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Facts
The assessee, an individual running a business of mobile recharge vouchers and sim cards, was a non-filer. The Assessing Officer (AO) reopened the case based on information and estimated 50% of the gross commission as income. The assessee failed to respond to notices, leading to an ex-parte assessment order.
Held
The Tribunal condoned the delay in filing the appeals due to the assessee's injury. It was noted that the AO made an unreasonable estimate of income at 50% without the assessee's participation. The Tribunal decided to remit the file back to the AO for a de novo assessment to provide the assessee an opportunity to present their case.
Key Issues
Whether the ex-parte assessment order, estimating 50% of gross commission as income, is justified without the assessee's participation and consideration of prior assessment year income percentages.
Sections Cited
147, 144, 144B
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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K, HON’BLE & SHRI S.R. RAGHUNATHA, HON’BLE
PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
These four appeals filed by the assessee are directed against the common order passed by the learned Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), dated 03.07.2024 and pertains to assessment years 2014-15, 2015-16, 2016-17 & 2017-18. These appeals are heard together and for the sake of convenience we are adjudicating all these appeals together by passing a common order as below. Page 1 of 5 : 3080, 3801, 3101 & 3103 3112/Chny/2024
The only ground raised by the assessee is that the Ld. CIT(A) has erred in confirming the ex-parte order of the AO in estimating the addition of 50% as income of the gross commission received for all the four AYs i.e. 2014-15 to 2017-18.
At the outset, we find that there is a delay of 65 days in all the four appeals filed by the assessee, for which petition for condonation of delay along with reasons for delay has been filed for the all the AYs i.e. 2014-15 to 2017-18 separately. After considering the petitions filed by the assessee and also hearing both the parties, we find that the assessee was suffering from injury in right ankle and could not move and hence there is a reasonable cause for the assessee in not filing appeal on or before the due date prescribed under the law and thus, in the interests of justice, we condone delay in filing of these appeals and admit appeals filed by the assessee for adjudication.
The brief facts of the case are that the assessee is an individual and a non filer and carrying on the business of distribution and sale of mobile recharge vouchers and sim cards under the trade name M/s.Anna Cell Com. The assessee was in receipt of commission income and based on the information the case was reopened for : 3080, 3801, 3101 & 3103 3112/Chny/2024 assessment and issued statutory notices. However, assessee neither filed his return of income nor responded to the notices of the AO. Accordingly, the AO completed the assessment u/s.147 r.w.s.144 r.w.s.144B of the Act by estimating the income @ 50% of the gross commission received from M/s.Aircel Limited as detailed below:- Asst. Date of Order Commission 50% Year u/s.144 Estimated 2014-15 30.03.2022 Rs.45,95,432/- Rs.22,97,716/- 2015-16 30.03.2022 Rs.41,48,968/- Rs.20,74,484/- 2016-17 30.03.2022 Rs.49,23,428/- Rs.24,61,714/- 2017-18 30.03.2022 Rs.39,75,462/- Rs.19,87,731/- Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A), NFAC, Delhi.
After considering submission made by the assessee the ld. CIT(A) passed a common order dated 03.07.2024 and dismissed the appeal of the assessee by confirming the additions made by the AO. Aggrieved by the order of the ld. CIT(A), the assessee is before us for all the four assessment years.
The ld.AR submitted that the Ld. CIT(A) has erred in confirming the order of the AO without considering any of the submissions made by the assessee. Further, the Ld. AR stated that the AO has passed an order without participation of the assessee in the assessment : 3080, 3801, 3101 & 3103 3112/Chny/2024 proceedings by estimating unreasonable percentage of income at 50% of the gross commission received M/s.Aircel Limited. During the appellate proceedings, the assessee had furnished earlier four assessment years i.e 2010-11 to 2013-14 return of income wherein the net income earned from the commission received was from 8% to 16.4%. However, the Ld.CIT(A) without considering assessee’s claim confirmed the order of AO. In light of the above arguments, the Ld.AR prayed for one more opportunity before the AO to furnish all the required details and documents in support of the assessment for all the four AYs.
Per contra, the Ld. DR relied on the orders of lower authorities.
We have heard rival submissions in the light of material available on records and perused the orders of lower authorities. It is an admitted fact that the assessee had not participated in the assessment proceedings before the AO and hence the AO has passed an ex-parte orders which were confirmed by the Ld.CIT(A) for the four AYs. On perusal of records, it is noted that the AO has made unreasonable estimate of income at 50% of gross commission received by the assessee. Therefore, to meet the ends of justice, we are inclined to remit the file back to the AO for de novo assessment to give one more opportunity to the assessee before the AO to present his case. Needless to say that the assessee to cooperate and submit : 3080, 3801, 3101 & 3103 3112/Chny/2024 the required details and documents for all the four AYs as and when called for without taking unnecessary adjournments.
In the result, all the four appeals filed by the assessee for A.Ys. 2014-15, 2015-16, 2016-17 and 2017-18 are allowed for statistical purposes.