Tribunal Upholds CIT(A) Decision, Dismissing Revenue's Appeal on Rs. 4.23 Cr Undisclosed Sales for Lack of Due Process.

The Appellate Tribunal ITAT Delhi dismissed the revenue's appeal against the CIT(A)'s order deleting an addition of Rs. 4,23,82,000/- for undisclosed sales in A.Y. 2009-10. The Tribunal confirmed that the Assessing Officer's rectification was improper as it was done without providing the assessee an opportunity to be heard and without specific direction for rectification in the previous order for A.Y. 2010-11. The Tribunal upheld the CIT(A)'s decision, reinforcing the requirement for due process in rectification proceedings.

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Issues involved:
The appeal by the revenue against the order of the CIT(A)-27, New Delhi dated 23.05.2022 pertaining to A.Y. 2009-10.

Issue 1: Addition of undisclosed sales in A.Y. 2009-10
The revenue contested the deletion of an addition of Rs. 4,23,82,000/- made on account of undisclosed sales in A.Y 2009-10, based on the order of Ld. CIT(A) passed for A.Y 2010-11. The CIT(A) held that any addition should be restricted to entries related to the assessment year under consideration. The AR of the appellant argued that entries amounting to Rs. 3,88,50,000/- related to the year under consideration, while Rs. 4,23,82,000/- related to A.Y. 2009-10 and Rs. 59,00,000/- to A.Y. 2008-09. The AO, without direction for rectification for A.Y. 2009-10, made an addition of Rs. 4,23,82,000/- in a subsequent order, which was challenged before the CIT(A). The CIT(A) found the rectification order unsustainable, as the AO rectified the order without affording an opportunity to the assessee. The Tribunal, after careful consideration, upheld the CIT(A)'s decision, noting that no direction was given for rectification for A.Y. 2009-10 in the A.Y. 2010-11 order. The AO's rectification without hearing the assessee was deemed improper, leading to the dismissal of the revenue's appeal.

The legal judgment by the Appellate Tribunal ITAT DELHI addressed the issue of the revenue's appeal against the deletion of an addition of undisclosed sales in A.Y. 2009-10. The Tribunal upheld the CIT(A)'s decision, emphasizing the importance of affording the assessee an opportunity to be heard before making rectifications, especially when no specific direction for rectification was given in a previous order.

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