2014 (3) TMI 367 - AT - Income Tax

ITAT grants appeal due to Assessing Officer's unlawful actions

The ITAT allowed the assessee's appeal challenging the order of the CIT(A) for the Assessment Year 2009-10. The ITAT found that the Assessing Officer's ... Opportunity of being heard - Sufficient time to collect and produce document not given – Held that:- At the far end before the assessment order was passed few opportunities were granted to the assessee - but, the time granted to the assessee could not be sufficient for her to collect all the documents necessary to corroborate and substantiate her claim and satisfy the Assessing Officer – thus, the matter is remitted back to the AO for fresh adjudication – Decided In favour of Assessee. Issues:1. Allegations of the Income Tax Officer passing the order against the law, facts, and natural justice with mala-fide intention.2. Disputes related to the addition of various expenses in the income of the assessee and the nature of the assessee's income.3. Disallowance and addition of specific expenses by the Assessing Officer.4. Lack of sufficient time granted to the assessee to produce necessary documents before the Assessing Officer.5. Appeal against the order of the CIT(A) confirming the Assessing Officer's decision.Analysis:1. The appeal filed by the assessee challenged the order of the ld CIT(A) for the Assessment Year 2009-10, citing that the Income Tax Officer acted against the law, facts, and natural justice with mala-fide intention. The grounds of appeal included the alleged ignorance of genuine expenses and misrepresentation of the nature of the assessee's income.2. The Assessing Officer made additions to the income of the assessee based on discrepancies in the assessment, including the comparison of Gross Profit rate with the previous year, disallowance of specific expenses, and addition of personal expenses. The assessee contended that these additions were unjust and against the accounting system and principles of natural justice.3. The case involved detailed scrutiny of the expenses claimed by the assessee in the income and expenditure account, where the Assessing Officer noted discrepancies and lack of supporting documentation. The Assessing Officer proceeded with the assessment and made significant additions to the total income of the assessee, leading to the appeal before the ITAT.4. The primary grievance raised by the assessee was the insufficient time provided by the Assessing Officer to collect and produce necessary documents to substantiate her claims. The assessee argued that the short period granted was inadequate to comply with the demands of the Assessing Officer, leading to a violation of natural justice principles.5. After hearing the submissions from both parties, the ITAT concluded that the time granted to the assessee was not sufficient to gather the required documents, necessitating a fresh adjudication of the matter. The ITAT set aside the order of the ld CIT(A) and remanded the case back to the Assessing Officer for a reevaluation with adequate opportunity provided to the assessee. The appeal of the assessee was allowed for statistical purposes.This detailed analysis of the legal judgment highlights the key issues raised, the arguments presented by the parties, and the final decision rendered by the ITAT, ensuring a comprehensive understanding of the case.