Late Gurupadappa Mallappa Havinal Vs (ITAT Bangalore)
Ex-parte Enhancement Without Notice Unsustainable: ITAT Restores Credit Addition to CIT(A)
The Bangalore SMC Bench of the ITAT set aside the ex-parte appellate order passed by the CIT(A) and restored the entire matter back to the file of the CIT(A) for fresh adjudication on merits, holding that the Assessee was denied a proper opportunity of hearing and that enhancement was made without issuing notice u/s 251.
The Assessee, an individual pensioner, had originally filed his return for AY 2012-13, which was accepted u/s 143(1). Subsequently, a survey u/s 133A was conducted at the business premises of the Assessee’s son, during which certain loose sheets were found. Based on these, the AO reopened the assessment u/s 148 and made an addition of ₹11.86 lakh by treating the amount standing as credit in the name of the son’s143 concern as unexplained investment/credit u/s 69/68.
On appeal, the CIT(A) passed an ex-parte order confirming the addition. More importantly, while the AO had added about ₹11 lakh, the CIT(A) confirmed a total addition of about ₹22 lakh, without any indication of issuing a show-cause notice for enhancement u/s 251.
Before the Tribunal, it was submitted that the Assessee had since passed away, legal heirs were brought on record, and the appellate order suffered from violation of principles of natural justice.
The Tribunal observed that:
