Loading judgment…
Facts
The assessee challenged an assessment order under Section 143(3) and a subsequent appellate order under Section 250, where additions were made for disallowance of indexed cost of long-term capital gains, estimated income in the absence of books, and a difference in income reflected in Form 26AS. The CIT(A) upheld these additions because the assessee failed to attend or submit required documents, leading the assessee to file 13 grounds of appeal before the ITAT. A delay of 43 days in filing the appeal was condoned by the Tribunal.
Held
The ITAT noted that the assessee filed significant new evidence (11 out of 14 items in a paper book) for the first time before the Tribunal. Considering these facts and circumstances, the ITAT decided to remand the matter back to the Ld. CIT(A) for fresh adjudication, instructing the CIT(A) to admit the new evidence strictly under the provisions of Rule 46A of the Income Tax Rules, and ensuring the assessee adheres to its requirements.
Key Issues
Whether the additions made by the AO and confirmed by the CIT(A) were justified, specifically regarding disallowance of LTCG, estimated income, and 26AS mismatch, given the assessee's claim of lack of opportunity and the submission of new evidence for the first time at the ITAT stage.
Sections Cited
Income Tax Act, 1961, Section 250, Section 143(3), Section 145(3), Section 270A, Rule 46A of the Income Tax Rules
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “PATNA BENCH” PATNA
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
The ITAT Registry has informed there is a delay of 43 days in this matter. The assessee has filed a petition requesting for condonation of the said delay as under:
“1. That this is an application for condonation of delay in the filing of the instant appeal. 2. That the petitioner states that the impugned order was passed on 17.11.2023 by the Id Commissioner of Income Tax (Appeal) at National Faceless Appeal Centre, Delhi. 3. That the petitioner states that though the above order was passed on 17.11.2023, the impugn order was served upon the appellant through email and the appellant is not accustomed to using emails.
The appellant states that he was required to file the appeal by 17.01.2024. The appellant states that there is a delay of around 1.5 months in filing the present appeal.
That the petitioner states that he is person of around 56 years of age and was suffering from illness for the last several months. Medical Documents are enclosed.
That the petitioner submits that the delay in filing the present appeal is not attributable to the petitioner 7. That the petitioner states that the delay had happened beyond the control of the petitioner and the same merits to be condoned. It is, therefore, prayed that this Hon'ble Tribunal may graciously be pleased to consider the submissions as made in the foregoing paragraphs and further be pleased to condone delay, if any, in the filing of the instant appeal. And for this the petitioner shall ever pray.” 1.1 Considering the reasons given in the said petition, the delay is hereby condoned and the matter is admitted for adjudication.
2 This appeal emanates from the order dated 17.11.2023 passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the “Ld. CIT(A)”] u/s 250 of the Income Tax Act, 1961 (hereafter ‘the Act’).
2.1 In this case, the Ld. AO passed an order dated 28.12.2019 u/s 143(3) of the Act after making the following additions: (a) Disallowance on account of cost Long Term Capital Gains at Rs. 1,72,18,004/- (b) Rs. 91,61,983/- added after estimating income on the basis of gross receipts, in the absence of books of accounts. (c) Rs. 8,85,666/- added on account of difference in income shown in return with that available in Form 26AS.
2.2 Aggrieved with this action, the assessee approached the Ld. CIT(A) where also he could not succeed mainly for the reason that he did not attend to any of the 5 notices sent to him for presenting his submissions etc. 2 2.3 Further, aggrieved with this action, the assessee has approached the ITAT through as many as 13 grounds of appeal s which are lengthy and argumentative. However, for the sake of record, the same need to be extracted:
1. For that the grounds of appeal hereto are without prejudice to each other.
2. For that the appellate order dated 17/11/2023 bearing DIN & Order No: ITBA/NFAC/S/250/2023-24/1058012118(1) passed under Section 250 of the Income Tax Act, 1961 (hereinafter called the Act) by the Id. First Appellate Authority, viz. the Commissioner of Income Tax (Appeal) at National Faceless Appeal Centre (NFAC), Delhi, is bad both in law and on facts.
3. For that the order of assessment dated 28/12/2019 bearing & Order No: ITBA/AST/S/143(3)/2019-20/1023299609(1) passed under Section 143(3) of the Act by the Id. assessing officer, viz. the Assistant Commissioner of Income Tax, Circle-4, Patna, is bad both in law and on facts.
4. For that the appellant was not given any opportunity, much less sufficient opportunity, to put forth his contentions and place evidences henceforth at the time of assessment proceeding.
5. For that the order of the Id. Commissioner of Income Tax (Appeal) as well as the order of the Id. assessing officer is based on presumption, surmises and conjectures.
6. For that the order of the Id. Commissioner of Income Tax (Appeal) as well as the order of the Id. assessing officer is wholly perverse in as much as the same are contrary to and at variance with the materials available on record.
7. For that the order of assessment passed under Section 143(3) of the Act by the Id. assessing officer is far from best judgment assessment as envisaged in law.
8. For that the Id Commissioner of Income Tax (Appeal) has erred in not allowing the prayer for adjournment by the appellant notwithstanding the fact that the appellant was not well.
9. For that the Id. Commissioner of Income Tax (Appeal) as well as the ld. assessing officer has erred in disallowing and adding back the index cost of improvement to the tune of Rs.1,72,34,608 (Actual cost of improvement Rs.12,01,200 X 264/184) claimed by the appellant in its return of income for the purpose of long term capital gain and taxing the same as capital gain, notwithstanding the fact that the appellant has given sufficient documentary evidences before the Id assessing officer to substantiate the claim of cost of improvement.
10. For that the Id. Commissioner of Income Tax (Appeal) as well as the Id. assessing officer, without given sufficient opportunity, has erred in estimating the profit at Rs.1,12,71,950 (@ 6% of the contract receipt of Rs.18,78,65,833) and adding Rs.91,61,983 (being estimated income of Rs.1,12,71,950 less net income from contract shown in ITR at Rs.21,09,967), notwithstanding the fact that the Id assessing officer has not rejected the books as section 145(3) of the Act and that Prabhat Kumar the appellant has maintained books of accounts and bill and vouchers for expenses as well as most of the expenses have been through banking channel.
11. For that the Id. Commissioner of Income Tax (Appeal) as well as the Id. assessing officer, without given sufficient opportunity, has erred in holding that there is difference between the income from house property as per 26AS and income from house property shown in ITR and added back Rs.8,85,666 (Rs.2,03,27,693 less Rs.1,94,42,027) to the total income of the appellant, notwithstanding the fact that the difference is reconcilable.
12. For that the Id. assessing officer has erred in initiating penalty proceeding under Section 270A of the Act.
13. For that the appellant shall place any other point/points at the time of hearing of the appeal.”
3. On the last date of hearing, none appeared on behalf of the assessee, however, it was deemed fit to dispose of this matter with the help of Ld. DR. 3.1 The Ld. DR took us through the orders of authorities below and basically supported their action by showing that since the assessee did not produce books of accounts etc. and other details before the Ld. AO, hence, the additions made were justified. The Ld. DR pointed out that even before the Ld. CIT(A), the assessee did not make any presentation of facts at all.
3.1 We have carefully considered the averment of Ld. DR and also gone through the documents before us. It is seen that the assessee has also filed a paper book running into 190 pages containing 14 items. It has been mentioned that only item Nos.1 to 3 were before the Ld. AO and remaining 11 items are apparently being filed for the first time before the ITAT. It is seen that there is considerable new evidence filed through this paper book which is not in consonance with the ITAT’s procedures, but considering the totality the facts and circumstances, we deem it fit to remand this matter back to the file of Ld. CIT(A) for fresh adjudication. The Ld. CIT(A) would adjudicate after admitting the new evidence under the provisions of 4 Prabhat Kumar Rule 46A of the Income Tax Rules. The assessee would do well to adhere to the letter of Rule 46A of the IT Rules and present necessary documents before the Ld. CIT(A).
4. With this remanding back to the Ld. CIT(A), this appeal is allowed for statistical purposes.
Order pronounced in the court on 04.02.2025