MANIGA JEWELLERY ,COIMBATORE vs. ACIT NON CORPORATE CIRCLE 2 , COIMBATORE

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 2, Coimbatore, dated 31.03.2017 relevant to the assessment year 2012-13. Besides raising various grounds in the grounds of appeal, the ld. Counsel for the assessee mainly argued that the assessee was not given sufficient opportunity to produce its books and estimation of income on presumption, the assessment order passed under section 143(3) r.w.s. 144 of the Income Tax Act, 1961 [“Act” in short] is bad in law and prayed for quashing the same.

Brief facts of the case are that the assessee is engaged in trading in diamond and gold jewellery and filed its return on 23.09.2012 admitting income of ₹.10,68,710/-. The return filed by the assessee was processed under section 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny and notices under section 143(2) of the Act was issued and served by affixture in the assessee’s premises in the presence of two witnesses. Against the notice under section 143(2) of the Act, there was no response from the assessee. As per information available from the assessment records of assessment year 2011-12, the Assessing Officer observed that one of the partners of the firm Shri Anand has demised and the AR of the assessee for the assessment year 2011-12 stated that the books of accounts are not available with him and whereabouts of other partner of the firm was also not known and no one is available in the assessee firm’s premises. Notice under section 142(1) of the Act was send to the assessee calling for information, but the same returned back. Since there was no representation from assessee’s side or any books were produced, the Assessing Officer estimated the income of the assessee at 10% of the turnover and the difference of ₹.2,58,704/- was brought to tax. On appeal, the ld. CIT(A) confirmed the addition.

On being aggrieved, the assessee is in appeal before the Tribunal. By reiterating the submissions as made before the ld. CIT(A), the ld. Counsel for the assessee submitted that the assessee has filed the tax audit report under section 44AB of the Act along with the return of income. The assessee has discontinued the business following the death of the male partner and the other partner being his wife was not aware of the proceedings, the Assessing Officer was not legally justified in doubting the accounts when the tax audit report under section 44AB of the Act was filed and pleaded that the addition made on estimated basis should be deleted or may be given one more opportunity of being heard to the assessee to produce the books of accounts, etc. On the other hand, the ld. DR has submitted that the assessee may be given one more opportunity of being heard to file all details as called for.

We have heard both sides, perused the materials available on record and gone through the orders of authorities below. It is a fact that the male partner of the assessee firm is no more and filing of tax audit report under section 44AB of the Act along with the return filed by the assessee was not in dispute. Since complete details of books of accounts, bills, invoices, etc. were not produced by the assessee, the Assessing Officer estimated the income of the assessee and the difference was brought to tax. Since both the parties have pleaded that one more opportunity may be given to the assessee, we remit the matter back to the file of the Assessing Officer to decide the issue afresh and also direct the assessee to furnish complete details of books of account, bills, invoices, vouchers, etc. for verification.

In the result, the appeal filed by the assessee is allowed for statistical purposes.