Karam Chand Sweets Vs DCIT (ITAT Chandigarh)
The Income Tax Appellate Tribunal (ITAT) Chandigarh recently allowed an appeal filed by Karam Chand Sweets, setting aside an ex-parte order passed by the Commissioner of Income Tax (Appeals) (CIT(A)). The assessee, a sweet shop owner, had filed their income tax return for the assessment year 2019-20, declaring a total income of Rs. 29,82,510. A survey under Section 133A of the Income Tax Act was conducted at their business premises, during which the assessee surrendered Rs. 21,00,000 as additional income, corresponding to Rs. 27,18,500 by virtue of Section 115BBE.
During the assessment proceedings, the Assessing Officer (AO) noted that the assessee had not paid the tax on the surrendered income as claimed. Consequently, the AO assessed the income as declared and levied tax under Section 115BBE on the additional income surrendered during the survey. Aggrieved by this assessment order, the assessee filed an appeal before the CIT(A).
However, the CIT(A) dismissed the appeal, noting that the assessee failed to appear for hearings despite multiple notices. The CIT(A) concluded that the assessee was not interested in pursuing the appeal. The ITAT, upon reviewing the case, observed that both the AO’s and the CIT(A)’s orders were essentially ex-parte, meaning the assessee had not effectively presented their case at either level. The ITAT emphasized the importance of reasoned orders dealing with the core dispute.
Recognizing the lack of a hearing on merits, the ITAT decided to give the assessee one final opportunity. The ITAT set aside the CIT(A)’s order and remanded the case back to the CIT(A) for a fresh hearing. The ITAT directed the assessee to prepare their case thoroughly and appear without seeking any adjournments. The CIT(A) was instructed to pass a reasoned order, preferably within six months. The assessee’s appeal was allowed for statistical purposes, paving the way for a hearing on the merits of the case.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
