2020 (4) TMI 748 - AT - Income Tax

Tribunal sets aside CIT(A) decision in tax dispute case, orders fresh decision due to procedural irregularities.

Dy. Commissioner of Income Tax Circle-1, Ghaziabad Versus Shri Davinder Singh Chawla  

Dy. Commissioner of Income Tax Circle-1, Ghaziabad Versus Shri Davinder Singh Chawla   - TMI Issues:1. Challenge to the appellate order dated 30.03.2016 passed by the Learned Commissioner of Income Tax (Appeals)- Ghaziabad for Assessment Year 2011-12.Analysis:Grounds of Appeal Raised by the Assessee:1. The appellant challenged the deletion of an addition of Rs. 1,44,00,000 due to failure in proving the capacity, identity, and creditworthiness of the lenders.2. The appellant contested the deletion of the same addition, citing the requirement to establish the identity, capacity, and genuineness of creditors as per judicial decisions.3. Dispute arose regarding the deletion of an addition under section 2(22)(e) of the I.T. Act amounting to Rs. 1,13,83,287, considering the substantial interest of the assessee in the lending companies.4. The appellant objected to the deletion of the above addition despite not providing any explanation during the assessment proceedings.5. The appellant sought to set aside the order of the Ld. CIT(A) and restore that of the Assessing Officer.Assessment Order and Appellate Proceedings:The total income of the assessee was determined at Rs. 4,47,87,970 in the assessment order dated 31.03.2014 under section 143(3) of the Income Tax Act, deviating significantly from the returned income of Rs. 17,01,775. Subsequently, the Ld. CIT(A) partially allowed relief to the assessee while upholding certain additions made under sections 68 and 2(22)(e) of the Income Tax Act.Judgment and Observations:The Revenue appealed against the Ld. CIT(A)'s order, with the assessee failing to appear or be represented during the proceedings. The Ld. Departmental Representative contended that the additional evidences submitted by the assessee during the appellate proceedings were not explicitly admitted by the Ld. CIT(A) and should be disregarded. Upon review, the tribunal found that while partial relief was granted based on these additional evidences, the Ld. CIT(A) did not record reasons or provide a reasonable opportunity to the Assessing Officer to examine or rebut the evidence. Consequently, the tribunal set aside the Ld. CIT(A)'s order and directed a fresh decision in compliance with Rule 46A of the Income Tax Rules.Conclusion:The appeal was partly allowed for statistical purposes, emphasizing the necessity for due procedure and compliance with the rules during appellate proceedings. The judgment highlighted the importance of providing a fair opportunity for all parties involved in tax disputes to present their case effectively.