ITAT Delhi Judgments — July 2017

The tribunal dismissed the appeal for non-prosecution, citing the principle that the law aids the vigilant. The assessee was granted liberty to apply for setting aside the order by explaining the reasons for non-appearance.

The Tribunal held that since the original addition on which the penalty was based was set aside, the penalty itself is consequential and also needs to be set aside. The matter is restored to the Assessing Officer for fresh consideration.

The Tribunal held that a special audit report directed during assessment proceedings, after the search, cannot be treated as incriminating material found during the search to justify additions under Section 153A. The additions were not sustainable in the absence of such material and abated assessments.

The Tribunal held that since the additions forming the basis of the penalty were deleted and affirmed by the High Court, the penalty was not justified. Following the Supreme Court's decision in K.C. Builders, the penalty cannot survive if the assessment itself is set aside.

The tribunal held that the CIT(A) passed an ex-parte order without providing an effective opportunity of being heard, violating the principle of natural justice. The order was set aside, and the matter was restored to the CIT(A) for fresh adjudication.