SUSHIL KUMAR,MUZAFFARNAGAR vs. ITO, MUZAFFARNAGAR

PER SHRI K.N. CHARY, JUDICIAL MEMBER Aggrieved by the order dated 04.05.2011 in appeal no. 238/10-

11/MZR passed by the Ld. Commissioner of Income Tax (Appeals)-

Muzaffarnagar (hereinafter for short called as the “Ld. CIT (A)”) assessee

preferred this appeal on the following grounds:

2 ITA No. 4024/Del/2011

business offered under the presumptive provisions of Section 44AD & 44AF of the Income Tax Act. 3. That the Ld. CIT (A) has filed to appreciate the material on record as also before the AO, not justifying any additions towards the appellant’s income. 4. That the appellant reserves his rights to add, amend or modify any ground of appeal.” 2. Briefly stated facts are that the AO gathered information that the

assessee had made cash deposits of Rs. 11,00,500/- in the account with

Vijaya Bank on 31.03.2005 without mentioning his PAN No. and

consequently AO required the assessee to furnish the return of income.

Assessee explained that the return of income was filed on 24.10.2005 on

which AO found that the return was filed only with computation of income

in respect of the business income of Rs. 42,850/- along with interest, as

such, the AO inferred that the deposit of Rs. 11,00,500/- was not

explained in the return of income. AO initiated proceedings u/s 147 of the

Income Tax Act, 1961 (for short called as the “Act”) by issuance of notice

u/s 148 of the Act, but since there was no compliance from the assessee

notice u/s 271(1)(b) of the Act was issued and for non compliance

therewith proposal for penalty u/s 272A(1)(c) of the Act was sent.

Subsequently summons u/s 131 of the Act were also issued but there was

no compliance. Since there was no response from the assessee, AO

issued notice u/s 144 of the Act and since there was no response AO

completed the reassessment u/s 144 of the Act making addition of Rs.

3 ITA No. 4024/Del/2011

11,00,500/- and interest thereon. Appeal preferred by the assessee to the

Ld. CIT (A) was dismissed by the Ld. CIT (A) stating that once having

responding to notice u/s 148 of the Act the assessee subsequently

remained silent thereby forceing the AO to conclude the reassessment u/s

144 of the Act and since so many statutory notices were issued to the

address furnished by the assessee, though they were never returned,

presumption was drawn by the Ld. CIT (A) that the assessee must have

received them. Ld. CIT (A) further recorded that the explanation of the

assessee that he shifted his residence from Muzaffarnagar to Roorkee

cannot be accepted because the assessee never informed the change of

address to the AO. Ld. CIT (A) lastly held that even if the notices were not

served on the assessee, issuance of notice within the period of limitation

for reassessment gives jurisdiction to the AO. On these grounds Ld. CIT

(A) dismissed the appeal. Hence, the assessee is before us in this

appeal.

authorities below that his father of the assessee got heart attack and was

under treatment, as such, the assessee was in village Kaschri looking

after his father in the year 2009 and that subsequently the assessee had

to shift his residence to Rookee for employment, as such, he did not

4 ITA No. 4024/Del/2011

receive the notice there was no proper appreciation of this fact by the

authorities. As a matter of fact, ld. AR submits that the assessee was

regularly assessed to tax since AY 1992-93 and was declaring the income

at 8% of the contractual receipts and other income from retail trading of

medicines. However, AO was not convinced with the submissions of the

assessee in respect of non compliance with the notices. Ld. AR submits

that the assessee was prevented by sufficient reason from complying with

the alleged notices said to have been issued by the AO. In the

circumstances, it is prayed on behalf of the assessee that if an opportunity

is granted to him he would cooperate with the assessee for assessment of

his just tax liability by producing all the relevant documents. Ld. DR

vehemently relied upon the orders of the authorities below and submitted

that the assessee is guilty of willful non cooperation with the proceedings,

as such, the AO is justified in completing the reassessment u/s 144 of the

Act.

proceedings as recorded by the AO and the CIT in their orders. However,

it is evident from the record that though the notices were said to have

been issued, there is no evidence to show that those notices were served

on the assessee. Explanation offered by the assessee is that due to the ill

5 ITA No. 4024/Del/2011

health of his father and for employment the assessee was away from his

address that was available with the authorities. Since the reassessment

had to be completed within the period of limitation, proceedings are

concluded u/s 144 of the Act drawing a presumption that the assessee

must be aware of the pending proceedings. Now that the assessee prays

for an opportunity to cooperate with the authorities for determination of the

tax liability. Having a careful regard to the facts and circumstances of the

case, we are of the considered opinion that no prejudice would be caused

to either of the parties if an opportunity is granted to the assessee for

producing the documents if any before the AO for determination of his just

tax liability. With this view of the matter, we find it just and proper to set

aside the issue to the file of the AO for reassessment afresh after giving

an opportunity to the assessee to cooperate with the disposal of the

matter. It is made clear that it is the last opportunity for the assessee to

get the matter disposal on merits. We, accordingly, restore the matter to

the file of the AO.

6 ITA No. 4024/Del/2011

purposes.

Order pronounced in the open court on 23.10.2017

Sd/- Sd/- (G.D. AGRAWAL) (K.N. CHARY) PRESIDENT JUDICIAL MEMBER Dated: 23.10.2017 *Kavita Arora