Prabha Jain vs ITO – Appeal Against Addition Due to Lack of Opportunity (AY 2011-12)

Prabha Jain vs ITO – Appeal Against Addition Due to Lack of Opportunity (AY 2011-12)

Case Number: ITA 6536/DEL/2019

Appellant: Prabha Jain, Delhi

Respondent: ITO, Ward-47(2), New Delhi

Assessment Year: 2011-12

Order Type: Final Tribunal Order

Date of Order: 2021-10-21

Pronounced on: 2021-10-21

Introduction

This case concerns an appeal filed by Mrs. Prabha Jain against the order passed by the Income Tax Officer (ITO), Ward-47(2), New Delhi, for the assessment year 2011-12. The primary issue in the appeal was the confirmation of additions made by the Assessing Officer (AO) without providing sufficient opportunity for the appellant to present her case. The Tribunal reviewed the appeal and decided to set aside the order of the Commissioner of Income Tax (Appeals) [CIT(A)], directing a fresh evaluation of the case with adequate opportunity for the appellant.

Background of the Case

Mrs. Prabha Jain, the appellant, had filed her return of income for the assessment year 2011-12. During the assessment proceedings, the AO made certain additions to her income, which were partly confirmed by the CIT(A) on appeal. The additions related to the non-submission of confirmations of old debtors, leading to an addition of Rs. 3,97,320 to her income.

The appellant argued that she had submitted the necessary confirmations to the CIT(A) and that the CIT(A) had passed the order without giving her a proper opportunity to address the deficiencies noted in the evidence submitted. The appellant also highlighted that she was not given enough time to present additional documentary evidence, which could have substantiated her claims.

Proceedings Before the Tribunal

The appeal was brought before the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘SMC’, presided over by Judicial Member Smt. Diva Singh. The Tribunal observed that on multiple occasions when the appeal was scheduled for hearing, the appellant was either not present or not represented. Despite this, the Tribunal decided to proceed with the case based on the material available on record.

The Tribunal noted that the CIT(A) had accepted fresh evidence submitted by the appellant, which led to the deletion of additions related to 12 trade debtors. However, the CIT(A) confirmed the additions related to 8 trade debtors due to what was deemed insufficient evidence. The appellant contended that she was not informed about the deficiencies in the evidence submitted and was not given a chance to rectify these issues.

Tribunal’s Observations and Findings

The Tribunal recognized that the appellant had faced challenges during the assessment proceedings, particularly due to her husband’s chronic illness, which impacted her ability to participate fully in the process. The Tribunal found merit in the appellant’s grievance that the deficiencies noted by the CIT(A) were not communicated to her, thus denying her the opportunity to address them effectively.

The Tribunal emphasized the importance of providing a fair opportunity to the taxpayer to present their case, especially when significant additions to income are involved. The Tribunal noted that while part of the additions was deleted based on the evidence submitted, the remaining additions were confirmed without proper communication of the deficiencies, which was not in line with the principles of natural justice.

Conclusion and Ruling

After considering the submissions of the Senior Departmental Representative (DR) and reviewing the records, the Tribunal deemed it appropriate to set aside the impugned order of the CIT(A) regarding the confirmed additions. The Tribunal directed the CIT(A) to re-evaluate the case and provide the appellant with a fair opportunity to present all necessary supporting evidence.

The Tribunal instructed the appellant to fully participate in the proceedings and provide all relevant documentation to support her claims. The Tribunal also cautioned that the opportunity provided should not be abused, and the appellant should ensure timely and comprehensive participation.

Order: The appeal of Mrs. Prabha Jain is allowed for statistical purposes, with the case remanded to the CIT(A) for fresh consideration.

This decision underscores the importance of upholding the principles of natural justice and ensuring that taxpayers are given adequate opportunity to present their case, especially when procedural deficiencies are identified.

Prabha Jain vs ITO – Appeal Against Addition Due to Lack of Opportunity (AY 2011-12)