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Facts
The assessee, a firm, failed to file its return of income for AY 2017-18 despite depositing significant cash during demonetization. Notices were issued, and the case was taken up for scrutiny. The Assessing Officer estimated income based on total bank credits and treated some deposits as income under Section 69A.
Held
The Tribunal set aside the order of the CIT(Appeals) to provide the assessee with an opportunity to be heard, adhering to the principle of natural justice. The matter was remitted back to the Assessing Officer.
Key Issues
Whether the assessee was provided adequate opportunity to present evidence and submissions, and whether principles of natural justice were followed in the ex-parte order passed by the CIT(Appeals).
Sections Cited
139(1), 142(1), 144(1), 274, 272A(1)(d), 133(6), 69A
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2017-2018 Boogie Woogie Computer Center,…..…...……Appellant Boogie Woogie Main Road, Mihijam, P.O. Mihijam, Jharkhand, PIN Code 815354 [PAN:AAPFB0339J] -Vs.- Income Tax Officer,……………………………....Respondent Ward-1(2), Asansol, Income Tax Office, Parmar Building, 54, G.T. Road, Asansol-713305, West Bengal Appearances by: Shri Ananda Sen, Advocate and Shri Sabyasachi Mondal, Advocate, appeared on behalf of the assessee N o n e, appeared on behalf of the Revenue Date of concluding the hearing: January 20, 2025 Date of pronouncing the order: March 18, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 18th February, 2024 passed for Assessment Year 2017-18.
(A.Y. 2017-2018) Boogie Woogie Computer Centre 2. Brief facts of the case are that the assessee is a firm, which did not furnish the return of income for the assessment year 2017- 18. As per AIMS Data in ITBA, the assessee had deposited cash of Rs.22,61,330/- during demonetization period, i.e. from 9th November, 2016 to 30th December, 2016 in the account no. 35214422932 of State Bank of India, Mihijam and Rs.7,50,200/- in account no. 47662011000009 of Bank of India, Mihijam. As the assessee had not filed the return of income voluntarily as required under section 139(1) of the Act, notice under section 142(1) was issued on 23.11.2017 calling for return of income on or before 23.12.2017, but the assessee did not file the return of income inspite of service of notices. The case of the assessee was taken up for scrutiny under section 144(1)(b) of the Act and accordingly notice under section 142(1) alongwith the questionnaire was issued and served on the assessee on 12.07.2019 for furnishing the replies. No compliance was given by the assessee and thereafter penalty notice under section 274 read with section 272A(1)(d) was issued to the assessee. The assessee responded online merely stating that all cash deposited into Bank accounts were out of retail business of mobile handsets, accessories and recharge vouchers and purchases were made from M/s. Shree Mahalakshmi Enterprise, M/s/. Bharti Airtel Ltd. Accordingly notices under section 133(6) were issued to the abovementioned companies, from where the assessee purchased the accessories and it was informed by M/s. Bharti Airtel Limited and Shree Mahalakshmi Enterprise that the assessee was allowed discount of Rs.9,11,857/- and Rs.43,846/- respectively during the financial year 2016-17. It was revealed that there was total credit of (A.Y. 2017-2018) Boogie Woogie Computer Centre Rs.2,77,20,894/- in SBI Bank Account out of which cash deposited amount was Rs.2,44,68,090/-. Similarly, there was total credit of Rs.45,49,118/- in Bank of India Account, out of which cash deposit amount was Rs.42,85,870/-. Therefore, there was total credit of Rs.3,22,70,012/- in both the accounts of the assessee, out of which cash deposit was Rs.2,87,53,960/-. The ld. Assessing Officer estimated the income of assessee at Rs.25,81,600/- by considering net profit @ 8% of total credits of Rs.3,22,70,012/- in the bank accounts. The ld. Assessing Officer also treated Rs.6,70,000/- deposited during demonetization period as income of the assessee under section 69A of the Act. Finally, income of the assessee was determined by the ld. Assessing Officer under section 144(1) of the Act at the income of Rs.32,51,600/-.
On being aggrieved, the assesese preferred an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) has given several opportunities to the assessee to substantiate its claim, but the appellant did not file the written submissions. Therefore, ld. CIT(Appeals) estimated the net profit @ 5% of sales amounting to Rs.3,22,80,334/- instead of 8% as made by the ld. Assessing Officer and partly allowed the ground of appeal. In absence of documentary evidences with respect of cash in hand with the assessee as on 08.11.2016, in order to meet the ends of justice, ld. CIT(Appels) taking the average of per day sale of assessee treated the amount of Rs.4,20,000/- instead of Rs.6,70,000/- as assessed by the ld. Assessing Officer, as income u/s.69A of the Act.
5. On being aggrieved, the assessee preferred an appeal before the ITAT.
6. None appeared on behalf of the Revenue. At the time of hearing, ld. Counsel for the assessee brought to my notice that the assessee produced all the documentary evidences as asked by the ld. Assessing Officer during the assessment proceedings. The ld. Assessing Officer passed the assessment order assessing the taxable income at Rs. 32,51,600/-. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) partly allowed the appeal of the assessee by passing ex-parte order. Therefore, the ld. Counsel for the assessee pleaded to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. Assessing Officer with a direction to provide one more opportunity of being heard to the assessee.
7. I have heard the ld. Counsel for the assessee and perused the material available on record. Considering the facts and circumstances of the case, I am inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. Assessing Officer with a direction to provide one more opportunity of being heard to the assessee. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. Assessing Officer failing which the Ld. Assessing Officer shall be at liberty to pass appropriate order in accordance (A.Y. 2017-2018) Boogie Woogie Computer Centre with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.