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Facts
The assessee did not file their return of income for AY 2013-14. The AO reopened the case, believing income had escaped assessment based on information about rental income received. The AO passed a best judgment assessment order, and the CIT(A) upheld it due to the assessee's non-compliance.
Held
The Tribunal noted the assessee's delay in filing the appeal and condoned it. While the lower authorities upheld the assessment due to non-compliance, the Tribunal, considering principles of natural justice, decided to give the assessee one more opportunity.
Key Issues
Whether the assessee should be granted another opportunity to present their case before the AO for de novo assessment, despite past non-compliance.
Sections Cited
250, 148, 147, 144, 144B, 234A, 234B, 271(1)(c)
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Income Tax Appellate Tribunal, “J(SMC
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the ex parte order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2013-14.
During the appellate proceedings, it was observed that the appeal has been filed by the assessee with a delay of 44 days for which the assessee has filed an Affidavit briefing the reason for the said delay. Upon perusal of the same, we deem it fit to condone the said delay. Delay condoned.
The assessee has raised the following grounds of appeal:
(A.Y. 2013-14) Sanjay Subhash Yerunkar vs. ITO 1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming addition of Rs.1751370 as Rent Income from Immovable property after allowing the 30% standard deduction on gross receipt of Rs.2501960, without considering the fact the receipt is on account of running buses on hire and in that business profit is not more than 10% of gross receipt 2. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to give direction to Ld.AO for allowing the credit of TDS of Rs.50039 deducted on Bus Running on hire 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming charging of Interest under section 234A, 234B of Income Tax Act, 1961 4. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming initiation of penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961
The brief facts are that the assessee is an individual and had not filed his return of income for the year under consideration. The ld. Assessing Officer ('A.O.' for short) reopened the assessee’s case vide notice u/s. 148 of the Act dated 27.03.2021 for the reason that information was received that the assessee has received rental income amounting to Rs.25,01,960/- but had not filed his return of income, thereby on the belief that income has escaped assessment. The assessee has been non-compliant throughout the assessment proceeding and the ld. A.O. then passed the assessment order u/s. 147 r.w.s 144 r.w.s. 144B of the Act dated 07.03.2022, being the best judgment assessment, determining the total income at Rs.17,51,370/-, making an addition on the impugned amount after allowing deduction of Rs.7,50,588/- @ 30% of the annual value on the alleged total rent received by the assessee during the year under consideration.
Aggrieved the assessee was in appeal before the first appellate authority, challenging the assessment order.
The ld. CIT(A) vide order dated 17.05.2024, upheld the order of the ld.A.O. for the reason that inspite of several opportunity the assessee has failed to substantiate his claim and has been non compliant throughout the appellate proceedings.
CIT(A).
We have heard the rival submissions and perused the materials available on record. The ld. A.O. observed that the assessee has received rental income amounting to Rs.25,01,960/- for which TDS has been deducted by M/s. Hindustan Construction Co.
Ltd. as reflected in Form 26AS of the assessee for the year under consideration. The ld. A.O. made an addition on the said amount after deducting 30% of the annual value which aggregates to Rs.7,50,588/- and the assessee has challenged the additions made by the ld. A.O. before the first appellate authority but has been non-compliant before the lower authorities.
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee has got a good case on the merits and prayed that the assessee may be given one more opportunity to present his case before the ld. CIT(A).
The learned Departmental Representative ('ld.DR' for short) vehemently opposed to setting aside the issue to the file of the lower authorities for the reason that the assessee was given several opportunity by the ld.A.O. and the ld. CIT(A) which was not availed by the assessee.
On the above factual matrix of the case, we are of the considered view that the assessee may be given one more opportunity to present his case before the ld. A.O. by adhering to the principles of natural justice. We, therefore, remand all these issues back to the file of the ld. A.O. for de novo assessment. The assessee is directed to comply with sufficient opportunity of hearing is to be given to the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 30.10.2024.