Loading judgment…
Facts
The assessee firm, engaged in providing man power facility and services, faced partner disputes leading to non-filing of returns and inadequate attention to tax proceedings. A notice under section 148 was issued, which remained uncomplied with. The Assessing Officer (AO) noted gross receipts of Rs. 1,02,82,949/- from the 26AS statement and estimated profit at 6.5%, making an addition of Rs. 7,15,581/- for AY 2015-16.
Held
The Tribunal acknowledged the partner disputes as a reason for non-compliance and granted the assessee one last opportunity to present their case. The assessment order of the AO and the appellate order of the CIT(A) were set aside and the matter was restored to the AO for fresh assessment (de novo).
Key Issues
Whether the assessee's non-compliance with tax notices and proceedings, due to internal partner disputes, warrants a de novo assessment with an opportunity to present evidence.
Sections Cited
Sec 250, Sec 144, Sec 147, Sec 148, Sec 249 ITR 216
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T VARKEY & SHRI AMITABH SHUKLA
आदेश / O R D E R PER AMITABH SHUKLA, A.M : This three appeals are filed against the order bearing DIN & Order No.ITBA/NFAC/S/250/2023-24/1062974753(1), No.ITBA/NFAC/S/250/2023-24/1062974458(1) and No.ITBA/NFAC/S/250/2023-24/1062975629(1) dated 20.03.2024 of the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2015- , 1476 & 1477 /Chny/2024 :- 2 -:
16, 2016-17, 2017-18. Through the aforesaid appeal the assesse has challenged order u/s 250 dated 20.03.2024, passed by NFAC, Delhi.
2.0 All the above three appeals are having common issues centering around order u/s 144/147 passed by the AO and their corresponding confirmation by the Ld.CIT(A). The issues being identical are accordingly disposed off by this common order. AY-2015-16 covered by is being disposed off as lead year.
3.0 At the outset, the Ld.AR of the assesse informed that the assesse firm, dealing in the business of providing man power facility and services, was having some disputes and personal animosities amongst the partners leading to non-filing of return as well as inadequate attention to income tax proceedings. It was submitted that this was the primary reason for non-compliance before the Ld.AO and the first appellate authority. The Ld.AR informed that for the year under consideration notice u/s 148 was issued on 14.03.2019 which remained uncomplied by the assesse. The Ld.AO noted from 26AS statement gross receipts of the firm amounting to Rs.1,02,82,949/-. In the absence of any compliance by the assesse, the Ld.AO proceeded to apply an estimated profit @ 6.5% and consequently made an addition of Rs.7,15,581/- pertaining to AY- , 1476 & 1477 /Chny/2024 :- 3 -:
2015-16. In the background of submissions qua disputes and bickerings amongst partners, request was made, by the Ld.AR, to set aside the matter to the Ld.AO for reconsideration. The Ld.AR assured that full cooperation would be rendered to the AO in terms of compliance to all his notices and production of required evidences.
4.0 The Ld.DR concurred to the proposal but requested for levy of cost upon the assesse for wasting precious judicial time.
5.0 We are of the view that ends of justice would be met if the assesse is given one last opportunity to present its case and filed supporting evidences before the Ld.AO. The assessment order of the Ld.AO and the appellate order passed by the first appellate authority are therefore set aside. Accordingly, placing reliance upon the decision in the case of TIN box 249 ITR 216 the matter is restored to the file of the AO for assessment de novo. The assesse is directed to make complete and correct compliance towards the notices issued by the AO. Needless to say that the AO will allow reasonable opportunity of being heard to the assesse.
, 1476 & 1477 /Chny/2024 :- 4 -:
6.0 We noted that the assesse was provided many opportunities by both the authorities below but assesse did not avail the opportunities but in the interest of natural justice, we are of the view that to do substantial justice one more opportunity be provided to the assesse to represent the true and clear facts before the AO and hence, we have set aside the orders of the lower authorities i.e., the AO and the CIT(A) and remand the matter back to the file of the AO. The said remission is however subject to the assesse paying a cost of Rs.5000/- to be paid to the Tamil Nadu State Legal Services Authority at Hon’ble High Court of Madras on or before 20.09.2024. The assesse will pay this cost and produce the receipt before the AO. 7.0 The grounds of appeal raised by the assesse partly allowed for statistical purposes.
& 1477/Chny/2024 - Assessment Years: 2016-17 & 2017-18 8.0 As stated above, the facts of the case for the above mentioned & 1477 are identical and hence, the decision taken above in respect of for AY-2015-16 shall apply for these AYs-2016- 17 & 2017-18 also.
, 1476 & 1477 /Chny/2024 :- 5 -:
9.0 In the result the grounds of appeal raised by the assesse are partly allowed for statistical purposes. Order pronounced on 21st August, 2024 at Chennai.