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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
O R D E R
PER PAVAN KUMAR GADALE JM:
The assessee has filed the appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi /CIT(A) passed U/Sec144 and 250 of the Act. The assessee has raised the following grounds of appeal:` 1) The Commissioner of Income-tax (Appeals)'s, NFAC (hereinafter referred to as CIT(A)) order in upholding the additions of Rs. 2,30,83,724/- made by assessing officer, Circle-2, Kalyan (hereinafter referred to as A.O) is entirely
Jaya Tarun Kukreja, Mumbai. - 2 - contradictory to law and facts of the case. (Tax effect: 6,99,340/-)
2) On the facts and in the circumstances of the case and in law the CIT (A) erred in upholding the assessment made u/s. 144 passed by A.O, which is bad in law and without jurisdiction and by ignoring the past records and details submitted by the appellant. (Tax effect: 6,99,340/-)
3) On the facts and in the circumstances of the case and in law the CIT (A) erred in upholding the additions of Rs. 2,30,83,724/- made by A.O and by accepting the facts that no show cause notice was served on the appellant before making best assessment. (Tax effect: 6,99,340/-)
4) On the facts and in the circumstances of the case and in law the CIT (A) erred in upholding the additions of Rs. 2,30,83,724/- made by A.O by not considering details submitted by the appellant and by accepting the fact that assessment order was digitally signed on 14/12/2019 and accordingly same was served on or after 14/12/2019. (Tax effect: 6,99,340/-)
5) On the facts and in the circumstances of the case and in law the CIT (A) erred in upholding the additions of Rs. 2,30,83,724/- made by A.O by ignoring the fact that order of A.O as well as CIT (A) are not speaking orders as the same were passed in an arbitrary manner without assigning any reasons thereof and on the basis of some decisions which are not relevant for the appellant's case. (Tax effect: 6,99,340/-)
Jaya Tarun Kukreja, Mumbai. - 3 - 6) On the facts and in the circumstances of the case and in law the CIT (A) erred in upholding the estimation of Rs. 28,64,224/- made by A.O by estimating net profit @2% of turnover and by ignoring the fact that the provisions of section 145(3) are not applicable in appellant's case and without pointing out any defects from the explanation submitted. (Tax effect: 1,66,02,709/-)
7) On the facts and in the circumstances of the case and in law the CIT (A) erred in upholding the additions towards deemed income of Rs. 2,02,19,500/- u/s. 69A made by A.O without appreciating that the provisions of Section 69A are not applicable in appellant case as cash deposits are sales proceeds and no defect was pointed out from the explanation of the appellant. (Tax effect: 15,38,237/-)
8) On the facts and in the circumstances of the case and in law the CIT (A) erred in applying the provisions of section 115BBE by ignoring the facts that the cash deposits are sales and income from sales were accepted by the A.O under the head income from business or profession. (Tax effect: 6,99,340/-)
9) On the facts and in the circumstances of the case and in law the CIT (A) erred in upholding the additions of Rs. 2,30,83,724/- made by assessing officer, by grossly violating the principles of natural justice and passed appellate order in an arbitrary manner. (Tax effect: 6,99,340/-)
Jaya Tarun Kukreja, Mumbai. - 4 - 10) The reasons mentioned in the order are contrary to facts and law. 11) The appellant craves leave to add, amend, modify, and alter any grounds of appeal at the time of hearing. PRAYER The appellant prays to annul the best judgment assessment made u/s. 144 and/or the additions uphold by CIT(A) of Rs. 2,30,83,724/- made by A.O may please be vacated and any other relief may please be granted as may deem fit a just under the facts a circumstances of the case.
2. The brief facts of the case are that the assessee is engaged in the business as a wholesaler and distribution of products. The assessee has filed the return of income for the A.Y 2017-18 on 07.11.2017 disclosing a total income of Rs.28,46,570/-. Subsequently, the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act along with questionnaire was issued, but, there was no compliance to the notices. Further the Assessing Officer(AO) has provided one more opportunity of hearing to the assessee and even now there was no compliance, hence the AO has applied the provisions of best judgment assessment u/s 144 of the Act and Jaya Tarun Kukreja, Mumbai. - 5 - based on the informational available on record found that the assessee has disclosed a turnover and showed a meager profit and in spite of providing several opportunities, the assessee has not submitted the informational and explanations, therefore the AO has estimated the income @ 2% of the turnover which worked out to Rs28,64,224/-.Similarly, the AO found that there are cash deposits in the assessee bank account during demonetization period and since the assessee has failed to comply to the notices and no information was submitted. The AO has made addition of cash deposits as unexplained U/sec69A of the Act of Rs. 2,02,19,500/- and assessed the total income of Rs. 2,59,30,300/- and passed the order u/s 144 of the Act dated 08.12.2019.
Aggrieved by the order, the assessee has filed an appeal with the CIT(A), whereas the CIT(A) considered the grounds of appeal, submissions of the assessee and findings of the AO and has confirmed the additions and dismissed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed the appeal with the Honble Tribunal.
Jaya Tarun Kukreja, Mumbai. - 6 -
At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in confirming the action of the Assessing officer. Further, the assessee has a good case on merits and shall substantiate with the material evidence and prayed for an opportunity to explain before the lower authorities. Contra, the Ld. DR supported the order of the CIT(A).
We heard the rival submissions and perused the material on record. The Ld.AR submitted that the CIT(A) has erred in sustaining the additions made by the A.O. overlooking the explanations and material information filed. Further the order passed by the assessing officer is under Section 144 of the Act. When a query was raised to Ld.AR for the reasons for non appearance before the A.O,the explanations are not convincing. We considering the facts, circumstances and the A.O. has passed best judgment assesseement order U/sec 144 of the Act and there could be various reasons for non appearance which cannot be overruled and shall provide one more opportunity of hearing to the assessee to substantiate the case with evidences and information and we are of the opinion that the Jaya Tarun Kukreja, Mumbai. - 7 - assessee should not suffer for non filing of material information, as the evidences played vital role in decision making. Accordingly, to meet the ends of justice, we set aside the order of the CIT(A) and restore the entire disputed issues to the file of the Assessing officer to decide afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information and we allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28.02.2023.