Expecting assessee to submit voluminous details at fag end in a short period of time was unjustified – ITAT

Expecting assessee to submit voluminous details at fag end in a short period of time when AO kept assessment proceedings dormant for one year was unjustified – ITAT

ABCAUS Case Law Citation:
ABCAUS 2565 (2018) (10) ITAT

Important Case Laws Cited/relied upon by the parties:
Pr.CIT Vs. Ashokji Chanduji Thakor

The appellant assessee was aggrieved by the order of CIT(A) in upholding additions by an order passed ex parte without providing proper opportunity of hearing to the assessee.

In the instant case, AO assessed the income of the assessee at hundred times more than the one declared by him.

The Tribunal observed that the notice under section 143(2) was validly served well in time. Thereafter, proceedings remained dormant for one year. Thereafter, notice was issued exactly after one year and 21 days. The AO then took the proceedings seriously and issued questionnaire. In compliance to the questionnaire, the assessee put his appearance and submitted part details.AO again towards the last fortnight of March again issued notice and called for certain details, which were routinely mentioned in the first notice. Ultimately, the AO passed the assessment order on 31.3.2016.

The CIT(A) had dismissed the appeal of the assessee ex parte for non appearance on three occasions. The assessee has submitted submissions on the receipt counter of the department. These details were though recognized by the CIT(A) in his order but he did not take cognizance of the details.

The Tribunal opined that the AO had seriously applied his mind only for last 10 to 15 days. He had allowed the assessment proceedings to remain dormant for more than one year, then at a fag end started investigation and expected the assessee to submit voluminous details which could not be submitted in such a short period of time. This was not a proper manner in which the assessment order ought to be conducted.

The Tribunal observed that Sub-section (6) of section 250 of the Income Tax Act contemplates that the CIT(A) would state point in dispute, and thereafter record reasons in support his conclusions.

In the instant case, the impugned order was passed almost after five months from the last date of hearing meaning that the appeal remained pending before the CIT(A) for orders for more than 5 months.

The Tribunal expressed displeasure with this approach at the end of the CIT(A) and opined that If he had no time to adjudicate the appeal and dictate the order, then atleast in the interest of justice, he should have granted one or two more opportunities to the assessee. It should have taken cognizance of the details filed by the assessee.

The Tribunal opined that Quasi-judicial authorities are not being respected on account of their powers to legalise injustice on technical grounds, but because they are capable of removing injustice and is expected to do so.

The Tribunal stated that even if it was assumed that the assessee was negligent in prosecuting his income tax proceedings before the Revenue authorities, then also it was to be kept in mind that addition to the extent of 100% was made to his income. Punishment in the shape of tax liability on this addition was  disproportionate to the negligence, which otherwise appears to be a contributory negligence. The AO could impose penalty under section 271(b) for not furnishing the details. Interest would be chargeable upon the assessee on the additional income assessed in his hand. But the authorities ought to be little live to the expectation and concern of the litigants. They cannot frame assessment order in in routine manner without taking cognizance to the difficulties faced by an assessee.

The orders of the Revenue authorities was set aside and the issue was remitted to the file of the AO for re-adjudication.

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