Case Law Details
Maha Singh Vs ITO (ITAT Delhi)
Introduction: In the case of Maha Singh vs ITO, the Income Tax Appellate Tribunal (ITAT) Delhi has granted a fresh adjudication of a previous order. The issue pertained to unexplained cash deposits in the assessee’s saving bank account, which led to an income tax addition under the Income Tax Act, 1961. However, the ITAT set aside the exparte order, citing procedural deficiencies and a violation of natural justice principles.
Analysis: The appeal by Maha Singh argued that the Commissioner of Income Tax (Appeals)-Ghaziabad had confirmed the reassessment order without proper jurisdiction and without complying with the mandatory conditions set under sections 147 to 151 of the Income Tax Act. It was further claimed that the addition of Rs. 78,86,270/- on the ground of unexplained cash deposits was unjustified and was made without observing the principles of natural justice.
The most significant point of contention was that the CIT(A) had decided the case ex parte, without offering the appellant a fair opportunity to present their case. This was attributed to an incorrect address mentioned in the CIT(A)’s order, which led to non-receipt of hearing notices by the appellant.
After assessing the facts presented, the ITAT found merit in the appellant’s contention and concluded that the CIT(A) failed to follow due process as required by Section 250(6) of the Act. As a result, the ITAT set aside the order of the CIT(A) and restored the matter for re-adjudication, ensuring a fair chance for the appellant to present their case.
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