Assessee should get full opportunity at every stage of adjudication, tax laws are not penal – ITAT

Assessee should get full opportunity at every stage of adjudication. Tax laws are not penal and neither so rigid to curb lawful rights of taxpayers-ITAT

The instant appeal was filed by the appellant assessee This against the order of the CIT(A) upholding the action of the Assessing Officer (AO) in rejecting the revised return of income on the ground that it was not filed within the prescribed time and treating the income as unexplained cash credits u/s 68 of the Income Tax Act, 1961 (the Act).

ABCAUS Case Law Citation:
ABCAUS 2328 (2018) (05) ITAT

Important Case Laws Cited/relied upon by the parties:
GOETZE (India Ltd.) vs. CIT

Assessee should get full opportunity at every stage of adjudication

The assessee during the assessment proceedings, filed a revised return and submitted revised computation, profit & loss account showing details of the revised income. However, the AO relying on the judgment of the Hon’ble Supreme Court refused to consider the revised details and documents on the ground that revision of return was permissible if made under the provision of section 139(5) of the Act. He treated such income as unexplained credits in the accounts of the assessee and added to the total income.

The CIT(A) dismissed the appeal by holding that Since the appellant did not revise his ITR therefore, the AO had correctly relied on the decision of Hon’ble Supreme Court.

The Tribunal observed that the assessee had stated that the revised return was filed on time with all evidences and other relevant documents, but in the Assessing Officer’s order it was stated that revised return was not filed within time and the CIT(A) had made an observation that appellant did not revise his ITR, therefore, any variation in claim under various heads of income and expenditure has correctly not been considered by Assessing Officer and taken into consideration while framing the scrutiny assessment, which means that since revised return was not in accordance with section 139(5), it was not considered as revised return at all.

The ITAT observed that it was not disputed that revised return was filed with all revised details of balance sheet and profit & loss account. What was to be seen was whether revised return was filed according to the statutory provisions and as per time limit framed within the Act. Also, there were additions made by the Assessing Officer since the assessee was unable to provide evidences regarding the same.

The assessee pleaded for an opportunity to present their case on merit before the Assessing Officer and stated that revised details and return were filed on time as per section 139(5) of the Act and moreover he has got all the relevant evidences and documents to fight his case before the Assessing Officer.

The Tribunal observed that the tax legislation have always been looked at as welfare legislation and whenever possible as per principles of natural justice and equity, the assessee have been given opportunity.

The Tribunal appreciated that it is the tax payers from whom revenue is collected, therefore, full opportunity at every stage of adjudication should be given to the assessee and revenue laws are not penal laws and neither so rigid to curb lawful rights of taxpaying assessee.

Accordingly, the Tribunal set aside the order of the CIT(A) and restored the matter to the file of the Assessing Officer for factual verification as pleaded by the assessee.

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