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Facts
The assessee, engaged in wholesale/retail scrap trade, filed an ITR but did not audit its books despite a turnover of Rs. 16.58 crore. The AO added Rs. 4.39 crore for bogus purchases under Section 69C, taxable under 115BBE. The CIT(A) dismissed the assessee's appeal against this order.
Held
The ITAT found that the CIT(A) violated natural justice by dismissing the appeal after sending notices via email, despite the assessee having opted for physical communication in Form No. 35. Citing a precedent, the ITAT set aside the CIT(A)'s order and remanded the case for fresh adjudication, instructing the CIT(A) to provide proper opportunity, including physical notices.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without providing proper notice, thus violating natural justice, when the assessee had opted for physical communication but notices were sent via email, warranting a remand for fresh adjudication.
Sections Cited
Section 139, Section 144, Section 69C, Section 115BBE, Section 234A, Section 234B, Section 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
(ASSESSMENT YEAR-2021-22) Lokesh Gupta Income Tax Officer 6/73, Dobhi Wara Ward-58(7) Farsh Bazar, Shahdara Vs. Delhi Delhi-110032 PAN:AGCPG5037D (Appellant) (Respondent) Assessee by Shri Amit Kaushik, Adv. Respondent by Shri Pramod Kumar, Sr. DR Date of Hearing 16/10/2024 Date of Pronouncement 16/10/2024 O R D E R
PER VIMAL KUMAR, JM:
The appeal of the Assessee is against order dated 06/02/2024 of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi [hereinafter referred to as ‘Ld. CIT(A)’] arising out of Assessment Order dated 23/12/2022 of the Assessment Unit [hereinafter referred to as “Ld. AO”] for the Assessment Year 2021-22.
Lokesh Gupta vs. ITO 2. Brief facts are that assessee derives income from business of whole sale and retail trade of scrap items like Copper, Aluminum, Brass and Seera under the name the proprietorship “M/s Jai Shree Ram Trading Co.” The assessee filed its return of income in for the Assessment Year 2021-12 relevant to the Financial Year 2020-21, electronically u/s. 139 on 30/03/22022 declaring total income of Rs.9,05,810/-. On perusal of submission of assessee and ITR, it was found that assessee had not got audited its books of accounts even Sales/Gross receipts of business amount to Rs.16,58,28,974/- and had not furnished Form No.3CB. Details of opportunities given to appellant assessee are as under:-
Type of Date of Date of Response Response if (Full/part/ notice/com notice/comm compliance of the received adjournme munication unication given assessee nt) receive/not received 143(2) 28/06/2022 13/07/2022 Not N/A N/A Received 142)1) 17/08/2022 01/09/2022 Not N/A N/A Received 142(1) 29/09/2022 07/10/2022 Not N/A N/A Received Issued- 11/11/2022 Not 18/11/2022 Part Centralized Received communicati on in no responsive case 142(1) 23/11/2022 28/11/2022 Not N/A N/A Received SCN 07/12/2022 Received 11/12/2022 Part 142(1) 13/12/2022 17/12/2022 Received 17/12/2022 Part Lokesh Gupta vs. ITO 3. In course of assessment, on the basis of replies expenditure on account of bogus purchase amounting to Rs.4,39,49,603/- (25% of total purchase amount of Rs.17,57,98,414/-) was added to the total income u/s 69C and to be taxed at 60% as per provisions of section 115BBE of the IT Act.
Appellant/assessee filed appeal before Ld. CIT(A) which was dismissed vide order dated 06/02/2024.
Being aggrieved, appellant/assessee preferred present appeal with following grounds:- “
1. That the NFAC grossly erred in law and on the facts and circumstances of the case in dismissing the appeal of the Appellant by confirming the order dated 23/12/2022 passed by the Ld. Assessing Officer under section 144 of the Act without appreciating that the same was without jurisdiction and bad in law.
2. That the NFAC grossly erred in law and on the facts and circumstances of the case in dismissing the appeal of the Appellant by confirming the order dated 23/12/2022 passed by the Ld. Assessing Officer under section 144 of the Act in violation of the principles of natural justice.
3. That the NFAC grossly erred in law and on the facts and circumstances of the case in dismissing the appeal of the Appellant by confirming the order dated 23.12.2022 passed by the Ld. Assessing Officer under section 144 of the Act without application of mind to the material on record.
4. That the NFAC grossly erred in law and on the facts and circumstances of the case in dismissing the appeal of the Appellant by confirming the order dated 23/12/2022 passed by the Ld. Assessing Officer under section 144 of the Act making addition of Rs.4,39,49,603/- to the income of Appellant.
5. That the NFAC grossly erred in law and on the facts and circumstances of the case in dismissing the appeal of the Appellant by confirming the order dated 23/12/2022 passed by the Ld. Assessing Officer under section 144 of the Act making addition of Rs.4,39,49,603/- to the income of the Appellant without considering the provisions of section 69C of the Act.
Lokesh Gupta vs. ITO 6. That the NFAC on facts and in law erred in not deleting the interest levied by the Ld. Assessing Officer under section 234A, 234B and 1234C of the Act. 7. The Appellant craves for leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal.
8. That all the grounds are without prejudice to each other.”
6. Learned Authorized Representative for appellant/assessee submitted that the Learned CIT(A) failed to appreciate that assessee in Form No.35 had opted for service of notices in person and not through opted email. However, all notices for hearing of the appeal were sent through email which were not received by the appellant/assessee. Ld. CIT(A) dismissed the appeal in absence of appellant/assessee in violation of principle of natural justice, so the matter may be remanded to the Ld. CIT(A). Reliance was placed on order dated 14/08/2024 in titled as Luv Procon Pvt. Ltd. vs. ITO of Hon’ble ITAT, Ahmedabad.
The Learned Authorized Representative for Department of Revenue did not express any objection.
From examination of record, it is crystal clear that in Form No.35 assessee had not indicated its choice of notice/communication through email. However, Learned CIT(A) had sent all notices to the assessee by way of email and no physical notice was sent to the assessee. Learned CIT(A) dismissed the appeal of assessee in absence of assessee.
Lokesh Gupta vs. ITO 9. Hon’ble ITAT, Ahmedabad in titled as Luv Procon Pvt. Ltd. vs. ITO in para 8 held that:- “8. We have considered the submissions of the assessee and the facts of the case. It is found from Form No.35 that all the assessee had indicated its choice that no notice/communication may be sent on email. It appears from the order of Ld. CIT(A) that all the opportunities provided by him were by way of e-notices and no physical notice was sent to the assessee. When the assessee had categorically notified in Form No.35 that no notice/communication should be on email, the Ld. CIT(A) was not correct in dismissing the appeal by sending e-notices only. The assessee had also explained the reason for delay in Form No.35. It was submitted that the Director had lost his password and could not check his email account on which the order was sent. The matter come to the notice of the assessee when there was a notice for refund adjustment. The Ld. CIT(A) may decide the delay in filing of appeal before him on merits, taking a considerate view in the matter and after allowing a proper opportunity of being heard to the assessee. The matter is, therefore, set aside to the Ld. CIT(A) for fresh adjudication of the matter after allowing opportunity to the assessee by sending physical notices along with e-notices.”
In view of above material facts and well settled principle of law passing of impugned order has led to miscarriage of justice which is required to be remedied. Accordingly impugned order is set aside. The matter is restored to the file of Learned CIT(A) for fresh adjudication in accordance with law.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on16th October, 2024.