Gulshan Lal Vs ITO (ITAT Delhi)
ITAT Delhi Remands Ex-Parte Assessment in Gulshan Lal Case – Additions of Unexplained Investment & Creditors to be Re-Examined
Delhi Tribunal dealt with an appeal challenging additions sustained by CIT(A) where both the AO & CIT(A) had completed proceedings ex parte.
Assessee, a book seller, filed return declaring income of ₹8.90 lakh. The case was selected for limited scrutiny to verify two issues – (i) sundry creditors of ₹3.70 crore & (ii) investment of ₹1.52 crore in immovable property. During assessment, assessee failed to respond to notices. Consequently, the AO completed assessment u/s 144 on 13.12.2018, making additions of ₹1.52 crore u/s 69A (unexplained investment) & ₹3.70 crore u/s 69C (unexplained creditors), assessing total income at over ₹5 crore.
On appeal, CIT(A) noted repeated non-compliance & absence of supporting evidence. Assessee sought adjournments but did not file any paperbook or documents. Hence, the appeal was dismissed for non-prosecution & additions confirmed.
Before Tribunal, Assessee remained unrepresented. Department argued that ample opportunities were given but deliberately avoided. On specific query, it was admitted that neither AO nor CIT(A) had examined the issues on merits. Tribunal observed that both lower authorities decided the case ex parte without adjudicating merits. In the interest of natural justice, it set aside the orders & remanded the matter to AO for fresh denovo assessment, with direction to provide adequate opportunity of hearing. The assessee was directed to cooperate in remitted proceedings.
