ABDUL SALAM PAREETHUKUNJU,PUNALUR vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE, KOLLAM, KOLLAM

The assessee filed the return of income on 21.03.2018 declaring total income of Rs.28,88,230/-. The case was selected for scrutiny and statutory notices were issued to the assessee. The assessee is whole sale dealer in ITC Cigarette and IDEA Sim cards. He has also derived interest income. The assessee has himself disallowed 30% of rent and advertisement expenses under Section 40(a)(ia) of the Income Tax Act, 1961 (hereinafter "the Act"). The assessee has reduced profit of Rs.10,21,126/- from his computation under ICDS but he was unable to file any document/working of ICDS during the course of assessment proceedings. Accordingly the AO added the sum to the total income of the assessee. The assessee has also claimed expenses of Rs.23,35,461/- and Rs.,18,40,525/-. As per the AO 2 Shri Abdul Salam Pareethu Kunju the assessee has not filed ledger accounts and its TDS applicability. Accordingly the AO disallowed 30% of the sum and added to the total income of the assessee and he also observed that the assessee could not produce challans for TDS payable of Rs.2,139/- and VAT payable of Rs.2,08,062/-. Accordingly it is added back to the total income of the assessee. Aggrieved by the order of the AO he filed appeal before CIT(A)The learned CIT(A) also dismissed the appeal of the assessee.

The learned A.R. submitted that the Tax Audit Report was revised by the assessee latter on which has also been submitted but it has not been considered. He also filed additional evidence and paper book before us which is placed on record. He also drew our attention to the paper book in which the copies of notice No. ITBA/AST/F/17/2019-20/1020913510(1) dated 22.11.2019 calling for information and against the same assessee filed reply vide letter dated 05.12.2019. He also drew our attention to the acknowledgement of the documents filed in the above two notices dated 22.11.2019 which is available on record and the assessee responded to the notice as required by the AO which is placed on record. He further submitted that all the information were submitted through E-portal but why the AO has mentioned in the order that the assessee has not provided ledger account and other documents and the CIT(A) also ignored the submission which was made before the AO. Therefore, he prayed that the matter may be sent back to the AO for reconsideration.

On the other hand, the learned D.R. relied on the orders of the lower authorities.

After considering the rival submissions and documents produced by the learned A.R. of the assessee and additional evidence which is placed on record and perusal of the information requisitioned by the AO vide questionnaire dated 22.11.2019 we find that the assessee has responded to the queries of the AO. The assessee has also revised the Tax Audit Report. The details are mentioned in the e-proceedings response acknowledgement and these documents go to the root of the matter. Therefore the documents submitted by the assessee are accepted. Since, 3 Shri Abdul Salam Pareethu Kunju while completing the assessment proceedings the AO has not considered the submissions made by the assessee and the CIT(A) has also taken non- cognisance, in the interest of justice we think it fit to send back the file to the AO for de novo adjudication. The assessee is directed to produce material/evidence to substantiate his case. The assessee should be provided reasonable opportunity of hearing. The assessee should not seek unnecessary adjournments for early disposal of the appeal.

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