RAM RATAN SINGH PAL,LUCKNOW vs. ASSESSING OFFICER, NFAC, DELHI
Income Tax Appellate Tribunal, SMC BENCH, LUCKNOW
Before: SHRI. SUDHANSHU SRIVASTAVAAssessment Year: 2020-21
This appeal has been preferred by the Assessee against the order dated 18.01.2024, passed by the National Faceless
Appeal Centre, Delhi (NFAC) for Assessment Year 2020-21. 2.0
The brief facts of the case are that the assessee filed his return of income for the year under consideration on 15.01.2021, declaring a total income of Rs.2,81,520/- under the head income from salary. The return filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961 and a refund of Rs.2,50,510/- was created. Subsequently, the assessee filed revised return of income under section 139(5) of the Act on 25.02.2021, declaring the same income originally returned, i.e.,
Rs.2,81,520/-. In the revised return of income, the assessee declared income from salary at Rs.2,81,520/- and income from ITA No.387/LKW/2025 Page 2 of 8
business was shown as Nil. In the revised return of income, the assessee had shown sale of Rs.2,66,67,326/- and after claiming deduction on account of purchase at Rs.2,49,03,651/- and other expenses, the total income had been declared at Nil. The case of the assessee was selected for complete scrutiny for the reason of low income from Tax Collected at Source (TCS) receipts from liquor. The Assessing Officer (AO) issued statutory notices to the assessee. However, the assessee neither responded to the notices issued by the AO nor attended the proceedings before the AO.
Since no documentary evidence in support of the facts and figures mentioned in the books of account of the assessee were furnished, the AO rejected the books of account under section 145(3) of the Act and proceeded to calculate the income of the assessee from business/profession under section 144 of the Act on the basis of material available on record. The AO calculated the business/professional income of the assessee by applying profit rate @8%, as under:
Total purchase : Rs.2,49,03,650/-
Corresponding sale having element of 8%
of profit
:
Rs.2,49,03,650 X 100/92 = 2,70,69,185/-
8% of Rs.2,70,69,185/- = Rs.21,65,535/-
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1 The AO, thereafter, issued show cause notice on 24.03.2022, asking the assessee as to why the amount of Rs.21,65,535/- may not be added to the total income of the assessee under the head ‘income from business/profession’, and further as to why penalty proceedings under section 270A of the Act may not be initiated for under-reporting of income. In response, the assessee filed reply vide two letters dated 26.07.2022. Not being satisfied with the reply furnished by the assessee in response to the show cause notice, the AO proceeded to complete the assessment under section 144 of the Act and worked out the income of the assessee as under: Income from salary as per return of income Rs.3,31,523/- Addition of business/professional income on estimate basis Rs.21,65,535/- Gross total income. Rs.24,97,058/- Less Deduction under chapter VIA as per return of income Rs.50,000/- Total income Rs.24,47,060/- (rounded off)
2 Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee ex-parte qua the assessee and confirmed the order of the AO.
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3 Now, the assessee has approached this Tribunal challenging the orders of the AO as well as the NFAC, by raising the following grounds of appeal: 1. Because on the facts and in the circumstances of the case the order of Ld. CIT(A), NFAC is bad in law and deserves to be quashed being illegal. 2. Because, without considering the facts and in the circumstances of the case, the Ld. CIT(A), NFAC erred in law and on facts in confirming the addition of Rs.21,65,535/- to the total income returned by the assessee. 3. Because, without considering the facts and in the circumstances of the case, the Ld. CIT(A), NFAC erred in law and on facts in confirming the estimate of the total sales of the assessee for the previous year 2019-20 at Rs.2,70,69,185/-despite the assessee having already disclosed sales of Rs.2,66,67,326/- as per the audited financial statements filed along with the tax audit report issued under section 44AB of the Income Tax Act, 1961. 4. Because, without considering the facts and in the circumstances of the case, the learned assessing authority erred in law and on facts in estimating the profit percentage at 8% on the total sales. 5. Because, without considering the facts and in the circumstances of the case, the learned assessing authority erred in law and on facts in invoking section 145(3) of the Income Tax Act, 1961 and rejecting the regularly maintained books of accounts of the assessee.
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Because, without considering the facts and in the circumstances of the case, the learned Assessing Officer made the assessment on the basis of conjecture and surmise, without properly appreciating the income tax returns, written submissions and supporting documents filed by the assessee, and without due application of mind. 7. Because, without considering the facts and in the circumstances of the case, the Ld. CIT(A), NFAC did not provide the assessee a reasonable and sufficient opportunity to comply with notices and to respond to the proposed additions and disallowances made to the income returned. 8. Because on the facts and in the circumstance of the case, the order of Assessment has been passed in absolute violation of the principles of Natural Justice, without providing adequate opportunity of being heard and therefore deserves to be declared a nullity. 9. The appellant craves for leave to add, modify, amend or delete any other and further grounds of appeal with permission. 3.0 The Ld. Authorized Representative for the assessee (Ld. A.R.) submitted that there is a delay of 476 days in filing the appeal before the Tribunal. She further submitted that the assessee had filed an application dated Nil for condonation of delay, duly supported by an Affidavit and Medical Certificate/prescriptions, which was received by the Registry of this Office on 07.07.2025. The Ld. A.R. submitted that the assessee is an elderly person of about 70 years of age and mostly
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lives in Bangalore and he could not get timely information about passing of the first appellate order. It was further submitted that the assessee was suffering from brain hemorrhage during the period between January, 2023 and May, 2025 and, therefore, the assessee was not in a position to discuss the matter with his counsel for filing the appeal before the Tribunal, within the prescribed time limit. It was submitted that the delay caused in filing the appeal was not deliberate and that it was beyond the control of the assessee, which may please be condoned and the appeal be heard on merits.
4.0
The Ld. Sr. D.R. objected to the delay being condoned.
5.0
In view of the prayer made by the Ld. A.R., I condone the delay in filing of the appeal and admit the appeal for hearing.
6.0
The Ld. A.R. submitted before me that the NFAC has passed an order ex-parte qua the assessee, arbitrarily upholding the addition of Rs.21,65,535/- on an estimate basis being the business/professional income, which has been wrongly made by AO. The Ld. A.R. further submitted that the AO has not allowed adequate opportunity of being heard to the assessee and has passed the impugned assessment order under section 144 read with section 144B of the Act, without bringing on record any material in support of the addition which was made on the basis
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of presumption and surmises only. The Ld. A.R., therefore, prayed that, in the interest of justice, the matter may be restored to the file of the AO for deciding the same afresh after providing reasonable opportunity of being heard to the assessee. She submitted that the assessee undertakes to produce all the relevant documents in support of his claim before the AO.
7.0
The Ld. Sr. D.R. objected to the restoration of appeal to the file of the Assessing Officer and submitted that the appeal of the assessee be dismissed.
8.0
I have heard both the parties and have also perused the material on record. Looking into the facts of this case, I am of the considered view that the assessee deserves one last opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the AO with the direction to provide one more opportunity to the assessee to present his case along with necessary evidences. I also caution the assessee to fully comply with the directions of the AO in the set-aside proceedings when called upon to do so, failing which, the AO would be at complete liberty to pass the order in accordance with law, based on the material available on record even if it is ex-parte qua the assessee.
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0 In the result, the appeal of the assessee stands allowed for statistical purposes.
Order pronounced in the open Court on 21/11/2025. [SUDHANSHU SRIVASTAVA]
JUDICIAL MEMBER
DATED:21/11/2025
JJ: