2020 (8) TMI 587 - AT - Income Tax

Tribunal affirms tax authorities' decisions on ex-parte order & unexplained investments under section 69B

Ajay Baldevbhai Patel Versus The Income Tax Officer Ward-3 (3) (11) Ahmedabad

Ajay Baldevbhai Patel Versus The Income Tax Officer Ward-3 (3) (11) Ahmedabad - [2020] 80 ITR (Trib) 367 (ITAT [Ahm]) Issues Involved:1. Ex-parte order passed by CIT(A) without proper consideration of facts and circumstances.2. Validity of best judgment assessment order passed by AO under section 144.3. Addition of unexplained investment under section 69B of the Act.4. Confirmation of additions made by AO by CIT(A) regarding unexplained investments.Issue 1: Ex-parte order passed by CIT(A) without proper consideration of facts and circumstancesThe appeal was filed against the order of the Commissioner of Income Tax (Appeals) by the Assessee. The Assessee contended that the CIT(A) erred in passing an ex-parte order without proper consideration of facts and circumstances. The Assessee argued that due to the search for a new Authorized Representative (A.R.) and the withdrawal of LOA by the previous A.R., the Assessee presumed they would be given time before any adverse inference. However, the appeal was dismissed as no one appeared on behalf of the Assessee during the hearing, and no adjournment application was filed. The Tribunal proceeded to decide the appeal ex-parte, upholding the CIT(A)'s decision due to the Assessee's lack of interest in pursuing the appeal.Issue 2: Validity of best judgment assessment order passed by AO under section 144The Assessee challenged the best judgment assessment order passed by the Assessing Officer (AO) under section 144. The Assessee argued that the AO did not furnish the copy of AIR information despite being asked, which hindered the Assessee's defense. However, the Tribunal noted that the Assessee failed to explain the impugned investments during the assessment proceedings, leading to additions by the AO. The Tribunal found that the Assessee did not provide new evidence or circumstances to rebut the orders of the revenue authorities. Consequently, the Tribunal upheld the decision of the CIT(A) and rejected the Assessee's grounds.Issue 3: Addition of unexplained investment under section 69B of the ActThe AO made additions under section 69B of the Act on account of alleged unexplained investments. The Assessee contended that the investments were routed through banking channels, originating from transactions with the stock exchange, and lacked adverse material on record. However, the AO and CIT(A) confirmed the additions. The Tribunal observed that the Assessee could not explain the investments despite multiple opportunities, leading to the AO's decision. The Tribunal upheld the CIT(A)'s findings and rejected the Assessee's appeal, emphasizing the Assessee's failure to provide new evidence or challenge the authorities' decisions.Issue 4: Confirmation of additions made by AO by CIT(A) regarding unexplained investmentsThe Assessee raised interconnected grounds challenging the CIT(A)'s confirmation of additions made by the AO regarding unexplained investments under section 69B of the Act. The CIT(A) dismissed the appeal due to the Assessee's inability to explain the investments, despite numerous opportunities provided. The Tribunal found that the Assessee failed to substantiate their case before the revenue authorities and did not present new facts or circumstances during the appeal. Consequently, the Tribunal upheld the CIT(A)'s decision and dismissed the Assessee's appeal.This detailed analysis covers the issues involved in the legal judgment comprehensively, outlining the arguments presented by the Assessee and the decisions rendered by the authorities and the Tribunal.