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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: SH. ANIL CHATURVEDI & SH. ANUBHAV SHARMA
The appellant has come in appeals against the order dated 16.08.2022 passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) [in short ‘Ld. CIT(A), NFAC’] u/s 250 of the Income Tax Act, 1961 (hereinafter referred as “the Act”) being Appeal Nos. NFAC/2014-15/10065698 against order AO U/s 147/144 of the Act, NFAC/2014-15/10067144 against order , 2365 & 2366/Del/2022 Shakeel Ahmad vs. ITO 2 AO U/s 271(1)(b) of the Act & NFAC/2014-15/10066423 against order AO U/s 271(1)(c) of the Act, pertaining to Assessment Year 2015-16.
The grounds raised
in appeals are common and are reproduced for convenience and for understanding the issue : “1. That the appellant is an individual with little education, and is not having access to the computer system. The appellant is small time trader of raw meat of animal and animal horns and operate in small town and remote villages with no banking facilities or little banking facilities.
2. That the appellant has never received any notice under section 148 and 142(1), consequently the appellant was not able to attend the same and was not able to reply the same with facts and figures, the appellant came to know about income tax proceedings pertaining to assessment year 2015-16 only on receipt of demand notice.
3. Since the total income of the appellant during A.Y 2015-16 was below taxable limit, the appellant has not filed income tax return. However, from A.Y 2020-21 on ward, the appellant has started filing the Income tax returns:
4. That the appellant was withdrawing the cash through bank only for the purpose of payment to his suppliers and surplus cash is being deposited in his bank account being maintained with Axis Bank.
5. That the appellant was not provided any opportunity of being heard physically and to present his matter before the assessing officer and before the appellate authorities and appeal was decided without any report through the assessing officer. The order passed by the appellate authority dated 16th August 2022 also mentioned that “The Assessing Officer's report in ITNS -51 has not been received in this case"
6. The Appellant is in the business of Raw Meat of animals and Animals horn in an interior area small town where banking facilities and internet facilities are not much available. The Appellant is also not educated and not using computer for his business activities, hence the Appellant must be given one more opportunity of being heard on the ground of natural justice. The Appellant request you to remand the case to Assessing Officer for the natural justice.
7. The benefit of cash transactions under Rule 6DD(e) clause (ii) of the income tax Rules 1961 and circular No. 4/2006 of CBDT dated 29.03.2006 which had been subsequently clarified by CBDT applicable Circular no. 8/2006 dated 06.10.2006 is also available to the appellant.
8. There is violation of principles of natural justice, since he was not educated and computer savvy and no access to the computer system. The judgment of Kolkata bench of Income tax Tribunal squarely applied to the appellant (Ref- Blackberry Tradecom Pvt. Ltd Vs ITO (ITA no. 1792/Kol/2017). , 2365 & 2366/Del/2022 Shakeel Ahmad vs. ITO 3
9. That the appellant craves leave to add, amend, or alter any ground of appeal.”
3. Heard and perused the record. It comes up that apart from grounds on merits assessee has raised Ground No.5 with regard to fact that the assessee was not provided any opportunity of being heard by Learned AO, which NFAC has also failed to consider. It is submitted that the assessee is an individual and was not given due representation by authorized representative. Learned DR however resisted the argument by submitting that the details of tax consultant have not been provided and general excuse has been made.
4 It can be appreciated from the record that in regard to deposit of Rs. 86,92,096/- to the bank account at Sambhal in Uttar Pradesh, the assessee’s case was reopened. The assessee is a trader of raw meat and animal horns. He has claimed that he operates in small town and remote villages with no banking facilities so deals in cash. As before Learned AO, where assessee failed to respond the assessment was completed u/s 147 r.w.s 144. Then before NFAC the assessee has taken a plea that all required information was given to the tax consultant who failed to represent. However, NFAC did not appreciate the plea and in the absence of sufficient material on merits declined to interfere.
It is observed from the order of the NFAC that it is not clear as to when and what opportunity of hearing was given to assessee. NFAC has failed to take into consideration that assessee is a small town trader. It is not justified to apply strict rules of procedure and raise presumption and attributing knowledge when such small town assessee raises a plea of inadequate representation of the case before the tax authority by his authorised representative. In such cases Tax authorities, being quasi judicial authorities should be lenient towards strict rules of procedure and proactive with regard to reasonable opportunity of hearing, including personal hearing, even by electronic means and ensure such small town assessee can bring forth the case on , 2365 & 2366/Del/2022 Shakeel Ahmad vs. ITO 4 merit. Ld. AR appearing has ensured the Bench that in case issue is remitted for rehearing he takes responsibility to ensure filing all the relevant material before the NFAC. Thus orders of NFAC deserve to be interfered and for the ends of justice issue on merits need to be re-determined by giving opportunity of hearing to the assessee.
The issues on merit are restored to NFAC to decide the issue afresh after giving opportunity of hearing to the assessee. As the Ld. AR for the assessee has ensured due representation of the assessee before Ld. CIT(A) he be also informed of the notices of hearing NFAC, at his email rajurastogiadv@gmail.com. The appeals are allowed for statistical purposes.