The Income Tax Appellate Tribunal ( ITAT ), Hyderabad Bench, has recently, in an appeal filed before it, imposed a cost of Rs 10,000, on non-compliance of notices and non-furnishing of evidence, even after five opportunities granted by the AO.
The aforesaid imposition of cost was made by the Hyderabad ITAT, when an appeal was preferred before it by the assessee, Union Petrol Service, Hyderabad, as against the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre ( NFAC ), Delhi.
The grounds of the assessee’s appeal being that the order of the Commissioner of Income Tax (Appeals) ,is against the law, weight of evidence and probabilities of case. , that the Commissioner erred in confirming the order of the Assessing Officer wherein, the credits amounting to Rs.7,56,98,381/- in the bank account of individual are considered as income of the firm whereas, the proprietary concern admitted a turnover of Rs.8,82,12,007/-from sale of petroleum products and had filed return of income u/s 139(1), and further that the Commissioner ought to have accorded one more opportunity by sending the notice by way of other than email and therefore, erred in confirming the order of the Assessing Officer in which income is assessed at Rs.7,56,98,381 , the brief facts of the case were that the Assessing Officer had made an assessment by invoking provisions u/s 144 of the Income Tax Act, as theassesseehad failed to furnish the return of income for A.Y. 2017-18 despite the receipt of the notice issued u/s 142(1) of the Income Tax Act.
The Assessing Officer, having given several opportunities to the assessee as discernible from Para 5 of his order, wherein as many as five opportunities had been granted by the Assessing Officer, still found that the assessee had failed to file any reply to the said notices. And, under the said circumstances, he made an addition of Rs.7,56,98,381/-, to the income of the assessee, being the cash deposited during the demonetization period in the bank account.
Feeling aggrieved by the order passed by the assessing officer, the assessee filed an appeal before the CIT(A), who noticed that assessee had not complied with the notices issued by the NFAC, Delhi as mentioned in Para 5 of the order, and further that the assessee had failed to provide any reasons best known to him,for the noncompliance of notices as well as for not furnishing any evidence before the 1st appellate authority.
In view of the above, the CIT(A) confirmed the addition made by the Assessing Officer. And, it is being aggrieved by the same, that the assessee has preferred the instant appeal before the Hyderabad ITAT.
With Shri Mohd. Afzal, Advocate , the AR of the assessee having submitted that the assessee could not appear before the lower authorities because of the reason beyond his control, that the entire receipt of money shown by the assessee was in the proprietary concern and further that the return was filed declaring turnover of Rs.8,82,12,007/, it was further submitted by the assessee’s AR that one more opportunity be granted to the assessee for the purposes of bringing the above said fact to the notice of lower authorities.
However, per contra, Shri KPRR Murthy, the DR on behalf of the Revenue, vehemently opposed the granting of opportunity to the assessee.
Hearing the opposing contentions of either sides and thereby perusing the materials available on record, the ITAT Bench noted:
“We have heard the rival contentions and perused the material available on record. Undoubtedly, it is clear from the order of the Assessing Officer as well as the ld.CIT(A), that the assessee failed to appear before the Assessing Officer as well as the ld.CIT(A) despite numerous opportunities granted by the lower authorities. Before us, reason was given by the assessee for not participating in the proceedings before the lower authorities due to misunderstanding, as the assessee was opinion that the amount had already been taxed in the proprietor firm.”
“However, nonetheless, before us, the case of the assessee is that Proprietor Mr. Ansar Ahmed Khan has already declared turnover of Rs.8,82,12,007/- while filing the return of income as Proprietor of M/s. Union Petrol Service, Hyderabad and it is the case of the assessee before us that an amount of Rs.7,56,98,381/- which was added to the income of the assessee had been disclosed by the said Mr. Ansar Ahmed Khan, who is the Proprietor of M/s. Union Petrol Service, while filing the return of income. Therefore, the said amount cannot be taxed in the hands of Mr. Ansar Ahmed Khan, subject matter of the present assessment proceedings.”, the ITAT Panel added.
Further observing, the Bench consisting of Rama Kanta Panda, the Accountant Member, along with Laliet Kumar, the Judicial Member, commented:
“In our view, both are independent assessee under Income Tax Act 1961, therefore, the case is required to be examined from the point of view of whether the bank account in which the huge cash were deposited belong to the assessee before us or to Mr. Ansar Ahmed Khan, Proprietor of M/s. Union Petrol Services. In our view, the KYC of the said bank account, must have been carried out by the bank thereby brining on record the owner of the account. From the material available on record, the assesseedoes not deserve any sympathy, however, considering the peculiarity of the facts, we are of the opinion that one more opportunity is required to be given to the assessee.”
Thus, allowing the assessee’s appeal, the Hyderabad ITAT held:
“In the light of the above, we deem it appropriate to remand back the matter to the file of ld. CIT(A) subject to cost of Rs.10,000/- (Rupees Ten Thousand only) to be deposited in the Prime Minister National Relief Fund which shall be payable within one month or from the date of receipt of this order or whichever is earlier. The ld. CIT(A) is directed to decide the case afresh in the light of the above said observation, after affording opportunity of hearing to the assessee and after seeking remand report from the Assessing Officer. In the result, the appeal of the assessee is treated as allowed for statistical purposes.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
