GORAKHPUR AUTO SERVICE,GORAKHPUR vs. DC/ACIT -1, GORAKHPUR

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ITA 224/VNS/2024Status: DisposedITAT Varanasi20 August 2026AY 2014-20158 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the significant delay in filing the appeal. It restored the matter to the NFAC to provide the assessee one final opportunity to present its case, emphasizing the need for substantial justice.

What were the facts?

The assessee, running a petrol pump, was selected for scrutiny for AY 2014-15. The AO made additions to income based on a lower gross profit rate, disallowing commission and lorry expenses, and adding an unsecured loan due to lack of documentation.

What were the issues?

Whether the assessee should be given another opportunity to present its case before the NFAC, considering the delay and previous non-compliance.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 234B,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CIRCUIT BENCH (SMC

Before: SHRI. SUDHANSHU SRIVASTAVA

IN THE INCOME TAX APPELLATE TRIBUNAL CIRCUIT BENCH (SMC), VARANASI BEFORE SHRI. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA No.224/VNS/2024 Assessment Year: 2014-15 M/s Gorakhpur Auto Service v. DC/ACIT-1 0, Golf Course Gorakhpur Gorakhpur (U.P) TAN/PAN:AACFG0604L (Applicant) (Respondent) Applicant by: None Respondent by: Shri Deepak Yadav, D.R. O R D E R This appeal has been preferred by the Assessee against the order dated 29.03.2022, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2014-15.

2.0 The brief facts of the case are that the assessee was engaged in running of Petrol Pump. The assessee filed its return of income for the year under consideration on 04.09.2014 declaring a total income of Rs.12,06,210/-. The case of the assessee was selected for scrutiny and, accordingly, the Assessing Officer (AO) issued statutory notices to the assessee, requiring the assessee to furnish comparative chart of sales, gross profit, gross profit rate, etc. for the last three years. The relevant chart filed by the assessee has been reproduced by the AO in his order, as under:

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Sl.No A.Y. Sales (Rs.) Gross profit Gross (Rs.) Profit Rate 1. 2012-13 22,01,99,910/- 41,73,781/- 1.90% 2. 2013-14 27,06,52,283/- 51,89,684/- 1.90% 3. 2014-15 41,90,21,284/- 78,23,558/- 1.87%

2.1 The assessee was also asked to produce the Stock Register, Sale Register, Purchase Register, Sale Bills and Purchase Bills to verify the gross profit rate. However, the assessee failed to produce the same before the AO. Subsequently, the AO asked the assessee to furnish the details of dealer’s commission given by the oil marketing Company (BPCL) on per litre sale of petrol and diesel. However, the assessee failed to furnish the same. The AO noticed that an another dealer of BPCL, Shri Akash Beriwala, Proprietor of M/s Krishna Fuel Centre, Nautanwa, Maharajganj, had stated to have received dealer’s commission on diesel at Rs.1.05 per litre and on petrol at Rs.1.76 per litre for assessment year 2014-15. Adopting the same rate of commissions as received by Shri Akash Beriwala, the AO worked out the gross profit of the assessee during the year under consideration as under:

Sl. Description Sale Dealer Total (Rs.) quantity in commission No. litres per litre

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(Rs.) 1. Diesel 5020817 1.05 52,71,858/- 2. Petrol 1731403 1.76 30,47,269/- 3. Speed MS 18691 1.76 32,896/- 4. Speed Diesel 233 1.76 245/- 5. Gross profit on sale of lubricant as shown 1,55,054/- by the assessee Total 85,07,322/-

2.2 The AO, after subtracting the gross profit of Rs.78,23,558/- declared by the assessee from the gross profit of Rs.85,07,322/- (worked out by the AO) added the difference of Rs.6,83,764/- to the income of the assessee as extra profit.

2.3 Further, the AO required the assessee to furnish the details of commission of Rs.4,84,585/- and discount of Rs.3,71,352/- debited in the profit and loss account. However, the assessee did not furnish any details relating to commission of Rs.4,84,585/-. The AO, therefore, disallowed the commission claimed by the assessee and added the same to the total income of the assessee.

2.4 Further, as per AO, the assessee had also failed to furnish any details pertaining to tanker/lorry uploading expenses of Rs.1,71,735/- debited in the profit and loss account and,

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therefore, the AO disallowed the same and added the same to the total income of the assessee.

2.5 The AO further noticed from the tax audit report that th assessee had taken unsecured loan of Rs.10,00,000/- from Agrawal Petroleum Parivahan. The assessee was asked to furnish the copy of account of depositor, copy of bank statement of depositor explaining the source of credit entries, copy of acknowledgement of return, computation of income, profit and loss account, balance sheet and tax audit report of depositor for assessment years 2012-13, 2013-14 and 2014-15. But the assessee failed to file the bank statement of Shri Vijay Kumar Agrawal HUF through which loan had been given to the assessee. The AO noted that in the absence of bank statement and explanation of source of deposit, the creditworthiness of depositor, M/s Vijay Kumar Agarwal, HUF had not been proved and, therefore, the amount of Rs.10,00,000/- was added to the total income of the assessee.

2.6 The AO completed the assessment under section 143(3) of the Act, assessing the total income of the assessee at Rs.35,46,290/-.

2.7 Aggrieved, the Assessee preferred an appeal before the Ld. First Appellate Authority. Subsequently, the appeal was migrated to NFAC, which partly allowed the appeal of the

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assessee by deleting the G.P addition and by sustaining all other additions made by the AO, by passing an order ex-parte qua the assessee.

2.8 Now the assessee has approached this Tribunal challenging the order of the NFAC, by raising the following grounds of appeal:

1.

That on facts and in circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate the facts of the case in the correct perspective. 2. That on the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the addition of Rs.4,84,585 by Assessing Officer on account of commission expenses. 3. That on the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the addition of Rs.1,71,735 by Assessing Officer on account of lorry expenses. 4. That on the facts and in circumstances of the case and in law, the Ld. C / T * (A) has erred in upholding the addition of Rs.10,00,000 by Assessing Officer on account of unsecured loan. 5. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the levy of interest under section 234B of the Act while passing the impugned order.

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6.

That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding of the initiation of penalty proceedings under section 271(1)(c) of the Act. 3.0 None was present on behalf of the assessee when the appeal was called out for hearing nor was any adjournment application moved in this regard. However, looking into the facts of the case, I proceed to adjudicate the appeal the appeal based on record before me.

4.0 During the course of hearing, it was brought to my notice that there was a delay of 937 days in filing the appeal and the assessee has filed an application dated Nil for condonation of delay, stating therein that the assessee was an uneducated person and was not aware of the faceless Income Tax proceedings and the Tax Consultant also did not inform the assessee about the current situation. It was further stated that after four years, in 2021 when the assessee received notices on the e-mail id of the assessee, that the assessee had come to know about passing of the order by the NFAC. In view of these facts, the appeal could not be filed before the Tribunal within the stipulated period. The prayer of the assessee was that the delay be condoned and the appeal be heard on merits.

5.0 The Ld. Sr. D.R. opposed the condonation of delay.

6.0 In view of the prayer made by the assessee, I condone the delay in filing of the appeal and admit the appeal for hearing.

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7.0 The Ld. Sr. D.R. submitted that due to non-compliant attitude of the assessee, the appeal of the assessee may be dismissed.

8.0 I have heard the Ld. Sr. D.R. and have also perused the material on record. It is evident that there was complete non- compliance on the part of the assessee during the course of first appellate proceedings. However, looking into the facts of this case, I am of the considered view that the assessee deserves one final opportunity to present its case and, therefore, in the interest of substantial justice, I restore this file to the Office of the NFAC with the direction to provide one more opportunity to the assessee to present its case. I also caution the assessee to fully comply with the directions of the NFAC in the set-aside proceedings when called upon to do so, failing which, the NFAC would be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.

9.0 In the result, the appeal of the assessee stands allowed for statistical purposes.

Order pronounced in the open Court on 20/08/2026.

Sd/- [SUDHANSHU SRIVASTAVA] JUDICIAL MEMBER DATED:20/08/2026 JJ:

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