The Visakhapatnam Bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter of business income estimation for reconsideration citing the assessee’s failure to appear before the Commissioner of Income Tax (Appeals) due to genuine health issues.
Ratna Kumari Koppisetty, the assessee is an individual engaged in the kerosene dealership business in Kakinada, Andhra Pradesh. The assessee’s dealership supplies kerosene to ration depot dealers as per government-regulated pricing.
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The assessee filed an income tax return for the assessment year 2017-18 declaring Rs. 4,15,270 under “Income from house property” and “Other sources” and Agricultural income of Rs. 45,000. The case was chosen for limited scrutiny under CASS to verify sources for cash deposits during the demonetization period (FY 2016-17).
The assessee deposited Rs. 14.69 lakhs in the Union Bank account, and Rs. 1,07,91,150 in the Andhra Bank Account, a total of Rs. 1,22,60,150. The assessee explained it was from kerosene sales but the assessing officer observed that the assessee failed to explain cash deposits with detailed records or evidence.
In the end, the assessing officer assessed the total income from the gross profit of the business estimated at 8% resulting in Rs. 14,02,250 including Rs. 3,14,470 declared under “Other sources”.
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Aggrieved, the assessee appealed before the Commissioner of Income Tax (Appeals) but due to non-appearance, the appeal was exparte in favor of the assessing officer. Then, the assessee again appealed before the ITAT and submitted the cause for the non-appearance.
The assessee explained that due to miscommunication with the consultant and health issues. The assessee was unaware of the CIT(A)’s order until contacted by the department regarding arrears.
A single bench led by Duvvuru RL Reddy, the Judicial Member noted that the assessee failed to appear or comply with the notices issued during the appellate proceedings before the CIT(A). The tribunal considered the health challenges as a vailed point and found it justifiable to provide one more opportunity for the assessee to be heard.
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The tribunal remanded the matter back to the CIT(A) for reconsideration. The tribunal asked the assessee to fully cooperate this time. The appeal of the assessee was allowed for statistical purposes.
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