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Facts
The assessee did not file its Return of Income for AY 2012-13, leading to the reopening of the assessment under Section 147 based on information of professional fees received. After the assessee filed a belated ROI, the AO made additions, including for unsecured loans under Section 68 and disallowance of business expenses, which were sustained by the CIT(A) due to lack of evidence.
Held
The Tribunal admitted the additional evidence submitted by the assessee, noting its relevance to the core of the case. It set aside the CIT(A)'s order and restored the assessment to the Assessing Officer for fresh consideration, instructing the AO to verify the additional evidence and delete the impugned additions if supported by it.
Key Issues
Whether the additions made by the AO for unsecured loans and disallowance of business expenses were justified; and the admissibility and verification of additional evidence by the AO.
Sections Cited
147, 148, 142(1), 143(2), 68, 144, 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI “SMC” BENCH: NEW DELHI
Before: SHRI KUL BHARAT
ORDER
PER KUL BHARAT, JM :
The present appeal filed by the assessee is directed against the order passed by Ld.CIT(A), National Faceless Appeal Centre (“NFAC”), Delhi dated 08.12.2023 for the Assessment Year (“AY”) 2012-13.
The assessee has raised following grounds of appeal:-
1. “The learned assessing officer has erred in assessing the income of the assessee at Rs.2.222,291/- as against the returned income of Rs. 22,357/- by the appellant.
2. The learned assessing officer has erred in making the addition of Rs.940,000/- on account of Unsecured Loans U/s 68 of the Act. 3. The learned assessing officer has erred in disallowing the business expenses of Re 1,259,934/-. 4. The learned assessing officer has erred in disallowing the ad hoc business expenses @ 25% of the total expenses incurred by the assessee.
The learned Commissioner of Income Tax erred in confirming the order of the assessing officer passed U/s 144/147 of the Act.
6. The learned assessing officer erred in initiating the Penalty proceedings U/s 271(1)(c) of the Act. 7. The appellant craves leave to amend, alter, modify, add or delete any of the ground of appeal
on or before disposal of appeal.”
3. Facts giving rise to the present appeal are that in this case, the Assessing Officer (“AO”) was having information about the assessee company having received fees for professional/technical services during the Financial Year (“FY”) 2011-12. It was further noted that the assessee did not file its return of income for the Assessment Year 2012-13. Accordingly, the case was re-opened for assessment u/s 147 of the Income Tax Act, 1961 (“the Act”). A notice u/s 148 of the Act was issued through ITBA portal on 25.03.2019. Thereafter, a notice u/s 142(1) of the Act alongwith questionnaire was issued on 20.07.2019, fixing the case for hearing on 26.07.2019 which remained uncomplied on behalf of the assessee. The assessee company filed its return of income for Assessment Year 2012-13 on 13.08.2019, declaring total income at INR 22,357/-. A statutory notice u/s 143(2) of the Act, was issued to the assessee. In response thereto, the assessee filed its response which was not accepted by the assessing authority on the basis that the averments were not supported with evidence.
4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who after considering the submissions, sustained the addition and dismissed the appeal of the assessee.
5. Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal.
Apropos to the grounds of appeal, Ld. Counsel for the assessee submitted that an application seeking admission of additional evidences has been filed on behalf of the assessee. He submitted that these evidences are necessary and relevant for adjudication of the dispute.
7. On the other hand, Ld. Sr. DR for the Revenue opposed these submissions and supported the orders of the authorities below. He contended the admission of additional evidences.
8. I have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. Further, looking to the evidences which goes to the root of the case and for the reasoning given for failure to furnish before the lower authorities, same is hereby admitted. The impugned order is hereby, set aside and the evidences alognwith assessment is restored to the file of AO who would consider the same and verify the correctness of the evidences. If the evidences support the contention of the assessee, the AO would delete the impugned addition. Grounds raised
by the assessee are accordingly, allowed for statistical purposes.