Addition by CIT(A) without Opportunity to Assessee is invalid

Brief Facts of the Case

At the outset, Ld.AR for the assessee Mr.N.C. Amin submitted that all these grounds emanate on account of enhancement action by the CIT(A) in terms of his co-terminus power. The Ld.AR further stated in elaboration that none of these issues are arising from the assessment The Ld.AR contended that no enhancement notice was issued and served on the assessee by the CIT(A) while invoking its power under s.25 1(1)(a) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). The Ld.AR accordingly submitted that the action of the CIT(A) grossly offends the principle of natural justice as spelt in section 251(2) of the Act.

Held by ITAT

We straight away agree with the contentions raised on behalf of the assessee. Section 251(2) provides that the Commissioner (Appeal) shall not embark on enhancement of an assessment unless the assessee has been granted a reasonable opportunity of showing cause against such We find no reference to the issuance of enhancement notice in the appellate order of the CIT(A). Ostensibly, powers conferred under s.251(1)(a) of the Act has been exercised without following the due procedure mandated in the section itself. The action of enhancement by the CIT(A) is thus unsustainable in law and is therefore required to be set aside. The matter is therefore restored back to the file of the CIT(A) for fresh determination after giving proper opportunity to the assessee in terms of section 251(2) of the Act.