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Income Tax Appellate Tribunal, DELHI BENCH : SMC-1 : NEW DELHI
Before: SHRI R.K. PANDA
BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER Assessment Year: 2014-15 Deepak Manchanda, Vs. ITO, B-4/230, Sector-7, Ward 41(4), Rohini, New Delhi. Delhi,. PAN: ALLPM0444N (Appellant) (Respondent) Assessee by : Shri Sanjay Issar, CA Revenue by : Shri Om Prakash, Sr.DR Date of Hearing : 08.11.2021 Date of Pronouncement : 08.11.2021 ORDER
This appeal filed by the assessee is directed against the order dated 26th April, 2019 of the CIT(A)-34, New Delhi, relating to Assessment Year 2014-15.
The grounds raised
by the assessee are as under:- “1. On the facts and in the circumstances of the case and in law the Hon’ble Commissioner of Income-tax (Appeals)’ erred in rejecting trading results and adding 3614956/- on mere non production of accounts to the Ld. AO during remand proceedings. When he never issued any notice in this regard and books of accounts were duly produced before Hon’ble CIT(A)-34 New Delhi.
2. On the facts and in the circumstances of the case and in law the Hon’ble Commissioner of Income-tax (Appeals)’ erred in rejecting the addition of Rs. 115098/- on account of non production of books and vouchers relating to expenses claimed by the assessee. This addition is again on non production of accounts to the Ld. AO when he never issued any notice in this regard and books of accounts were duly produced before Hon’ble CIT(A)-34 New Delhi.
3. On the factsand in the circumstances of the case and in law the Hon’ble Commissioner of Income-tax (Appeals) erred in rejecting that deduction of Rs. 48000/- on non production of tution fee bills before the Ld. AO during remand proceedings. When he never issued any notice in this regard and tuition fee bills were duly produced before Hon’ble CIT(A)-34 New Delhi.
On the facts and in the circumstances of the case and in law the Hon’ble Commissioner of Income-tax (Appeals)’ erred in rejecting the Appeal of theassessee when The Ld. AO after realising that assessee has maintained books of accounts he was asked to relook into the remand report the said instructions of Hon’ble CIT(A)-34 New Delhi was negated by him.
5. The Appellant prays that the addition/ disallowance of Rs. 3,778,054/- made in respect of issued mentioned in ground 1 to 3 be deleted.
The Appellant craves leave to add, amend, alter vary and / or withdraw any or all the above grounds of Appeal.”
Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 27.11.2014 declaring the total income of the assessee at Rs.4,58,790/-. The case was selected for scrutiny under CASS and statutory notices u/s 143(2) was issued and duly served upon the assessee through speed post. However, no compliance was made on the scheduled date of hearing. Thereafter, notice u/s 142(1) was issued which also remained uncomplied with. Subsequently, another notice u/s 143(2) along with notice u/s 142(1) through speed post was issued and served on the assessee. Again, there was no compliance from the side of the assessee. The AO, therefore, proceeded to 2
144 of the Act and determined the total income of the assessee at Rs.42,36,843/- by making addition of Rs.36,14,956/- on account of unverified trading result and Rs.1,15,098/- on account of unverified expenses.
4. In appeal, the ld.CIT(A) dismissed the appeal filed by the assessee and sustained the additions made by the AO. So far as the addition of rs.36,14,956/- made by the AO is concerned, the ld.CIT(A) sustained the same by observing as under:- “5.4 I have considered the facts of the case, finding of the AO and submissions of the appellant. The case of the appellant was completed u/s 144 of the Act by the AO as appellant has not made any compliance before the AO. During the course of appellate proceedings, appellant has filed additional evidences which were admitted and remand report is called for from the AO. In the case of the appellant, trading addition was made by the AO after rejecting trading results shown by the appellant as appellant has not produced books of accounts, bills and vouchers in support of purchase, sales and expenses. The AO has applied the profit @ 2% of the turnover shown by the appellant and made addition of the difference of Rs.36,14,956/-. It is observed that appellant has stated in the application filed for admitting additional evidences that he is enclosing sample bills for purchase and sales, but they are not enclosed with the application of the appellant. The same were not produced before the AO during the remand proceedings also and in appellate proceedings, counsel of the appellant has admitted that copy of sale and purchase bills were not enclosed with the application filed for admitting additional evidences. Appellant has only filed the purchase and sales ledger account and not furnished purchase / sale bills & justification of expenses, AO is justified in rejecting trading results shown by the appellant and applying net profit rate @ 2% on the total turnover. Hence addition made by the AO at Rs.36,41,956/- is sustainable and it is hereby confirmed.”
4.1 So far as the addition of Rs.1,15,098/- is concerned, the ld.CIT(A) also upheld the addition made by the AO by observing as under:-
“6.3 I have considered the facts of the case, finding of the AO and submission of the appellant. The appellant has not furnished any bills and vouchers in support of expense and failed to justify the expenses incurred wholly and exclusively for the business purposes. The appellant has not filed any detail of expenses during the appellate proceedings also. Considering the above facts, addition made by the AO at Rs.1,15,098/- is hereby confirmed.”
Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal.
6. The ld. Counsel for the assessee submitted that due non-receipt of notice from the AO, there was no compliance before him. He submitted that all details were produced before the CIT(A) and the ld.CIT(A) called for a remand report from the AO. However, no notice was also received from the AO during the remand proceedings. Although the ld.CIT(A) again wrote to the AO to submit the remand report, there was no compliance to the same by the AO. He submitted that the details furnished by the assessee before the CIT(A) were also not considered by him properly. He accordingly submitted that in the interest of justice the matter should be restored to the file of the AO with a direction to adjudicate the issue afresh after giving due opportunity of being heard to the assessee.
The ld. DR, on the other hand, supported the order of the CIT(A).
I have considered the rival arguments made by both the sides and perused the record. It is an admitted fact that due to non-appearance of the assessee despite number of notices issued, the AO completed the assessment u/s 144 of the 4
Act by determining the total income of the assessee at Rs.42,36,843/- as against the returned income of Rs.5,06,789/-. I find, the ld.CIT(A) upheld the addition made by the AO, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the ld. Counsel that due to non- receipt of notice from the AO, there was no compliance before him. Further, despite all the evidences including the additional evidences filed before the CIT(A), the same were not considered properly by him. It is also his submission that neither the AO has issued notice to the assessee during assessment proceedings nor submitted any remand report to the CIT(A) despite two opportunities granted. Considering the totality of the facts of the case and in the interest of justice, I deem it proper to restore the issue to the file of the AO with a direction to grant one final opportunity to the assessee to substantiate his case and decide the issue as per fact and law. The assessee is also directed to appear before the AO and substantiate his case without seeking any adjournment under any pretext failing which, the ld.CIT(A) is at liberty to pass appropriate order as per law. I hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.