What did the Tribunal hold?

The Tribunal held that the assessee was not given adequate opportunity to be heard and produce documents. Therefore, the case was restored to the AO for fresh adjudication after providing a proper hearing.

The Assessing Officer (AO) added Rs. 41,50,242/- as suppressed income because the assessee failed to produce documents for gross collections of Rs. 1,35,02,430/-. The assessee declared gross collections of Rs. 93,52,188/-. The CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether the assessee was provided with adequate opportunity to present evidence regarding suppressed income. Whether the addition made by the AO was justified without proper documentation and hearing.

Rama Chandra Mallick, Jajpur vs ITO | ITAT Cuttack 2017

Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK

Before: SHRI N.S. SAINI & SHRI KULDIP SINGH

For Appellant: Shri D.K. Sheth, AR

For Respondent: Shri A. Tigga, DR

Hearing: 27.04.2017Pronounced: 27.04.2017

PER KULDIP SINGH, JUDICIAL MEMBER : The Appellant, Kuni Samantray (hereinafter referred to as

‘the assessee’) by filing the aforesaid appeal sought to set aside the

order dated 29.01.2015 passed by the Commissioner of Income-tax

(Appeals), Cuttack qua the assessment year 2013-14 on the

grounds inter alia that :-

“1. For that under the facts and circumstances of the case the addition of Rs.41,50,242/- under head “Income Suppressed” as made is arbitrary uncalled for and unjustified.

ITA No.144/CTK./2014 2

For that the learned AO should have given proper opportunity to explain the queries raised by him.

For that the alleged suppress income as calculated is also improper.

For that the learned Commissioner is wholly unjustified to confirm the assessment and to dismiss the appeal.

For that the learned Commissioner failed to appreciate the contentions furnished by the appellant.”

Briefly stated the facts necessary for adjudication of the

controversy at hand are : Assessing Officer made an addition of

Rs.41,50,242/- on account of deliberately suppressed income on

the ground that the assessee has failed to produce relevant

documents / bank statement regarding gross collection of

Rs.1,35,02,430/-.

Assessee carried the matter by way of filing an appeal before

the ld. CIT (A) who has dismissed the appeal. Feeling aggrieved,

the assessee has come up before the Tribunal by filing the present

appeal.

We have heard the ld. Authorized Representatives of the

parties to the appeal, gone through the documents relied upon and

orders passed by the revenue authorities below in the light of the

facts and circumstances of the case.

ITA No.144/CTK./2014 3

Undisputedly, the assessee has declared gross collection of

Rs.93,52,188/- with net income of Rs.13,18,540/-. Assessee

claimed TDS of Rs.14,04,066/- in the return of income. However,

AO noticed a sum of Rs.1,35,02,430/- having been credited in the

name of the assessee by IL&FS Ecosmart Ltd., (TAN

DEL106904C), D – 64, Defence Colony, New Delhi – 110 024.

AO tried to get the confirmation from IL&FS Ecosmart Ltd. but

received no reply. AO, during assessment proceedings, issued a

detailed show-cause notice to the assessee which is reproduced as

under for ready reference :-

"In course of assessment proceedings U/s. 143(3) of the I.T. Act, 1961, for the assessment year 2011-12, it is found that as per your return of income you declared gross receipt of Rs.93,52, 188/-, Net income Rs.13,18,540/-, T.D.S. Rs.14,04,066/- with a claim of refund of Rs.11,47,020/-. As per audited report, the assessee had been maintaining books of account in mercantile system. Your gross income shows Rs.93,52,188/-, Net income Rs.13,18,540/- as per audit report. On examination of T.D.S. Certificate filed by your A/R issued by IL & FS Ecosmart Limited, D-64, Defence Colony, New Delhi-I 10024, it is seen the assessee received as below:

Sl. Period Amount Amount of Date of No. paid TDS credit 1. 01.04.2010 to 53,82,271 5,92,049 30.04.2010 30.06.2010 2. 01.07.2010 to 13,56,928 1,35,693 04.08.2010 30.09.2010 3. 01.01.2011 to 37,64,921 3,76,493 23.03.2011 31.03.2011 Total 1,05,04,120 11,04,235

TDS Certificate for the period from 01.10.2010 to 31.12.2010 not produced.

ITA No.144/CTK./2014 4

But as per TDS statement 26 AS, it is found you received a sum of Rs.l,35,02,430/- from the period from 01.04.2010 to 31.03.2010 with deduction of tax source u/s. 194J of Rs.14,04,066/- which you claimed in your return of income. From the above fact and findings ( it is seen the actual T.D.S. made by I.L. & F.S. Ecosmart Ltd., TAN: DEL106904), it is clear that you got credit/received of Rs.1,35,02,430/- with TDS of Rs.14,04,066/- u/s 194J as for consultancy job, you declared gross receipt of Rs.93,52,188/- in your return of income with the claim of T.D.S. of Rs.14,04,066/-. As you maintain books of account, as per Mercantile System, as per audit report, you failed to produce the relevant documents/ bank statement regarding gross collection of Rs.1,35,02,430/-, you are asked to show cause why the amount of Rs.41,50,242/- (1,35,02,430 - 93,52,188 ) shall not be treated as suppressed income and added to net profit. Your reply should reach to the undersigned within 10 days from the date of receipt of this letter."

However, the assessee has failed to bring on record any

documentary evidence to support her claim.

Now, the ld. AR for the assessee contended that the ld. AO

has not given adequate opportunity of being heard to the assessee

to produce all the documents including confirmation from IL&FS

Ecosmart Ltd.. Since the books of accounts are being maintained

by the assessee in due course of business and having not been

rejected by the AO, we are of the considered view that adequate

opportunity of being heard is required to be provided to the

assessee. Even ld. DR has not raised any objection for granting

fresh opportunity to the assessee.

ITA No.144/CTK./2014 5

In view of what has been discussed above, present appeal

filed by the assessee is allowed for statistical purposes and

impugned order passed by the ld. CIT (A) is set aside and file is

restored to the AO to decide afresh after providing an opportunity

of being heard to the assessee. Order pronounced in open court on this 27th day of April, 2017 after the conclusion of the hearing.

Sd/- sd/- (N.S. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated the 27th day of May, 2017 TS

Copy of the order forwarded to: 1.Appellant - Kuni Samantray, 413 B/1, Mangla Sahi, Alisha Bazar, Cuttack – 753 002. 2.Respondent - ITO, Ward 2 (4), Cuttack. 3.CIT, Cuttack 4.CIT (A), Cuttack. 5.DR(ITAT), Cuttack. 6.Guard File //True Copy//

BY ORDER

SR. PRIVATE SECRETARY, ITAT, CUTTACK

RAMA CHANDRA MALLICK,JAJPUR vs. ITO, CUTTACK

What did the Tribunal hold?

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