KUSHAL PRASAD SAHU, BILASPUR,BILASPUR vs. ACIT, CIRCLE1(1), BILASPUR, BILASPUR

The captioned appeals are filed by the assessee against the orders of Commissioner of Income Tax (Appeals), NFAC, Delhi, [in short “Ld. CIT(A)”], under section 250 of the Income Tax Act, 1961 (in short “the Act”), both dated 28.10.2024, for the AY 2012-13, which in turn arises from the order passed by Assistant Commissioner of Income Tax, Circle-1(1), Bilaspur, (in short “Ld. AO”), u/s 144/147 of the Act, dated 02.11.2018 and penalty order u/s 271(1)(c) dated 29.05.2019.

Brief facts of the case as apprised and available on record, are that the assessee is an individual, working as an employee in the capacity of “Goods Train Guard” with South Eastern Central Railway (SECR) of Indian Railways, Bilaspur, during the year under consideration i.e., AY 2012-13. The assessee has received salary income of Rs.14,53,896/- in the relevant year, however, had not filed his Return of Income (ROI). Because of non-filing of ROI by the assessee, the case was picked up for re-opening assessment u/s 147 by the Ld. AO, having the belief that the income earned by the assessee has escaped assessment within the meaning of section 147 of the Act. Notice u/s 148 was issued on 26.03.2018 and as per Ld. AO, the same is duly served upon the assessee. Further notice u/s 142(1) of the Act dated 13.10.2018 along with questionnaire was issues to the assessee, however there was no response by the assessee, accordingly, show cause notice stating that “why your assessment should not be completed u/s 144 of the Act?”, was issued. But again, the assessee remains non-compliant. In view of such non-attentive / non-responsive approach of the assessee, Ld. AO passed an assessment in the manner prescribed u/s 144 of the Act and had made an addition of Rs.14,53,896/- in the income of the assessee, based on figure of salary received by the assessee reflecting in the 26AS.

At the outset, Shri G.S. Agrawal, CA, Authorized Representative (in short “Ld. AR”) on behalf of the assessee have submitted that the order of Ld. CIT(A) is not justified as the observation of Ld. CIT(A) that the appellant has not filed Form 35 along with statement of facts, grounds of appeal etc., itself was an erroneous observation, therefore, the order of Ld. CIT(A) is liable to be set aside. Another contention raised by the Ld. AR was that the order passed by Ld. AO u/s 144/147 was not in accordance with law, as the notices issued did not came to the knowledge of the assessee also it appears that there was no approval u/s 151 of the Act. Ld. AR further submitted that, Ld. CIT(A)’s order was suffering with the infirmity therein as on account of dismissal of the appeal of assessee confirmed the additions made by the Ld. AO, whereas the legitimate credit of TDS for Rs.2,46,660/- was not allowed by the Ld. AO to the assessee and eligible deduction u/s 80C of Rs. 1,00,000/- were not considered while computing the assessable income of the assessee. Ld. AR submitted that appellant is working as Goods Trains Guard staff of Indian Railways i.e., SECR, Bilaspur and due to his nature of employment, he is used to stay outside of his usual residence. The TDS is & 15/RPR/2025 Kushal Prashad Sahu Vs ACIT, Circle-1(1), Bilaspur being made by the employer & because of his unstable place of residence, his Return of Income could not be filed and the notices for assessment were not received. Considering such facts and circumstances, it was the prayer by Ld. AR that there is no doubt that TDS was deducted from the Salary of the assessee, which is duly reflected in 26AS (copy submitted before us at page no. 1 and 2 of the APB), therefore, the matter may be restored back to the file of Ld. AO for verification of facts and to adjudicate the issue afresh considering the TDS deducted and credit available in Form 26AS of the assessee and to allow deduction u/s 80C of the Act in accordance with the eligible investment made by the assessee.

We have considered the rival submissions, perused the material available on record including the copies of document furnished before the revenue authorities by the assessee. Under the factual matrix of the present case, it is evident that the assessee had not filed his ROI, however had received Salary of Rs.14,53,896/- during the AY 2012-13 from his employer & 15/RPR/2025 Kushal Prashad Sahu Vs ACIT, Circle-1(1), Bilaspur SECR, Bilaspur. It is also a documented fact that the TDS of Rs.2,46,660/- was deducted from the Salary of the assessee, as evident from the 26AS of the assessee. The relevant portion of 26AS furnished before us is extracted as under:

Observation by Ld. CIT(A), that the assessee had not filed Form 35 is incomprehensible and has no substance to concur with, as to how appellate proceedings are initiated by the First Appellate Authority without having Form 35 with him, further it is substantiate before us by the Ld. AR that by submitting copies of Form 35 and statement of facts that such necessary documents are duly furnished by the assessee on 05.03.2024 vide & 15/RPR/2025 Kushal Prashad Sahu Vs ACIT, Circle-1(1), Bilaspur acknowledgment No. 134085880050324. Further, we are surprised to note that the addition in the case of assessee was made by the Ld. AO in absence of any response by the assessee based on income of the assessee reflected in Form 26AS, but the TDS credited available in Form 26AS was not allowed to the assessee, which obviously would have reflected in Form 26AS against the entries of Salary (Amount paid / credited) and recorded as transactions u/s 192 of Act. The contention of Ld. AR that, the assessee is a Goods Train Guard, which is regularly placed on duties outside of his usual residence, and therefore, notices issued by the department could not have found his attention and he was unable to respond on time, cannot be the sole reason to allow the assessee to adopt non-responsive and evasive approach towards the tax compliances, however, as the legitimate credit of TDS was not allowed by the Ld. AO, in spite of having such facts on records, we find perversity in the order of Ld. AO, therefore, the same needs to be set aside and in the interest of substantial justice, we deem it fit to restore this matter back to the file of Ld. AO, by setting aside the impugned order, for verification of the facts of the present case and to re-assess the income of the assessee after allowing the legitimate TDS credited and the eligible deductions available under the mandate of law.

Since the quantum appeal of the assessee in Ld.AO, therefore, the appeal in against the impugned order assailing penalty levied vide order of Ld. AO u/s 271(1)(c), which is consequential in nature, thus, the impugned appellate order is set aside and the matter is restored back to the file of Ld. AO of the assessee are partly allowed for statistical purposes, in terms of our observations.