Badrinath Shreenivas Vs ITO (ITAT Ahmedabad)
Income Tax Appellate Tribunal (ITAT), Ahmedabad, has set aside the assessment order against Badrinath Shreenivas for the Assessment Year 2011-12. The case involved the addition of unexplained deposits and income, totaling ₹24,30,980, under Sections 69 and 144 read with 147 of the Income Tax Act, 1961. The tribunal ruled that the assessment was flawed due to the failure to serve notices at the correct address, denying the assessee a fair opportunity to present evidence.
The Assessing Officer (AO) initiated reassessment proceedings after detecting time deposits of ₹9,07,102 in the assessee’s bank account and receipts of ₹15,23,878, as per Form 26AS. Notices were sent under Section 148, but the assessee claimed he never received them. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the assessment, arguing that notices were sent to the address linked to the PAN. The CIT(A) also rejected additional evidence submitted by the assessee under Rule 46A, stating that it was not presented during the assessment stage.
The ITAT, however, emphasized that procedural compliance must align with the principles of natural justice. It noted that the assessee provided bank statements and supporting documents explaining the source of funds but was denied consideration due to strict adherence to procedural rules. Citing judicial precedents that stress fair opportunity in tax proceedings, the tribunal directed the CIT(A) to admit and evaluate the additional evidence. The case was remanded for fresh adjudication, with instructions to allow the assessee a fair hearing.
