Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (2) TMI 1020 - AT - Income TaxConversion of protective addition into a substantive addition - violation of principles of natural justice - Held that:- In the case on hand, there was violation of principles of natural justice. No proper opportunity was given to the assessee. The AO extensively relied on a report called “appraisal report.” This finds mention on pages 24, 26, 49 and 56 of the assessment order. In case the AO relies on a report of any authority, natural justice demands that, a copy of that report be made available to the assessee, so as to enable him to place his contentions on the same. If the Revenue cannot furnish this report to the assessee on the ground of confidentiality, then, no addition whatsoever can be made in the hands of the assessee based on this report. A statement was recorded from one Shri Rajesh Aggarwal. A copy of the statement was also not furnished to the assessee, though the AO relied on this statement for making certain additions. Evidence was gathered during the search of Jagat Group and these evidences were also not confronted to the assessee. We also find that the assessment order was framed in a hurry, possibly due to constraint of time. Though the notice u/s 153A was given on 1.5.2012, show cause notices were issued only on 5.2.2013, 8.2.2013 and 14.2.2013. The assessee gave a reply on 8.3.2013 and the assessments were framed on 28.3.2013. Though the AO had written a very detailed order, we find that the contention of the assessee that, material relied upon by the AO in his orders were not confronted to the assessee is correct. The contents of the show cause notices does not conform to the reasoning in the assessment order. Similarly, the first appellate authority has converted the protective addition made by the AO into a substantive addition without specifically confronting the assessee with such a proposal. The commission income was also bifurcated on ad hoc basis by the ld.CIT(A) without giving any opportunity to the assessee. Though the assessee has pleaded violation of principles of natural justice, the ld.CIT(A) did not address the objection by providing adequate opportunity by furnishing the evidences and by calling for the remand report on these issues from the AO. In view of the above as there is violation of principles of natural justice all these appeals should be set aside to the file of the AO for fresh adjudication in accordance with law.
|