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Income Tax Appellate Tribunal, KOLKATA-PATNA ‘e-COURT’, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Dr. Manish Borad
Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income
Assessment Year: 2017-2018 Rabindra Kumar Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 18th July, 2022 passed for A.Y. 2017-18.
The assessee has taken seven grounds of appeal. In brief, his grievance is that ld. CIT(Appeals) has erred in upholding the order passed by the ld. Assessing Officer under section 143(1) of the Income Tax Act in an ex-parte order, which has given rise an addition of Rs.15,05,78,356/- to the income of the assessee without any basis.
3. The assessee has filed statement of fact before the Tribunal and we deem it appropriate to take note of this statement, which reads as under:-
1. 1. The assessee is carrying out the business of civil contract in the name of M/S Ravinder Kumar, partnership firm. The contract in question were taken and executed by the partnership firm but PAN of the partner namely Ravinder Kumar was used. The whole of the TDS was deducted by the employer against the contract were shown at the PAN of the partner namely Ravinder Kumar. The total contract receipt were 15,05,78,356/- and the total TDS against the said receipt was Rs.29,72,792/-.
2. It is stated that the contract work was executed by partnership firm, therefore, contract receipt were shown in the return of the partnership firm. The partnership firm had filed return with respect to the contract business. The individual partner had not shown income on account of contract business in his individual return. In individual business only income on account of remuneration and interest received were shown. Both the partnership firm and individual partner has filed return of income separately.
The TDS were deducted on individual PAN, therefore, the assessee had filed statement of deduction of tax on individual pan. The return of the appellant was processed by CPC and 2 Assessment Year: 2017-2018 Rabindra Kumar order under section 143 (1) (a) Was passed. In the intimation, the whole of the contract receipt were taken as income under other source and accordingly levied tax of Rs.7,17,83,917/- against the admitted liability of Rs. 1,22,671/-. The intimation accordingly served.
4. The computation of tax under section 143 (1) (a) is bad because the income from other source of Rs.15,05,78,586/- shown in the intimation is business receipt not income. The contract receipt has already taken in the return of the firm.
That, the appellant filed appeal before the Id. CIT The Id. CIT had notice for filing written submissions. In the meantime appellant got sick and had not made communication with his advocate. The appellant had filed application for adjournment of hearing on medical ground. The Id. CIT appeal has not provided further opportunity and had dismissed the appeal.
With the assistance of ld. Representatives, we have gone through the record carefully. A perusal of the record would reveal that the assessee had filed his return of income on 30.03.2018 for A.Y. 2017-18. He has declared total income of Rs.8,62,940/-. The CPC, Bangalore has processed the return of the assessee under section 143(1). In other words, the return of the assessee was processed by a computer and whereby it made an adjustment of Rs.15,05,78,356/- under the head “income from other sources”. This intimation was uploaded on Income Tax e- Portal on 12.07.2018. The assessee was required to respond to this intimation. When he failed to respond the order, 143(1) was passed on 30.03.2019.
5. Dissatisfied with this adjustment, assessee filed the appeal before the ld. CIT(Appeals). This appeal was time 3
Assessment Year: 2017-2018 Rabindra Kumar barred by 208 days and the assessee has filed an application for condonation of delay. The ld. CIT(Appeals) condoned the delay. The ld. CIT(Appeals) has dismissed the appeal ex-parte by way of the impugned order. The ld. CIT(Appeals) has dismissed it for want of prosecution. The ld. 1st Appellate Authority noticed the factum of the appeal being time barred condoned the delay. The ld. CIT(Appeals) thereafter proceeded to consider the issue on merit and again without comprehending any issue on merit dismissed the appeal by observing that the assessee has not responded to the notices. The ld. CIT(Appeals) has unnecessarily incorporated the juris prudence exhibiting the fact if a litigant did not appear or file submission, then, as to how litigation is to be decided.
Sub-section 6 of Section 250 contemplates that ld. CIT(Appeals) would formulate the points in dispute and thereafter record reasons on those points. In the present case, ld. CIT(Appeals) failed to adhere this mandatory procedure and unnecessarily took cognizance of various propositions laid down in different judgments just for the purpose as to how this appeal could be dismissed for want of prosecution. The assessee has filed the statement of facts contending therein that he was carrying out the business of a Civil contractor in the name of M/s. Rabinder Kumar, Partnership firm. The firm has disclosed all these contract receipts of Rs.15.05 crores in its return
Assessment Year: 2017-2018 Rabindra Kumar and paid taxes. The error given rise to this addition to the income of the assessee because the PAN of the assessee was given in the contracts and these contract receipts were appearing against the name of the assessee. In such situation, ld. CIT(Appeals) ought to have called for a report from the ld. Assessing Officer and also details of the firm. But no such steps have been taken. The assessee has been put under the tax burden of Rs.7,16,61,320/- just by processing the return with the help of a computer and without pondering over all other peripheral aspects. The return might have been processed by the computer but the ld. 1st Appellate Authority ought to have looked into all the aspects that really the assessee has such type of income. Therefore, we are of the view that this impugned order of the ld. CIT(Appeals) is not sustainable.
Since a huge addition of Rs.15.05 crores has been made to the income of the assessee on account of certain data by the CPC, Bangalore, therefore, both the orders deserve to be set aside. We remit this issue back to the file of ld. Assessing Officer for re-adjudication. The ld. Assessing Officer is directed to verify whether these contractual receipts are being accounted for by the partnership firm of the assessee or not. The ld. Assessing Officer should determine the real income in the hands of the assessee.
Assessment Year: 2017-2018 Rabindra Kumar 8. In view of the above, the appeal of the assessee is allowed for statistical purposes.