Neeraj Sharma Vs ITO (ITAT Delhi)
Delhi ITAT Restores Ex-parte Assessment & Penalty Where NFAC Refused Additional Evidence Due to Sealed Factory & Death of Assessee
When Death & Sealed Factory Bar Evidence, Ex-parte Assessment Can’t Stand- NFAC’s Refusal of 46A Evidence Backfires: Delhi ITAT Orders De-novo Assessment
Advances for Custom Machinery Not to Be Brushed Aside Without Fair Hearing- Ex-parte Additions & Penalty Fall Together Once Matter Is Remanded
Delhi ITAT ‘B’ Bench in Neeraj Sharma (L/H of Late Om Parkash Sharma) Vs. ITO, Ward-50(1), Delhi [ITA Nos. 65 & 66/Del/2025 and Revenue appeal ITA No. 545/Del/2025, AY 2018-19, order dated 31.12.2025] held that where assessment additions were sustained by NFAC without admitting additional evidence despite genuine constraints, matter deserved restoration to AO. Assessee was engaged in manufacture of customised heavy machinery and had received advances from customers, which AO treated as unexplained credits and taxed by reference to closing-opening difference of sundry creditors. During appellate proceedings, Legal Heir explained that factory premises were sealed during pollution control drive and original Assessee had expired, making it impossible to access records in time, and sought admission of evidence u/r 46A. Tribunal noted that CIT(A)/NFAC ignored evidences merely for want of certain documents like bank statements and failed to appreciate exceptional circumstances. Holding that evidences required thorough examination and opportunity, Tribunal restored assessment to AO for fresh adjudication. Consequentially, Revenue’s appeal on applicability of higher tax u/s 115BBE and penalty appeal u/s 270A were also restored to AO. All appeals were allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT DELHI
