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Facts
The assessee, Anjana Enterprise, did not file a return for AY 2011-12. The AO, based on Form-26AS data, found contract income of Rs. 55,99,901/- and reopened the case. The AO added Rs. 13,99,980/- as net income after allowing 75% as expenses.
Held
The Tribunal noted that the Form-26AS clearly showed credits of Rs. 55,99,901/- to the assessee's PAN, with TDS deducted. The assessee's claim of the firm being closed since 2004 and not receiving the income was not supported by cogent evidence, especially the delay in requesting PAN cancellation.
Key Issues
Confirmation of addition of contract income based on Form-26AS despite the assessee claiming the firm was closed and income was not received.
Sections Cited
250, 143(3), 147, 148, 142(1), 133(6)
AI-generated summary — verify with the full judgment below
Before: MS. SUCHITRA RAGHUNATH KAMBLE & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 26.02.2025 by the Commissioner of Income-tax-Appeal Addl/JCIT(A)-3, Chennai [in short, ‘CIT(A)’] for the assessment year (AY) 2011-12, which in turn arises out of assessment order passed by Assessing Officer (in short, ‘AO’) u/s 143(3) r.w.s. 147 of the Act dated 03.12.2018.
Grounds of appeal
raised by the assessee are as under: “1) The ld. CIT(A) has erred in confirming the addition of Rs.13,9,975/- being the contract income on the basis of Form No.26AS.”
3. Facts of the case in brief are that assessee did not file return of income for AY 2011-12. However, the AO found from the information available on ITS A.Y 11-12 Anjana Enterprise data-base that assessee had earned contract income of Rs.55,99,901/- during the FY 2010-11 (AY 2011-12). Hence, the case was reopened u/s 147 by issuing notice u/s 148 of the Act on 27.03.2018. In response to assessee filed a letter dated 01.06.2018 and submitted copy of return dated 01.06.2018 declaring total income at Rs.Nil. The objection of the assessee to the notice u/s 148 was rejected vide order dated 12.07.2018. Thereafter, notice u/s 142(1) was issued, but assessee did not comply to the said notice. The AO again issued show cause notice dated 20.06.2018. In response, the assessee filed reply denying having received the amount mentioned in Form-26AS. The AO issued notice u/s 133(6) to the parties from whom he received contract income but there was no reply from the said parties. In view of the above, AO allowed 75% of the receipt as expenses and added the remaining 25% as net income of the assessee. Accordingly, he added Rs.13,99,980/- to the total income of assessee.
4. Aggrieved by the order of AO assessee filed appeal before CIT(A) who issued various notices as mentioned in para-5 of the appellate order. The assessee submitted that the assessee-firm is closed since 31.03.2004 but the CIT(A) observed that assessee had continued to received credits from various entities as mentioned in para-6.3 of the appellate order. He observed that assessee is regularly carrying out business activities but it is not disclosing the income in its return of income. He did not accept the plea of the assessee and dismissed the appeal.
A.Y 11-12 Anjana Enterprise 5. Aggrieved by the order of CIT(A), assessee has filed present appeal before the Tribunal. The Ld. AR has filed affidavit from the ex-partner of M/s Anjana Enterprises deposing that they have not received contract amount of Rs.55,90,901/- during the year under consideration. It is submitted that the firm had closed its business since last 12 years and the assessee had requested to AO vide letter dated 13.09.2018 (page-48) to cancel the PAN. The Ld. AR has reiterated the submission made before the lower authorities.
On the other hand, Ld. Sr-DR for the revenue relied on the orders of the lower authorities. He submitted that the Form-26AS makes it clear that appellant had received various amounts from Hindustan Petroleum Co. Ltd. (HPCL), which had not been shown in the return of income. The appellant has not brought any evidence on record to show that it had not received the aforesaid amount from HPCL. Therefore, the AO has rightly added the amount which was sustained by the CIT(A).
We have heard both the parties and perused the materials on record carefully. It is clear from the From-26AS that various amounts aggregating to Rs.55,99,901/- were credited to the account of Anjana Enterprise bearing PAN: AAHFA 6635 L, from which TDS of Rs.1,11,998/- was deducted. The PAN in the Form-26AS matches with the PAN of the appellant. The Ld. AR has enclosed copy of the letter submitted to the AO on 13.09.2018 requesting to cancel the PAN. It is stated that copy of the Dissolution deed was also enclosed therewith. However, copy of the Dissolution deed is not filed by the Ld. AR. It is also not A.Y 11-12 Anjana Enterprise understood as to why request for cancellation of PAN was made after more than 14 years and 6 months on 13.09.2018, if the company was dissolved on 31.03.2004. Therefore, the contention of the appellant is neither convincing nor supported by cogent evidences. However, in the interest of justice and fair play, the matter is restored to the file of CIT(A) for fresh adjudication. The appellant is directed to provide all bank statements and confirmation from the HPCL that it had not received any contract income from HPCL during the year under consideration. The CIT(A) may call for any other information or explanation from the appellant to arrive at a reasonable and logical conclusion on the subject issue. He should allow adequate and reasonable opportunity of hearing to the appellant. The assessee is also directed not to take adjournment without valid reason. This ground of assessee is allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.