ITAT restore the matter to CIT(A) to decide it on merits when assessee is not interested in pursuing appeal

The brief facts of the case is that during the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee company has received share capital of Rs. 6.60 lakhs from its foreign director at a premium of Rs. 3,29,34,000/-. The assessee was asked to explain the transaction in light of provisions of section 68 of the Income Tax Act, 1961 (The Act). The assessee furnished valuation report and necessary evidences in support of share premium. The Assessing Officer was not satisfied with the explanation of the assessee. The Assessing Officer was of the opinion that the assessee has failed to establish the genuineness and credit worthiness of the investor and proceeded by making an addition of Rs. 3,35,94,800/.

The assessee carried the matter before the ld. CIT(A) but for some reason, could not attend the proceedings before the appellate authority. Referring to the decision of the Hon’ble Supreme Court in the case of B.N. Bhattachargee and Others 118 ITR 461, the ld. CIT(A) observed that the assessee is not interested in pursuing its appeal and went on to confirm the addition made by the Assessing Officer.

Before tribunal, assessee stated that he has furnished all necessary evidences in support of genuineness of transaction. It is the say of the ld. counsel for the assessee that the assessee has also furnished details regarding capacity of foreign director to make the impugned payment. ITAT observed that appeared before the ld. CIT(A) who was convinced that the assessee did not want to pursue the appeal and, therefore, drew support from the decision of the Hon’ble Supreme Court in the case of B.N. Bhattachargee and Other [supra]. ITAT in its order held that the first appellate authority ought to have considered the documentary evidence brought on record by the assessee. Therefore, in the interest of justice and fair play, we deem it fit to restore the appeal to the file of the CIT(A). The ld. CIT(A) is directed to decide the appeal afresh after affording reasonable and sufficient opportunity of being heard to the assessee.

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