Jitendra M. Kitavat Vs ITO (ITAT Mumbai Bench)
Accommodation Entry Addition Cannot Rest on Documents Kept Away From Assessee: ITAT Grants Fresh Opportunity & Directs AO to Supply All Relied-Upon Material
Summary: The assessee-HUF challenged an ex parte appellate order passed by the CIT(A), NFAC, sustaining the addition made by the AO for AY 2017-18. Before the Tribunal, the assessee explained that it could not effectively participate either in the assessment proceedings or in the proceedings before the CIT(A). Consequently, the assessment and first appellate orders were passed without considering the assessee’s complete explanation and supporting documentary evidence.
The Karta of the assessee-HUF, Shri Jitendra M. Kitavat, filed a detailed affidavit explaining the circumstances behind the non-compliance.
According to the affidavit, the HUF’s business had suffered severe financial losses, leading to an acute financial crisis. Its financial position deteriorated to such an extent that it was ultimately compelled to discontinue its business operations.
The closure of the business placed the Karta under considerable financial and mental pressure. His time and attention were occupied in dealing with creditors, settling outstanding liabilities, arranging funds for the family’s livelihood and managing the consequences of the business closure.
In these circumstances, he was unable to properly attend to the income-tax proceedings or coordinate effectively with the tax consultant for filing timely replies and supporting documents.
