CIT(A)’s Non-Speaking Order denies Assessee Fair Hearing: ITAT directs Reassessment [Read Order]

In a recent case, the Delhi bench of Income Tax Appellate Tribunal ( ITAT ) held that the non- speaking order passed by Commissioner of Income Tax (Appeals) denied the assessee a fair opportunity of being heard. The Assessee, Anita Dabas, is an individual taxpayer who made a significant cash deposit of Rs. 49,93,000 in her bank account at Oriental Bank of Commerce in Ghaziabad during the demonetization period This deposit, given it was made during the demonetization period, immediately attracted the attention of the Assessing Officer (AO). Further scrutiny by the AO revealed that the Assessee had not filed her return of income under Section 139(1) of the Income Tax Act (ITA) for the relevant assessment year, 2017-18. Get a Copy of Bharat’s Income Tax Act, Click here In response to this non-compliance, the AO issued a notice under Section 142(1) of ITA, instructing the assessee to file her return. However, despite this notice and subsequent reminders, the assessee failed to respond or provide the necessary documentation. Due to the lack of cooperation, the AO proceeded to complete the assessment based on his best judgment under Section 144 of the tax statute. In this judgment-based assessment, the AO not only added back the Rs. 49,93,000 cash deposit made during the demonetization period but also scrutinized other credit entries in the Assessee's bank account. These entries amounted to Rs. 79,90,000, which the AO treated as business receipts. Applying a standard net profit rate of 8%, the AO further added Rs. 6,39,200 to the assessee’s taxable income, concluding that these amounts represented undeclared business income. Get a Copy of Bharat’s Income Tax Act, Click here The assessee, disagreeing with the AO's conclusions and the methodology used in the assessment, contested the additions before the CIT (A). However, the assessee's appeal was dismissed, and the additions made by the AO were upheld. Aggrieved by the outcome, the assessee appealed against the decision before the ITAT. Before the tribunal, the assessee argued that the appeal was dismissed through a non-speaking order, which is an order that does not provide reasons or address the arguments raised by the assessee. The assessee further contended this denied her a reasonable opportunity to be heard, despite specifically requesting a hearing before the CIT(A). The Departmental Representative, however, opposed this contention, maintaining that the procedures had been followed correctly. Get a Copy of Bharat’s Income Tax Act, Click here The bench of Mr Saktijit Dey and Mr Rifaur Rahman, after examining the facts of the case , observed that it was apparent that the Assessee had not been given adequate opportunity to present her case during the assessment proceedings, or before the CIT(A). It was observed that the assessment had been completed ex parte, based on the AO's best judgment, due to the assessee’s alleged non-compliance. Thus, the Tribunal recognized that the Assessee had not been afforded a fair chance to contest the additions with appropriate evidence. In light of these considerations, the Tribunal decided to remand the case back to the AO. It instructed the AO to reconsider the issues raised in the appeal and to provide the Assessee with a proper opportunity to present her evidence. Additionally, the Tribunal urged the Assessee to cooperate fully with the AO during this fresh adjudication process. The appeal was allowed for statistical purposes, giving the assessee another opportunity to defend her position. Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates

CIT(A)’s Non-Speaking Order denies Assessee Fair Hearing: ITAT directs Reassessment [Read Order]

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CIT(A)’s Non-Speaking Order denies Assessee Fair Hearing: ITAT directs Reassessment [Read Order]

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