On March 23, 2023, the Income Tax Appellate Tribunal’s Delhi Bench ‘A’ reviewed the case of Avantha Reality Limited against the decision of the Income Tax Officer, Circle-17(1), New Delhi, for the assessment year 2007-08. This appeal was triggered by the CIT(A) order dated July 30, 2020, which upheld a substantial addition of Rs. 5,00,00,000 to the assessee’s income, alleged as unexplained share application money.
The primary grievance of Avantha Reality was the CIT(A)’s decision during the COVID-19 lockdown without proper opportunity for a hearing, arguing this violated principles of natural justice. The case was further complicated by procedural challenges and the appellant’s inability to represent itself adequately during the lockdown periods imposed by the government, impacting the proceedings significantly.
The case also revisited the merits of the additions based on share application money where the appellant contested the additions citing adequate documentation and explanations that were disregarded in the earlier proceedings. The Tribunal considered these issues comprehensively, focusing on the need for a fair hearing and proper consideration of evidence which had been submitted in support of the genuineness of the transactions involved.
The Tribunal’s decision to remand the case back to the CIT(A) for a de novo hearing underscores the judiciary’s commitment to ensuring fairness in judicial proceedings, especially during unprecedented times such as a pandemic. This case serves as a crucial example of the judiciary’s role in balancing procedural fairness with substantive justice, providing significant insights into the handling of complex tax disputes related to corporate transactions.
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