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Facts
The assessee filed an appeal against an ex parte order of the Ld. CIT(A) which was passed against an assessment order under Section 144. The assessee had failed to comply with statutory notices or provide documentation during the original scrutiny assessment. The appeal to the Tribunal was filed with a delay of 235 days, which was condoned.
Held
The Tribunal observed that there was no proper compliance by the assessee before either the Ld. AO or the Ld. CIT(A). To ensure justice and provide a reasonable opportunity of being heard, the Tribunal set aside both the CIT(A)'s order and the AO's assessment order, remitting the case back to the AO for a de novo reassessment.
Key Issues
Whether the ex-parte assessment and appellate orders should be set aside and the matter remanded for a fresh assessment due to lack of opportunity for the assessee to present their case, and the validity of various additions/estimations made by the AO.
Sections Cited
250, 144, 143(2), 142(1), 44AB, 68, 80C, 80TTA, Chapter VIA
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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Ld. Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2014-15 dated 04.05.2023, which has been passed against the assessment order u/s 144 of the Act, dated 28.12.2016. I.T.A. No.: 358/KOL/2024 Assessment Year: 2014-15 Ashok Chaurasia.
The Registry has informed that the appeal filed by the assessee is barred by limitation of time by 235 days. An application seeking condonation of delay has been filed by the assessee stating as follows for condoning the delay: “With respectfully, I, Ashok Chaurasia being the assessee PAN- AGLPC4543R Trade Name- M/S BHARAT PAN BHANDER located at Parbatipur, Tamluk, Purba Medinipur, Pin-721636 like to inform you that I was physically and mentally ill. So I cannot attend in time the proceeding in CIT(A) as well as Assessing Officer. I have also attached medical report with this letter for your perusal and deep sympathy. Therefore, I would request you to grant the condonation of delay in filing appeal and obliged me.”
Considering the application for condonation of delay and the reasons stated therein, we are satisfied that the assessee had reasonable and sufficient cause and was prevented from filing the instant appeal within the statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication on merits.
The assessee is in appeal before the Bench raising the following grounds of appeal:
“1. That the Assessing Officer has taken income on excess deposit as income i.e. (2,22,81,659-1,83,02,190)-Rs.39,52,944 during the Previous year where the assessee run the business where net profit is 2.92% as shown in the books of account and the audited Profit & Loss account. Therefore income should be on Rs.39,52,944 @2.92%- Rs.1,15,426. 2. That the Assessing Officer has taken income on 1,83,02,190 @ 8% i.t 14,09,790 but the assessee has filed the return during the previous year and made the tax audit u/s 44AB showing net profit as 2.92% of the total business income.
That the Assessing Officer has taken income as Rs.49,743 as 1.25% of 39,79,469 which is notional income in which the Assessing Officer has not taken conservative view and the notional should not be accounted for in the books of account. I.T.A. No.: 358/KOL/2024 Assessment Year: 2014-15 Ashok Chaurasia.
That the Assessing Officer has added (25,000*12-1,81,450)=1,18,550 as low drawing based on "Consideration present scenario and present status" is not valid in law.
That the Assessing Officer has erred in law as well as in fact in estimating the net profit @ 8 percent without any basis.
That the Assessing Officer has erred in law as well as in fact in estimating the net profit @ 8 percent without any basis and the addition is not tenable at law and liable to be deleted 144. 7. That the Assessing Officer has erred in law as well as in facts by considering the income from business as Rs. 39,52,944 where no mention of such income is discussed in the body of the order.
That the Assessing Officer has erred in law as well as in facts by considering the income from business as Rs.39,52,944 where no mention of such income is discussed in the body of the order and the addition is not tenable at law and liable to be deleted.144. 9. That the Assessing Officer has erred in law as well as in facts by adding the income of Rs. 49,743 as income not disclosed in the return of income on presumptive basis
That the Assessing Officer has erred in law as well as in facts by adding the income of Rs.49,743 as income not disclosed in the return of income on presumptive basis and the addition is not tenable at law and liable to be deleted.
That the Assessing Officer has erred in law as well as in facts by adding the sum of Rs.2,50,000 under section 68 of the Income Tax Act 1961. For that the Assessing Officer has erred in law as well as in facts by adding the sum of Rs. 2,50,000 under section 68 of the Income Tax Act, 1961 and the addition is not tenable at law and liable to be deleted.
That the Assessing Officer has erred in law as well as in facts by making an addition to the income-from business amounting to Rs. 14,09,790 where no mention of such income is discussed in the body of the order and the addition is not tenable at law and liable to be deleted 144. 13. the Assessing Officer has erred in law as well as in fact in making an estimated addition for low drawings amounting to Rs. 1,18,550 without any basis. For that the Assessing Officer has erred in law as well as in fact in making an estimated addition for low drawings amounting to Rs. 1,18,550
Without any basis and the addition is not tenable at law and liable to be deleted. I.T.A. No.: 358/KOL/2024 Assessment Year: 2014-15 Ashok Chaurasia. 15. 80C, 80TTA That the Assessing Officer has erred in law as well as in fact in denying the deduction under Chapter VIA of the Income Tax Act 1961. For that the Assessing Officer has erred in law as well as in fact in denying the deduction under Chapter VIA of the Income Tax Act 1961 and the same is liable to be allowed.
That the impugned order dated 28th December 2016 passed by the Learned Assessing Officer is not proper and not in accordance to law and liable to be set aside and quashed. For that the impugned order dated 28th December 2016 passed by the Learned Assessing Officer is not proper and not in accordance to law and liable to be set aside and quashed.
That the Learned Assessing Officer passed the impugned order dated 28th December 2016 arbitrarily, mechanically and without applying judicial mind.”
Brief facts of the case are that the assessee is an individual and had e-filed his return of income on 29.11.2014 declaring total income of Rs. 4,35,210/- with gross total turnover of Rs. 1,83,02,190/-. The case was selected for scrutiny and statutory notices u/s 143(2) and 142(1) of the Act were issued and duly served upon the assessee but the assessee failed to comply with the notices and did not file any documentary evidence to substantiate the correctness and completeness of the return for the relevant assessment year. The Ld. AO made certain disallowances and passed the order u/s 144 of the Act assessing the total income of the assessee at Rs. 55,47,210/-.
1 Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal of the assessee ex parte after relying upon several judicial pronouncements as sufficient opportunities were provided to the assessee but no representation was made before the Ld. CIT(A). Aggrieved with the order of the Ld. CIT(A) the assessee has filed the appeal before this Tribunal.
Rival submissions were heard and the submissions made have been examined. The assessee contends that the order of the Ld. CIT(A) I.T.A. No.: 358/KOL/2024 Assessment Year: 2014-15 Ashok Chaurasia. is ex parte and the appeal took about 4 years to conclude. Proper representation could not be made before the Ld. CIT(A). It was requested to remit the matter to the Ld. AO as proper representation could not be made either before the Ld. AO or even before the Ld. CIT(A). The Ld. DR did not seriously oppose the request of the Ld. AR. Since there was no proper compliance before both the Ld. AO as well as the Ld. CIT(A), in the interest of justice and fair play it was considered by the Bench that the request of the assessee to set aside the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) as well as the order of the Ld. AO and remit the matter back to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in his appeal are allowed for statistical purposes. Order pronounced in the open Court on 4th April, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 04.04.2025 Bidhan (P.S.) I.T.A. No.: 358/KOL/2024 Assessment Year: 2014-15 Ashok Chaurasia. Copy of the order forwarded to:
Ashok Chaurasia, Parbatipur, Ward No-13, Tamluk, Purba Medinipur, West Bengal, 721636. 2. ITO, Haldia.
CIT(A)-NFAC, Delhi
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order