CLASSIC NETWORK PRIVATE LIMITED AND BACKBONE ENTERPRISE LIMITED JV,RAJKOT vs. THE INCOME TAX OFFICER, WARD - 2(1)(1) RAJKOT, RAJKOT

Brief facts of the case are that the assessee is an Association of Persons (AOP), being a joint venture constituted by partnership firms. The assessee filed its return of income for the assessment year under consideration declaring Nil income. The case was selected for scrutiny to examine issues relating to investments, advances/loans, contract receipts and the claim of expenditure. During the course of assessment proceedings, the Assessing Officer issued various statutory notices calling upon the assessee to furnish details, reconciliations and supporting evidence in respect of the aforesaid issues. However, the assessee failed to furnish complete details and did not effectively comply with the notices issued. Consequently, the Assessing Officer completed the assessment under section 144 of the Income-tax Act, 1961, by estimating the income at 8% of the gross receipts reported in the audit report, vide order dated 26.04.2021.

Aggrieved by the assessment order, the assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals). The learned CIT(A), however, dismissed the appeal and confirmed the assessment order.

Being aggrieved, the assessee is in appeal before the Tribunal. At the outset, the Ld.AR submitted that there was a delay 17 days in filing the present appeal. Having considered the reasons stated in the application for condonation of delay and being satisfied that sufficient cause prevented the assessee from filing the appeal within the prescribed period, the delay is condoned and the appeal is admitted for adjudication.

On merits, the learned Ld.AR submitted that although the assessee had partly complied with the notices issued by the lower authorities, it could not

The Ld. DR supported the orders of the authorities below. He further submitted that, for the same assessment year, proceedings under section 272A(1)(d) of the Act had also been initiated and an order under section 154 of the Act had been passed. Thus, three appeals arising out of the same assessment year are pending. However, he fairly submitted that he has no serious objection if the quantum appeal is restored to the file of the Assessing Officer for fresh adjudication.

We have heard the rival submissions and perused the material available on record. We find that the assessment in the present case was completed ex parte under section 144 of the Act. It is also evident that the assessee did not effectively pursue the matter before the Assessing Officer and only partially complied with the proceedings before the learned CIT(A). Consequently, the issues involved have not been properly examined on merits. Considering the facts and circumstances of the case and in the interest of substantial justice, we deem it appropriate to restore the matter to the file of the Assessing Officer for fresh adjudication. The Assessing Officer shall examine the issues afresh after affording the assessee a reasonable opportunity of being heard and after considering such documentary evidence as may be produced by the assessee in support of its contentions. The assessee is directed to fully cooperate with the assessment proceedings and to comply with all notices issued by the Assessing Officer without seeking unnecessary adjournments.

Accordingly, the appeal of the assessee is allowed for statistical purposes.