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Facts
For Assessment Year 2010-11, the assessee did not file an Income Tax Return. The AO issued a notice under Section 148, estimated profit at 5% of turnover (Rs. 2,95,31,825/-) due to non-compliance, leading to an addition of Rs. 14,76,591/-. The CIT(A) passed an ex-parte order as the assessee failed to file submissions despite nine opportunities.
Held
The Tribunal observed that both the AO and CIT(A) lacked documentation for a correct income determination. Considering the need for an in-depth examination of facts, the case was remanded back to the AO for a fresh assessment, granting the assessee another opportunity to present its case.
Key Issues
Whether the ex-parte assessment and addition by the AO and CIT(A) were justified given the assessee's non-compliance, and if the assessee should be granted a fresh opportunity to present facts for a proper income determination.
Sections Cited
250, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
(Assessment Year 2010-11) New Bharat Paints, T P Sen Complex, Chamber of Commerce Lane, Benachity, Durgapur - 713213 [PAN: AAFFN6254Q] ..............…...…………….... Appellant vs. Commissioner of Income Tax (Appeals), NFAC, Income Tax Department, New Delhi ..….............................. Respondent Appearances by: Assessee represented by : Rajesh Kumar Mishra, AR Department represented by : Anindya Kumar Bandopadhyay, Addl. CIT Date of concluding the hearing : 18.02.2025 Date of pronouncing the order : 03.03.2025 O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order passed u/s 250 of the Income Tax Act, 1961 [hereafter ‘the Act] by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter “the Ld. CIT(A)], vide order dated 23.04.2024.
1.1 In this case, it is seen that the assessee had not filed its return of income for AY 2010-11. In light of this, the Ld. AO issued notice u/s 148 of the Act on 31.03.2017. During the course of assessment proceedings before the Ld. AO, information was received that the assessee’s turnover was Rs. 2,95,31,825/-. Apparently, there was no compliance to notices issued for verifying the turnover etc. and hence the Ld. AO estimated profit 1.2 The assessee carried this matter in appeal where admittedly there were nine opportunities given for filing submissions before the Ld. CIT(A). However, for some reason the same were not availed of. This fact resulted in an exparte order before the Ld. CIT(A).
Aggrieved with the action of Ld. CIT(A), the assessee has filed the present appeal with the following grounds:
“1. For that the order passed by the A.O. is arbitrary, excessive hence bad in law 2) For that on the facts of the case the A.O. was not justified in completing the assessment without giving any cognizance to the written explanation filed by the assessee in course of assessment proceedings 3) For that on the facts of the case the A.O. was not justified in determining undisclosed Income at Rs.14,76,591/- for the year under appeal, without considering the fact that there has been no existence of Partnership Firm and all credit Transaction of HDFC bank has properly booked in proprietary business and assessee has filed Income tax return in the status of proprietary business, undisclosed income shall not apply and the addition made by the A.O. may please be deleted. 4) For that the appellant craves leave to add, alter, amend any further grounds of appeal before or at the time of hearing.” 2.1 Before us, the Ld. AR averred that due to some issues regarding the tax consultant of the assessee, the notices issued by the Ld. CIT(A) could not be responded to. The Ld. AR requested for another opportunity to present the facts to settle the controversy regarding the status (for tax purposes) of the assessee and the issue pertaining to turnover; thereafter the exact income could be determined conclusively.
2.2 The Ld. DR relied on the orders of authorities below.
2.3 We have carefully considered the rival submissions and also gone through the records. It is seen that the Ld. AO and the Ld. CIT(A) were denied the benefit of any documents or submissions to enable them to arrive at a correct determination of the income of the assessee. It is felt that since the facts have to be examined in depth, this matter deserves to be New Bharat Paints remanded back to the file of the Ld. AO for afresh assessment. Needless to say, the assessee would do well to avail of opportunities provided to him for presenting his case.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the court on 03.03.2025