Loading judgment…
Facts
The assessee, engaged in trading building material, filed an appeal with a 5-day delay. The delay was attributed to bad health and elections. The ITAT condoned the delay. The case involves an addition of Rs. 25,97,322/- made by the AO based on a discrepancy in turnover figures.
Held
The Tribunal held that the correct turnover figure was available to the AO, and the assessee's adoption of a wrong figure was an error. The Tribunal remanded the matter to the AO for recalculating the taxable income under Section 44AD of the Act using the correct turnover figure.
Key Issues
Whether the AO was justified in adding the differential turnover as an undisclosed amount when the correct figure was available, and if the appeal could be decided on merit despite the assessee not providing written submissions before the CIT(A).
Sections Cited
250, 147, 148, 44AD
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
(Assessment Year 2017-18) Mintu Mallick, 0, Mirik Para Gals, Purba Bardhaman - 713406 [PAN: BPPPM6256K] ..............…...…………….... Appellant vs. Income Tax Officer, Ward-2(1), Bardhaman, Aayakar Bhawan, Court Compound, Kachari Road, Bardhaman - 713101 ..….................... Respondent Appearances by: Assessee represented by : S.K. Tulsian, Advocate Department represented by : Anindya Kumar Bandopadhyay, Addl. CIT Date of concluding the hearing : 18.02.2025 Date of pronouncing the order : 25.02.2025 O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
The ITAT Registry has pointed out that there is a delay of 5 days in filing of this appeal. The assessee has filed an application for condoning the same as under:
“In this case, order under section 250 of the Act by CIT(Appeal) of National Faceless Appeal Centre was Passed and deemed to be received on the same date i.e. 30.03.2024(as per Information Technology Act, 2000 being transmitted through e- proceedings tab and electronic mail only). Therefore, the deemed due date of filing before this Hon'ble Tribunal expired on 30.05.2024. However, the appeal is filed on 03.06.2024 Causing a delay of 5 days. In this connection, it is humbly submitted that the Appellant has undergone bad health condition which also causing mental trauma during the delay period. Moreover, transport hazard due to ongoing Loksabha election also hinders the filing process. In view of the above pressing situation, the delay in filing the appeal within the prescribed time is unintentional and for bona fide and reasonable cause and Mintu Mallick hence the delay is for good and sufficient reasons and deserves conditions to meet the ends of justice. It is, therefore, humbly prayed to admit the appeal and dispose of the same on merits of the case. An affidavit in this connection is also filed along with this petition.” 1.1 Considering the reasons mentioned in the said application and the shortness of delay, the delay is hereby condoned and the appeal is admitted for adjudication.
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 30.03.2024.
2.1 In this case, the assessee is an individual, engaged in the trading of building material. The department was in possession of information that the assessee had deposited amounts of Rs. 14,29,000/-, Rs. 10,11,500/-, Rs. 17,500/-, Rs. 2,00,000/- and another Rs. 2,00,000/- in his bank account during the demonetisation period. The Ld. AO initiated proceedings u/s 147 of the Act in response to notice u/s 148 of the Act. The assessee filed return of income on 28.02.2020 declaring total income of Rs. 3,66,590/-. Admittedly, the assessee offered income u/s 44AD of the Act on a total turn over of Rs. 53,89,300/-. However, the Ld. AO noticed that in the Profit & Loss Account, the turnover was mentioned at Rs. 79,86,622/-. Thereafter, the Ld. AO proceeded to add an amount of Rs. 25,97,322/- being differential between the turnover shown in the Profit & Loss Account and figure of Rs. 53,89,300/- reported in the tax computation.
2.2 Aggrieved with the action of Ld. AO, the assessee approached the Ld. CIT(A), where also he could not succeed because apparently the assessee did not provide any written submission in support of the grounds of appeal. Thereby the Ld. CIT(A) relied on the findings given by the Ld. AO to uphold the addition.
“1. That on the facts and circumstances of the case, the Ld. CIT (Appeal) of National Faceless Appeal Centre erred in law in having upheld the addition of Rs. 25,97,332/- as unexplained money without going to the merit of the case.
2. That, on the facts and circumstances of the case, the Ld. CIT (Appeal) of National Faceless Appeal Centre erred in law by not upholding the natural justice as preserved by Constitution of India 3. That, the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds.” 3.1 Before us, the Ld. AR vehemently argued that it was not the intention of the assessee to hide any fact before the Ld. AO and it was only because of the error committed by the tax consultant that a wrong figure of turnover was adopted. The Ld. AR stated that the correct figure of turnover being Rs. 79,86,622/- was very much available before the Ld. AO and he could have assessed the income on a presumptive basis after adopting the enhance figure.
3.2 The Ld. DR relied on the orders of authorities below.
We have carefully perused the orders of authorities below, the documents placed before us by the Ld. AR and the averments of Ld. AR/DR. There is considerable merit in the arguments of Ld. AR that the correct figure of sales/turnover could have been easily assessed after assuming Rs. 79,86,622/- to be turnover of business. This fact was very much before the Ld. AO and hence to assume that the differential between the figure of turnover as per the Profit & Loss Account and the ledger figure shown in the computation of income, was an undisclosed amount, cannot be supported. It is worth reiterating that the correct figure was very much before the Ld. AO. However, it is undoubtedly a fact that the assessee adopted a wrong figure to compute his income. Considering the totality of facts and circumstances, we remand this matter to the file of Ld. AO for the limited purpose of computing the taxable income u/s 44AD of the Act, by
4. In the result, the appeal filed by the assessee is partly allowed.
Order pronounced in the court on 25.02.2025