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Income Tax Appellate Tribunal, LUCKNOW BENCH “SMC”, LUCKNOW
Before: SHRI SUDHANSHU SRIVASTAVA
This appeal has been preferred by the assessee against order dated 02.01.2024 passed by the National Faceless Appeal Centre (NFAC), Delhi for Assessment Year (AY) 2014-15 wherein, the assessee’s appeal has been dismissed in limine for the reason of non compliance.
The brief facts of the case are that the assessee is engaged in the business of taking electrical turnkey contracts. The assessee had filed his return of income on 11.11.2014 declaring total income at Rs.19,05,864/-. The assessee’s case was selected for scrutiny through CASS. Subsequently, the assessment was completed at a total income of Rs.47,10,350/- after making various additions u/s. 143(3) of the Income Tax Act, 1961 (hereinafter called the ‘Act’).
Aggrieved, the assessee preferred an appeal before the NFAC. However, the appeal before the NFAC came to be dismissed on account of non- compliance.
Now, the assessee has approached this Tribunal challenging the action of the NFAC by raising the following grounds of appeal:
“1. BECAUSE, on the facts and in the circumstances of the case, the ex-parte order passed by the Ld. Commissioner of Income Tax (Appeals) Dt. 02.01.2024partly allowing the appeal of the assessee is liable to be set-aside to the extent it upheld the action of assessing officer in making additions to the income of the assessee. The impugned order is non- speaking qua the additions sustained in it. Further the CIT(A) has itself granted substantial appeal in the case of the assessee for A.Y. 2014-15, however has refused relief on same transactions in this year.
2. BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has manifestly erred in fact and in law in failing to appreciate that addition made by AO under Section 41 of the Act, for a sum of Rs 5,92,290/-, concerning Industrial Casting Corporation has been deleted by the CIT(A) while adjudicating the case of the assessee for A.Y. 2013-14 as unsustainable; however a meager addition was confirmed which has been assailed in appeal before this Hon'ble ITAT for that year. Further, in any view the matter, the impugned addition is wholly illegal and bad in law as these transactions have absolutely no bearing on the taxable income of the assessee. It is a discharge of liability of the assessee as appearing in its books of account trough cash or assignment of debt. There is no tax impact and hence there is no occasion to cause any addition on that score and is also resulting in double taxation of same transaction which is impermissible.
3. BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in fact and in law while confirming an addition of Rs. 90,368/-is wholly illegal and bad in law as these transactions have absolutely no bearing on the taxable income of the assessee. It is a discharge of liability of the assessee as appearing in its books of account trough cash. There is no tax impact and hence there is no occasion to cause any addition on this score.
4. BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in fact and in law while confirming an addition of Rs 73,028 & 4,07,000/- on account of cash paid to Alka & Company for Rs. 73,028 and transferring its liability to M/s Neelam Construction [Rs. 4,07,000/-] is wholly illegal and bad in law as these transactions have absolutely no bearing on the taxable income of the assessee. It is a discharge of liability of the assessee as appearing in its books of account trough cash or assignment of debt. There is no tax impact and hence there is no occasion to cause any addition on that score.
BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has grossly erred in confirming an addition of Rs 1,39,500 on account of cash paid by assessee to Technical Power Corporation. The addition is wholly illegal and bad in law as these transactions have absolutely no bearing on the taxable income of the assessee. It is a discharge of liability of the assessee as appearing in its books of account trough cash or assignment of debt. There is no tax impact and hence there is no occasion to cause any addition on that score.
6. BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has grossly erred in confirming an addition of Rs 10,69,723/- on account of credit purchases from Technical Power Corporation. The addition is wholly illegal and bad in law as the assessee was not granted any opportunity to defend its case and findings of a different year have been plastered over assessee, arbitrarily. There is no known law that mere non-service of summon would result in drawing adverse Inference. The assessee was not afforded opportunity to defend its case as no adverse material was confronted and enquiry made behind the back of the assessee has been utilized to sustain the impugned addition.
7. BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law and in facts while sustaining the addition of Rs 57,004 on account of cash paid to Chandra & Company ignoring the fact that this transactions has absolutely no bearing on the taxable income of the assessee. It is a discharge of liability of the assessee as appearing in its books of account trough cash. There is no tax impact and hence there is no occasion to cause any addition on this score.
8. BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law and in facts while sustaining the addition of Rs 5,367 on account of cash paid to Glorious Electricals ignoring the fact that that this transactions has absolutely no bearing on the taxable income of the assessee. It is a discharge of liability of the assessee as appearing in its books of account trough cash. There is no tax impact and hence there is no occasion to cause any addition on this score.
BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in failing to appreciate that the impugned order of assessment is itself bad in law, being barred by limitation and therefore liable to be set-aside and quashed.
BECAUSE, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in law in failing to appreciate that the impugned order of assessment was itself illegal and bad in law as the jurisdictional notice U/s 143(2) of the Income Tax Act has not been issued by the competent officer and in any case the notice U/s 143(2) of the Act is itself time barred rendering the order of assessment bad in law and liable to be quashed.
BECAUSE, on the facts and in the circumstances of the case, the CIT (A) has passed the order without providing the assessee with a due and proper opportunity of hearing and it observes that reply filed by appellant has not been considered by the Ld. Commissioner of Income Tax (Appeals), therefore the impugned order deserves to be set-aside being bad in law. 12. The humble assessee, craves for leave to add/amend any other ground with the prior permission of the Hon'ble Tribunal.” 5. None was present on behalf of the assessee when the appeal was called out for hearing nor was any adjournment sought. Therefore, looking into the facts of the case, I proceed to adjudicate the appeal ex-parte qua the assessee.
Since the order passed by NFAC was an ex-parte order, the ld. Senior D.R. had no objection to the restoration of appeal to the NFAC.
I have heard Senior Departmental Representative and have also perused the material on record. It is evident that there was a complete non compliance on the part of the assessee during the course of first appellate proceedings. However, looking into the facts of this case, I am of the considered view that the assessee deserves one more opportunity to present his case and, therefore, in the interest of substantial justice, I restore this file to the Office of the NFAC with the direction to provide one more opportunity to the assessee to present his case and I also caution the assessee to fully comply with the directions of the NFAC in the set-aside proceedings when called upon to do so, failing which, the NFAC shall be at complete liberty to pass the order in accordance with law, based on material available on record even if it is ex-parte qua the assessee.
In the result, the appeal of the assessee stands allowed for statistical purposes.