2013 (8) TMI 1179 - AT - Income Tax

Appeal partly allowed, income enhancement deleted due to lack of opportunity. Alleged concealment of income rejected.

The Tribunal partly allowed the appeal, deleting the income enhancement made by the CIT(A) due to lack of opportunity provided to the appellant. Other ... - Issues involved: Appeal against CIT(A) order on grounds of income enhancement without opportunity u/s 251(2), alleged concealment of income, reliance on incorrect case law, distinction between revised and corrected return, and lack of notice for income enhancement.Income enhancement without opportunity u/s 251(2): The appellant challenged the income enhancement by CIT(A) without providing an opportunity u/s 251(2) of the Income-tax Act, 1961. The appellant contended that failure to give such an opportunity vitiates the assessment and appellate order. The Tribunal held that the CIT(A) cannot enhance an assessment without affording the appellant a reasonable opportunity to show cause against such enhancement. As the appellant was not given this opportunity, the income enhancement made by the CIT(A) was deemed unsustainable in the eyes of the law. Therefore, the Tribunal deleted the enhancement amount.Alleged concealment of income: The CIT(A) had held that the appellant concealed income by furnishing inaccurate particulars, a claim disputed by the appellant. The Tribunal noted that the issue of concealment or inaccurate particulars is relevant for penalty proceedings u/s 271(1)(c) of the Act, not for the current appeal. Consequently, the Tribunal found no merit in this ground and rejected it.Reliance on incorrect case law: The appellant argued that the CIT(A) wrongly relied on a specific case law which was not applicable to the facts of the case, while ignoring a decision of the jurisdictional High Court. The Tribunal observed that the correctness of case law application is not a ground for the current appeal and thus dismissed this argument.Distinction between revised and corrected return: The appellant contended that there was a difference between a revised return and a correction of return, asserting that any errors were computation errors, not inaccurate particulars. The Tribunal held that this distinction was not relevant to the current appeal and therefore rejected this ground.Lack of notice for income enhancement: The appellant raised the issue of lack of notice for the income enhancement made by the CIT(A). The Tribunal emphasized that u/s 251(2) of the Act, the CIT(A) must provide a reasonable opportunity for the appellant to show cause against any enhancement. Since no such opportunity was given in this case, the Tribunal deemed the enhancement unsustainable and consequently deleted the same.Conclusion: The Tribunal partly allowed the appeal of the assessee, deleting the income enhancement made by the CIT(A) due to the lack of opportunity provided to the appellant. The other grounds raised were deemed irrelevant for the current appeal and were rejected.