VINAY GROVER,NEW DELHI vs. ITO WARD 36(1), NEW DELHI
Facts
The assessee's assessment for AY 2021-22 was completed ex-parte under section 144, leading to significant additions. The CIT(A) dismissed the assessee's subsequent appeal due to a 164-day delay in filing, despite the assessee's explanation of their accountant's unavailability due to a family medical emergency and the assessee's unawareness of assessment proceedings until contacting a new CA.
Held
The ITAT found sufficient and reasonable cause for the delay in filing the appeal before CIT(A) and for non-compliance before the AO. Consequently, the assessment order was set aside, and the case was remanded to the AO for a de novo assessment, with a direction to provide the assessee an opportunity of being heard.
Key Issues
Whether the CIT(A) erred in dismissing the appeal for belated filing; and whether the case should be remanded to the AO for de novo assessment after finding reasonable cause for delay and non-compliance.
Sections Cited
144, 144B, 142(1), 133(6), 145(3), 143(1), 143(1)(a), 40(ia), 234A, 234B, 234C, 249(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘H’: NEW DELHI
Before: SHRI CHALLA NAGENDRA PRASAD & SHRI BRAJESH KUMAR SINGH
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘H’: NEW DELHI
BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER
ITA No.3206/DEL/2023 [Assessment Year: 2021-22]
Vinay Grover, ITO, A-150, 1st Floor, Ward-36(1), Gujranwala Town-1, Vs Civic Centre, Minto Road, Delhi-110009 Delhi-110001 PAN-ACMPG3087H Assessee Revenue
Assessee by Shri Susheel Gupta, CA Revenue by Shri Amit Katoch, Sr. DR
Date of Hearing 15.04.2024 Date of Pronouncement 08.05.2024
ORDER PER BRAJESH KUMAR SINGH, AM,
This appeal by the assessee is directed against the order of
National Faceless Appeal Centre, Delhi, dated 17.09.2023 pertaining
to Assessment Year 2021-22.
The grounds of appeal raised by the assessee reads as under:-
“1. That Learned Commissioner of Appeal, National Faceless Appeal Centre [CIT(A)] has erred in law and on facts and circumstances of the case in dismissing the appeal on the ground of belated filing and assuming that there does not exist sufficient and reasonable cause which prevented the appellant in filing of the appeal within due date.
2 ITA No.3206/Del/2023
That Ld. CIT(A) has erred in law and on facts and circumstances of the case in dismissing the appeal on the ground of belated filing of appeal, despite the fact that several notices were issued to file written submissions which indicates that delay in filing of appeal had already been condoned. 3. That Ld. CIT(A) has erred in law and on facts and circumstances of the case in dismissing the appeal on the ground of belated filing of appeal once the written submissions in support of merits of the case were considered by, him while deciding the appeal. 4. That Ld. CIT(A) has erred in law and on facts and circumstances of the case in dismissing the appeal on the ground of belated filing of appeal which is against the principle of natural justice and denies substantial justice. 5. That Assessment Unit, Income Tax Department has erred on facts and circumstances of the case in assessing the income of the appellant at Rs.7,61,23,452/- as against returned income of Rs.7,73,380/- 6. That Assessment Unit, Income Tax Department has erred on facts and circumstances of the case in considering the turnover of the assessee at Rs.64,03,77,564/- as against actual turnover of Rs.52,36,04,752/-. 7. That Assessment Unit, Income Tax Department has erred in law and on facts and circumstances of the case in considering the entire purchase of the assessee as bogus purchase. 8. That Assessment Unit, Income Tax Department has erred in law and on facts and circumstances of the case in rejecting the audited books of account of the assessee: 8.1 Without recording his satisfaction as required under section 145(3) 8.2 without pointing out any defect or discrepancy in books of accounts 8.3 without brining on record any cogent material but on the basis of surmises and conjecture only 8.4 on the basis of general observation that "assessee might have purchased the goods from grey/ dark market earning him a higher profit than that has been declared"
3 ITA No.3206/Del/2023
8.5 on the basis of non-response or unfavourable response of the suppliers to the notices issued under section 133(6) 9. That Assessment Unit, Income Tax Department has erred in law and on facts and circumstances of the case in estimating the gross profit @ 12.50% 9.1 without considering the past trend the business of the appellant and industry comparable 9.2 which is not only exorbitant but also unreasonable to earn and 9.3 purely on the basis of guess work, surmises and conjecture 10. That Assessment Unit, Income Tax Department has erred in law and on facts and circumstances of the case in estimating the gross profit @ 12.50% on entire sales instead of the excess profit embedded in the alleged, without agreeing to and admitting, bogus purchase of Rs 30,00,300/- from Mr. Ketan Yadav who has declined to have made any business transaction with the appellant. 11. That Assessment Unit, Income Tax Department has erred in law and on facts and circumstances of the case in making addition of Rs.94,24,690/- on account of income computed u/s 143(1)(a) without even discussing, making enquiry thereof and without issuing show cause notice therefore. 12. That Assessment Unit, Income Tax Department has erred in law and on facts and circumstances of the case in making addition of Rs.80,00,000/- on account of short- term capital gain. 13. That having regard to the facts and circumstances of the case, Assessment Unit has erred in law and on facts and circumstances of the case in charging interest u/s. 234A, 234B and 234C of Income Tax Act, 1961. 3. Brief facts of the case: The assessment in this case was completed
u/s 144 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter ‘the Act’) on
26.12.2022 by the assessment unit, Income Tax Department. The
assessed income was assessed at Rs.5,86,98,762/- as against the
4 ITA No.3206/Del/2023
returned income of Rs.7,73,380/-. The AO noted that the case was
selected for complete scrutiny for the following reasons:-
"Assessee has made substantial purchases from such suppliers who are either Non-Filers) or have filed non-business ITR or reflected a substantially lower turnover in ITR as compared to turnover shown in GSTR 1 return. There is a possibility that assessee has booked bogus expenses in order to reduce its profit/taxable income. Therefore, the genuineness/correctness of expenses related with these entities may be verified." 3.1. The AO noted that on verifying the GST information available on
record, it was seen that during the year the assessee had made purchases
from parties, who are either non-filer or have filed non-business ITR. The
AO issued notice u/s 142(1) dated 09.11.2022 to the assessee inter alia to
furnish the following details/documents:-
I. Note on business II. Trade creditor details III. Details of the person from whom purchase made during the year including name, pan, amount of purchase and mode of payment. IV. Reconciliation statement with GSTR returns V. Bank statement etc.
3.2. The assessee did not respond to the said notice and other notices as
discussed in the assessment order on page-4, were not responded by the
assessee. Therefore, the AO issued notices u/s 133(6) to the suppliers
mentioned in the table as reproduced in the assessment order (on pages 2
to 4). The AO noted the fact that one supplier namely Ketan Yadav denied
the transactions and in respect of other two persons Shri Santosh Das
and Shri Yash Tandon, the notices came back unserved. The AO, in view
5 ITA No.3206/Del/2023
of the discussion held that as the assessee has not filed reconciliation of
total sales of Rs.64,03,77,564/- declared in GSTR-1 as against the sales
of Rs.52,36,04,752/- declared in his ITR, after rejecting the book result
adopted the sales amounting to Rs.64,03,77,564/-as its turnover. The AO
proposed that the gross profit will be @12.5% of the total turnover and
issued as show-cause notice dated 09.12.2022 but again the assessee did
not furnish any reply. In view of these facts, the AO determined 12.5% as
estimated GP of the total turnover amounting to Rs.64,03,77,564/- at
Rs.8,00,47,195/- and after reducing the GP declared amounting to
Rs.1,26,97,126/- made an addition of Rs.6,73,50,069/-.
3.3. Further, the AO also on the basis of information (from Sub-
Registrar VI-A, Pitampura, Delhi) on a sale of plot of Rs.80 lakhs, added
an amount of Rs.80 lakhs as Short Term Capital Gains in absence of any
explanation furnished by the assessee. The AO also noted that in the
proceedings u/s 143(1), an amount of Rs.86,51,307/- was disallowed u/s
40(ia) of the Act. The AO noted that since the books results have been
rejected and therefore net addition/disallowance on account of GP
addition is restricted to Rs.5,86,98,762/- (Rs.6,73,50,069 - 86,51,307).
The learned CIT(A) dismissed the appeal of the assessee on the
ground that there was a delay of 164 days in filing the appeal holding that
the appeal is rendered as inadmissible and discussed several case laws on
the issue of the delay in filing of the appeals.
During the appellate proceeding before us, the AR submitted that
the order u/s 144 r.w.s. 144B was passed on 26.12.2022 and appeal was
6 ITA No.3206/Del/2023
due to be filed before the Commissioner of Income Tax(A), NFAC, Delhi,
on or before 25.01.2023, whereas, the appeal was filed on 11.07.2023 and
there was a delay of 164 days in filing of the appeal. The reasons given for
the delay was that in the Income Tax portal, the communication details of
his accountant was given, who was busy in cancer treatment of his
mother, who expired on 29.09.2023 in Mumbai. He, further stated that he
had not accessed his account on Income Tax portal and he was not aware
of the income tax assessment proceedings and the assessment order
passed on 26.12.2022 and that he became aware of the assessment order
when he contacted his CA for his other professional work. It is also stated
that he registered his communication details on the IT portal on
22.06.2023. In this regard, an affidavit dated 13.04.2024 was filed by the
assessee, which is reproduced as under:-
7 ITA No.3206/Del/2023
8 ITA No.3206/Del/2023
5.1. In view of these facts, the AR submitted that since the appeal was not heard on merits by the learned CIT(A) and also due to communication gap the matter was not attended by the assessee during the assessment proceedings and ,therefore, requested that the matter may either be set- aside to the file of the CIT(A) or to the AO for de novo assessment.
We have considered the facts of the case, the order of the learned CIT(A), the submissions of the AR and the affidavit dated 13.04.2023 filed by the deponent assessee. On perusal of the affidavit of the assessee, we are of the view that there was a reasonable cause for the delay in filing of the appeal before the learned CIT(A) as well as for non-compliance before the AO during the assessment proceedings. The reasons given by the Ld. CIT(A) for not condoning the delay is not acceptable as no facts have been brought by him to show that the delay in filing of the appeal was without a reasonable and sufficient cause. Hence, in the interest of justice, the assessment order passed in this case u/s 144 r.w.s. 144B of the Act dated 26.12.2022 is set-aside to the file of the AO for de novo assessment. The AO shall adjudicate the issue afresh after giving the assessee an opportunity of being heard.
In the result, the appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 08th May, 2024.
Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 08.05.2024. ff^? ff^ ff^ ff^
9 ITA No.3206/Del/2023
