Facts of the Case

The assessee, Shri Ashish Dwivedi, filed his return of income for Assessment Year 2014-15. The case was selected for scrutiny.

During assessment proceedings, the Assessing Officer completed the assessment in the absence of the assessee by invoking provisions relating to best-judgment assessment. Additions were made on the basis of available information due to non-compliance with notices.

Aggrieved by the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who upheld the action of the Assessing Officer.

Issues Involved

Whether an assessment framed ex-parte under best-judgment provisions without granting adequate and effective opportunity of hearing to the assessee is legally sustainable.

Petitioner’s Arguments (Assessee)

  • The assessment was completed without proper opportunity to present evidence and explanations.
  • Non-appearance was not intentional and occurred due to circumstances beyond control.
  • The Assessing Officer made additions without verifying facts or considering relevant material.
  • The assessee requested that the matter be restored for fresh adjudication with an opportunity to comply.

Respondent’s Arguments (Revenue)

  • The Revenue contended that the assessee failed to comply with statutory notices despite opportunities.
  • Therefore, the Assessing Officer was justified in completing the assessment on the basis of available records.
  • The order of the Commissioner (Appeals) confirming the assessment was argued to be proper.

Court Order / Findings (ITAT Allahabad)

  • Assessment proceedings are quasi-judicial in nature and must conform to principles of natural justice.
  • Even in cases of non-compliance, the Assessing Officer must ensure reasonable opportunity is provided before making additions.
  • The record indicated that the assessment had been completed without effective participation of the assessee.
  • In the interest of justice, the matter required fresh examination after granting adequate opportunity.

Important Clarification

The Tribunal did not adjudicate the merits of the additions. The relief granted is procedural, ensuring that the assessee receives a fair opportunity to present evidence before a fresh assessment is completed.

Link to download the order –

https://itat.gov.in/public/files/upload/1618307962-ITA%20%20158%20%20of%202019%20%20%20Ashish%20Dwivedi.pdf

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