LIVTAR SINGH BAJAJ & CO,LUDHIANA vs. DY. COMMISSIONER OF INCOME TAX, LUDHIANA

At the outset, the ld. AR fairly submitted that both the appeals filed by the assessee are barred by limitation and there is a delay

The ld. DR did not seriously object to the prayer made by the assessee for condonation of the delay. Considering the totality of facts and circumstances of the case, the contents of the affidavits filed by the assessee and in order to advance substantial justice, we condone the delay of 144 days in filing both the appeals and admit the same for adjudication on merits.

The ld. AR submitted that the authorities below have erred in estimating the income of the assessee by applying net profit rate of 8% on the total receipts. It was contended that the estimation made by the Assessing Officer is highly excessive and contrary to the past history of the assessee, wherein the net profit declared by the assessee in earlier years ranged between 1% to 2%. It was further submitted that due to unavoidable circumstances, the assessee could not effectively comply with the notices issued during the assessment as well as appellate proceedings, and, therefore, one more opportunity may be granted to substantiate the returned income by placing relevant books of account and supporting evidence on record.

We have heard the rival submissions and perused the material available on record, including the orders passed by the lower authorities. We find that the Assessing Officer completed the assessment ex parte under section 144 read with section 147 of the Act after observing that the assessee failed to substantiate the business expenditure and failed to produce supporting documentary evidence. Consequently, the Assessing Officer estimated the income by applying a net profit rate of 8% on the total receipts, including cash deposits.

We further notice from the appellate order that the ld. CIT(A) had granted several opportunities to the assessee during the

In our considered opinion, the action of the lower authorities, particularly in the backdrop of complete non-cooperation and failure of the assessee to furnish relevant evidence, cannot be faulted with per se. The assessee has admittedly failed to discharge the primary onus cast upon it to substantiate the income returned and the claim that the profit rate should be restricted to 1% to 2%. At the same time, considering the totality of circumstances and in order to provide substantial justice, we are of the considered view that one final opportunity deserves to be granted to the assessee to substantiate its case on merits by producing books of account and all supporting evidence before the appellate authority.

Accordingly, in the interest of justice, the impugned orders passed by the ld. CIT(A) as well as the Assessing Officer are set aside, and the matter is restored to the file of the ld. CIT(A) for fresh adjudication in accordance with law. The ld. CIT(A) shall provide adequate opportunity of hearing to the assessee and thereafter adjudicate the issues afresh on merits. The assessee is directed to fully cooperate in the appellate proceedings and furnish

However, before parting, we deem it appropriate to observe that the assessee has remained grossly negligent and non- compliant before both the authorities below as well as in filing the present appeals belatedly before the Tribunal. Considerable judicial time has been consumed by the assessee's casual approach. Therefore, while granting one more opportunity in the interest of justice, we deem it fit and proper to impose a cost upon the assessee.

Accordingly, the restoration of the matter to the file of the ld. CIT(A) shall be subject to payment of the cost of Rs. 20,000/- each for both the assessment years, to be deposited by the assessee in the “Poor Patient Welfare Fund” of PGIMER, Chandigarh, within a period of two weeks from the date of receipt of this order. The assessee shall furnish proof of such deposit before the Registry within the stipulated period.

In the result, both the appeals of the assessee are allowed for statistical purposes subject to the payment of cost as aforesaid.