Appeal Delay Excused; Case Remanded for Rehearing on Notice Violation in Income Tax Assessment Enhancement.

The HC condoned a 38-day delay in filing the appeal. The appellant challenged the ITAT's order, which upheld the CIT (Appeals)'s enhancement of assessment without issuing a show cause notice, violating Section 251(2) of the Income Tax Act. The HC found this to be a legal error and remanded the case for rehearing on this issue. The second question related to the assessment order was left open for consideration during the rehearing before the CIT (Appeals). The appeal was disposed of with these directions.

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Issues Involved:
1) Delay Condonation Application
2) Appeal against ITAT order enhancing assessment without show cause notice

Delay Condonation Application (IA No. 2 of 2022):
The delay in preferring the present appeal is only 38 days, and since Mr. Bhatia fairly does not oppose the delay condonation application, the same is allowed for the reasons given in the application. The delay stands condoned.

Income Tax Appeal No. 07 of 2022:
The appellant appealed against the order dated 21.09.2021, passed by the ITAT, in ITA No. 3943/Del/2016: AY 2007-08, dismissing the appeal against the order dated 11.03.2016, passed by the CIT (Appeals), in Appeal No. 343/CIT(A)-1/DDN/14-15, for the Assessment Year 2007-08.

The substantial questions of law are:
a) Whether the ITAT committed an error in not appreciating that the CIT (Appeals) could not enhance the original assessment without issuing a show cause notice as mandated u/s 251(2) of the Income Tax Act, 1961Rs.
b) Whether the final Appellate order dated 21.09.2021, is perverse in upholding additions made without prior show cause notice, which were devoid of any incriminating documentRs.

The appellant, engaged in private coaching and vocational training, declared income for AY 2007-08 below Rs. 1.20 lacs, claiming no need to maintain books of account. The Income Tax Department conducted a search operation, leading to additions in the assessment without a show cause notice, resulting in penalty proceedings.

The Commissioner of Appeals enhanced the cash in hand without issuing a show cause notice as mandated under Section 251(2) of the Income Tax Act. The Court found a violation of the Act and remanded the matter for rehearing on this issue.

The second question regarding the assessment order was left open for the appellant to raise before the Commissioner (Appeals) during the rehearing. The appeal was disposed of accordingly.

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