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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K & SHRI LAXMI PRASAD SAHU
O R D E R
Per Laxmi Prasad Sahu, Accountant Member :
1. This is an appeal filed by the assesseeagainst the order passed by the National Faceless Appeal Centre (NFAC), Delhi, (DIN & Order No. ITBA/NFAC/S/250/2023-24/1059951360(1)) dated 19.01.2024, on the following grounds of appeal:
The order of the National Faceless Appeal Centre (NFAC), Delhi, is opposed to law and facts of the case.
The Hon'ble NFAC was obliged to decide all the grounds of appeal
raised and urged before the appellate authority.
3. The impugned order of the Hon'ble NFAC suffers from perversity.
4. The Hon'ble NFAC ought to have held that the assumption of jurisdiction u/s 147/ 148 of the Act by the assessing officer is bad in law.
5. The Hon'ble NFAC ought to have appreciated that the initiation of proceedings u/s 148 are barred by limitation.
6. The Hon'ble NFAC ought to have held that the action of the assessing officer in treating the Return of Income filed by the Appellant as non-est is bad in law. 7. The Hon'ble NFAC ought to have held that an addition of Rs.1,50,95,019/- as undisclosed income is bad in law. 8. The Hon'ble NFAC ought to have held that the provisions of Section 69A of the Act are not applicable in the facts of the case. 9. The Hon'ble NFAC ought to have held that an addition of Rs.2,77,750/- is bad in law. 10.Alternatively and without prejudice the Hon'ble NFAC ought to have directed the assessing officer to estimate gross profit at a reasonable rate on the aggregate sales of Rs.1,53,72,769/-. 11.The Appellant craves for leave to add to, delete from or amend the grounds of appeal.
2. The brief facts of the case are that assessee filed return of income on 17.11.2014 declaring income of Rs.4,28,410/-. As per the information available, assessee had deposited Rs.1,50,95,019/- in cash in his savings bank account during the year and the cash deposited is not commensurate with the income by the assessee. Accordingly, the case was reopened by issue of notice under sections 147/148 of the Act. In compliance, assessee filed return of income on 13.12.2020 declaring income of Rs.7,06,160/-. Subsequently, other statutory notices were issued to the assessee. During the course of reassessment proceedings, the AO observed that assessee has increased total sales of Rs.1,53,72,769/- whereas the same was disclosed as Rs. 9,30,05,110/- in the original return filed u/s 139(1) of the Act. . The AO observed from the sales register provided by the assessee that the sales were between Rs.19,200/- and Rs.19,800/- for the year under consideration and noted that considering the nature of the business of the assessee, it is not possible that the sales shown by the assessee in the sales register as genuine as assessee’s cash transaction of Rs.20,000/- or above will be disallowed and assessee has fabricated the sales register to mislead the tax authorities. Assessee was also asked to produce name, address and PAN of the parties from whom the assesseehad made purchase during the year but the assessee did not produce the same. Assessee was granted ample opportunities but assessee did not produce details in light of questionnaire issued by the AO. Accordingly, after giving one more opportunity to the assessee show case notice dated 24.03.2022 was issued to the assessee but assessee did not reply to the same. Accordingly, the AO completed the assessment and made addition under section 69 of the Act to the extent of Rs.1,50,95,019/-.
3. Aggrieved from the above order, assessee filed appeal before the First Appellate Authority (FAA). The CIT(A),at para 5.1.1,noted the submissions made before the AO on 05.01.2022, which is as under:
“ I have been carrying on kirana goods business in wholesale basis for last many years. During the year under consideration I have deposited cash of Rs 1,50,95,019/- into Shri Gurubasava Urban Credit Souharda Co-op Ltd Vijayapur are out of credit purchase and cash sale of Kirana goods. The said turnover of Rs 1,53,72,769/- has been declared in revised return of income and paid due tax and percentage of gross profit declared as per original return of income.”
The CIT(A) noted that assessee has not explained the source of cash deposit of Rs.1,50,95,019/- and he confirmed the order of the AO.
Aggrieved from the above order, assessee filed appeal before the ITAT.
The learned AR of the assessee submitted that documents submitted have not been considered properly by both the Revenue authorities. She also reiterated the written submissions made before the lower authorities. During the course of assessment proceedings, purchase and sales registers and cash book were submitted. The AO has not disputed the regular books of accounts and has noted that the transactions have been recorded in the books of accounts and the AO has wrongly applied section 69A of the Act. Assessee has deposited cash of Rs.2,43,36,520/- into Shri Gurubasava Urban Credit Souharda Co-op Ltd., which is the sales proceeds of kirana goods and it is gross sales and cannot represent income. She further undertook that if a chance is given to the assessee for proving the purchase and sales, the assesseewill be able to substantiate his case,and she requested that the matter may be sent to the AO for fresh consideration.
Learned DR relied on the order of the lower authorities.
Considering the rival submissions, we note that during the reassessment proceedings, the Revenue authorities observed that the sales figures shown in the original return filed under section 139(1) of the Act and return filed in pursuance to the notice issued under section 147/148 of the Act, the assessee has shown excess turnover of Rs.1,53,72,769/-. The AO noted that the assessee has shown cash sales below Rs. 20,000 to cover up the increased sales of Rs. 1,53,72,769/- and the complete purchase details as required were not provided. During the reassessment proceedings, assessee submitted copy of purchases register, sales register and cash book and the acknowledgment was attached along with written submissions to the FAA. However, the lower authorities have noted that assessee has not produced complete details of the parties from whom the goods were purchased, detail of parties to whom goods were sold and they have noted that cash sales are not genuine. During the course of hearing, the learned AR of the assessee undertook that the assessee will be able to produce the necessary documents as required by the Revenue authorities.
Considering the totality of facts and circumstances of the case and in the interest of justice, we remit the issue back to the file of the AO for fresh consideration and decide the issue as per law after giving reasonable opportunity of being heard to the assessee. The assessee is directed to produce necessary documents in support of his case and not seek unnecessary adjournments for early disposal of the case.
In the result, appeal of the assessee is allowed for statistical purposes.