assessee without appreciating the fact that, the assessee intentionally not cooperated in assessment proceedings in spite of having knowledge of the notices/letters issued to it.
(A.Y. 2017-18) 2. The Ld. CIT(A) has erred in allowing relief to the assessee without calling for Assessing officer's comments on the Financial statement and bank ledger submitted before the CIT(A).
The Ld. CIT(A) has erred in not appreciating the fact that, assessee has willingly not participated in assessment proceeding as notices and letters were issued through email and sent to the registered address as mentioned in ITR of the relevant Assessment year.
The Ld. CIT(A) has erred in not appreciating the fact that, assessee has filed a letter dated 23.12.2019 on the very next of passing assessment order, which shows that the assessee was very much aware of all the notices and willingly chosen not to participate in the assessment proceedings.
5. The appellant craves leave to add, to alter or amend any grounds of appeal
raise above at the time of hearing.”
3. Shri Mahesh Kumar, representing the department submitted that during assessment proceedings, the assessee did not respond to the notices, hence, the assessment was made u/s. 144 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). In First Appellate proceedings, the assessee filed additional evidences before the CIT(A), the CIT(A) sought remand report from the Assessing Officer (AO) without forwarding additional evidences filed by the assessee. Even, books of accounts were not produced by the assessee before the AO. The CIT(A) in violation of the provisions of Rule 46A deleted the additions. The ld. DR furnished a copy of Remand Report dated 30.11.2023 from the AO.
4. Per contra, Shri Deepak Upadhyay appearing on behalf of the assessee submits that the assessee is a Trust registered under section 12A of the Act. In scrutiny assessment proceeding, the AO in an ex-parte proceedings, without rejecting books of account made ad-hoc disallowance of 50% of revenue expenditure. The assessee had furnished additional evidences before the CIT(A). The CIT(A) sought remand (A.Y. 2017-18) report from the AO, the AO did not point any defect in the books of assessee. The CIT(A) after considering additional evidences filed by the assessee and the remand report, granted relief to the assessee. The ld. Counsel submitted that once the remand report has been sought from the Assessing Officer no second change should be given to the AO to re-examine same documents. In support of his submissions, he placed reliance on the decision of Hon’ble Delhi High Court in the case PCIT vs. M/s. Forum Sales P. Ltd. in decided on 01.03.2024.
We have heard the submissions made by rival sides and have examined the orders of authorities below. We have also considered the decision on which the ld. Counsel for the assessee has placed reliance. It is an undisputed fact that the AO had completed the assessment u/s. 144 of the Act. In First Appellate proceedings the assessee furnished additional evidences. The CIT(A) sought remand report from the AO, however, additional evidences filed by the assessee were not sent to the AO at the time of seeking remand report. In absence of any documentary evidences, the AO furnished remand report dated 30.10.2023 categorically highlighting the fact that financial statements and bank ledger filed before the CIT(A) were not forwarded to him, hence, in the absence of said documents he is unable to comment on the same. There is clear violation of Rule 46A of the Income Tax Rules, 1962. The decision on which ld. AR of the assessee has placed reliance would not help the assessee as it is distinguishable on peculiar facts of the instant case. Considering entire facts of the case, we deem it appropriate to restore the matter back to the AO for denovo assessment after considering the evidences filed by the assessee and after affording reasonable opportunity of making submissions to the assessee, in accordance with law.
(A.Y. 2017-18) 6. The assessee is granted liberty to file any other documentary evidence apart from additional evidences filed before the CIT(A). The assessee shall respond to the notice(s) served by the AO, without fail.
In the result, appeal of the Revenue is allowed for statistical purpose. Order pronounced in the open court on Tuesday the 02nd day of September, 2025. Sd/- Sd/- (M. BALAGANESH) (VIKAS AWASTHY) लेखाकार सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER िद�ी/Delhi, �दनांक/Dated 02/09/2025 NV/- �ितिलिप अ�ेिषतCopy of the Order forwarded to : अपीलाथ�/The Appellant , 1. 2. �ितवादी/ The Respondent.