SUBHASH CHANDER PROP. MS ASHOKA METALS AND CHEMICALS 457 NIRANKARI STREET NO.1 MILLER GANJ, LUDHIANA,PUNJAB vs. THE INCOME TAX OFFICER WARD-IV(2) LUDHIANA , PUNJAB

1. That the Ld. CIT(A), NFAC, Delhi has erred in confirming the order of the Assessing Officer in reopening of the case u/s 148 and, thereby, making an addition of Rs. 75,96,176/- as made by the Assessing Officer by applying the gross profit of 0.92% on the total receipts of Rs. 82,56,71,331/-.

That no notice of hearing was received from the CIT(A), NFAC in a physical mode and all the notices of hearing were sent through digital mode, which were not accessed by the assessee, since the business of the firm had closed as on 31.03.2016 and PAN card was also surrendered by the assessee on 12.06.2018 and it was intimated to the concerned Assessing Officer as well. 3. That the original assessment was framed by the Assessing Officer vide order, dated 30.06.2016 after due application of mind arid, in which, all such details of purchases and sales had been duly filed and, thus, the reopening of the case is merely on change of opinion, which is not permitted as per law in view of the judgment of Apex Court in the case of Kelvinator of India, reported in 320 ITR 561 That even otherwise since the appellant had closed down his business as 4. on 31.03.2016 and also no person was there to look after the business premises as staff/accountant, who had been looking after the accounting work and other jobs of the assessee had left and the assessee being illiterate did not have any knowledge of the digital data. Notwithstanding, the above said ground of appeal

During the course of hearing, the ld AR submitted that this is a case of an assessee who is doing the business of trading of Chemicals iron and metals. It was submitted that the original assessment has been completed under section 143(3) of the Income Tax Act, 1961 vide order dated 30.08.2016. The case was thereafter reopened under section 147 of the I.T Act, 1961 by issuing notice u/s 148 of the Act on 28.03.2019. It was submitted that the business of the assessee was closed in the year 2018 due to the ill health of the assessee and the assessee had not received any notice for hearing in physical manner and, as such, the assessment has been completed under section 144 r.w.s 147 of the Income Tax Act, 1961 vide order dated 27.12.2019.

It was submitted that the AO has made the assessment as per information received from the office of Excise and Taxation Commissioner, Patiala with regard to bogus purchase from cancelled dealers who were engaged in the business of iron and steel and had no stock of non-ferrous metal etc. The AO had applied the G.P @0.92% on the gross sales of Rs 82,56,7,1331/- and made the additions of Rs. 75,96,176/-. 5. It was submitted that being aggrieved by the order of the AO, the assessee's counsel namely Sh. Vijay Bajaj has filed an appeal before Worthy CIT(A) NFAC Delhi on 27.01.2020. While filing the appeal, the counsel of the assessee has registered his own mobile number and email id i.e. baiajadvocate1@gmail.com and vkbajajadvocate@yahoo.co.in on the prescribed Form No.35 as well as profile of the appellant in the income tax portal as per copy of the extract of income tax portal of the appellant which is part of the paper book at page no.1 to 2. It was submitted that subsequent thereto, the appeal was fixed and the various notices for hearing have been sent by the ld CIT(A) NFAC Delhi on the emails of his counsel vkbajaiadvocate@yahoo.co.in as per copy of the notices for hearing is part of the paper book as page no.3 to 5. It was submitted that the counsel of the appellant has submitted the response against the last two notices as issued by the ld CIT(A) NFAC Delhi as per the acknowledgement of responses is attached with the paper book at page No. 6 to 7 and requested for adjournment. It was submitted that except that the counsel of the assessee had neither intimated to the appellant nor submitted any response to the notices of the worthy CIT(A)

The ld DR is heard who has submitted that there was no effective compliance on part of the assessee/Counsel before the ld CIT(A) and the assessee cannot plead ignorance of the proceedings and need to be diligent enough and cannot take refuge by stating that he has appointed the Counsel and the Counsel has not taken appropriate action. At the same time, it was fairly submitted that since there are no findings on merits of the case, the Revenue has no objection where the matter is set-aside to the file of the ld CIT(A) to adjudicate the same on merits.

We have heard the rival contentions and purused the material available on record. Considering the facts and circumstances of the case and taking into consideration ill health of the assessee and other surrounding circumstances in terms of closure of the business as so claimed, we believe that the assessee deserve one more opportunity to represent his case before the ld CIT(A) as admittedly, there is no finding on merits of the case which has been recorded by him. In the result, the matter is set-aside to the file of the ld CIT(A) to decide the same afresh on merits of the case as per law after providing reasonable opportunity to the assessee. Needless to say, the assessee shall cooperate in the proceedings before the ld CIT(A) and would be at liberty to file necessary submissions/documentation as so advised which shall be considered by the ld CIT(A) as per law.

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