The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) directed fresh adjudication on the grounds of notices for hearing not received
The taxpayer submitted their income tax return for the fiscal year 2014-15 on November 29, 2014, disclosing a total income of Rs.4,51,120. Subsequently, the return was chosen for examination, and official notifications were sent to the taxpayer under section 143(2) and section142(1) of the Income Tax Act, 1961.
In reply to the aforementioned notices, Mr. ParitoshRungta, the son of the taxpayer, stated that the taxpayer passed away on December 7, 2013, and he is the legal heir and representative of the taxpayer. Consequently, all the proceedings have been carried out through the legal heir, namely the son of the taxpayer.
The assessee, an individual, credited commission income of Rs. 1,79,89,972, and debited other expenses including loss from derivatives of Rs.1,21,06,336.
Further, interest income of Rs.5,70,917, was shown as income from other sources. During the assessment proceedings, the assessee was required to furnish the details of the aforesaid commission income along with the details of the transaction on which the said commission was received.
The assessee was also asked to furnish the evidence, rate of commission, and tax deducted at source from the said commission. In response thereto, the assessee submitted that the commission was received from M/s Daikai Engineering PTE Ltd, Singapore against getting them orders.
However, the assessee did not furnish any documentary evidence, invoices/bills raised, any procurement orders, or any correspondence related to the services rendered in relation to the claim of commission income. The assessee was also asked to furnish copies of FIRC from the banks.
However, the assessee failed to furnish the details. At the end of the proceedings, the assessee made a fresh claim that the commission is still receivable and has not been received. However, it was noticed that the copy of the balance sheet of the assessee furnished by the assessee does not show any debtors.
Accordingly, vide assessment order dated 23/12/2016, passed under section 143(3) of the Income Tax Act the Assessing Officer (“AO”) held that the claim of commission income of It was further held that the said income is credited to the account but no evidence of the said income, its nature, services rendered, etc. has been furnished till date. Further it was held that the credit of Rs.1,79,89,072, was appearing in the accounts of the assessee, but the source of the said credit has not been explained by the assessee.
In the absence of relevant details, evidence, and satisfactory explanation, the AO treated the credit of Rs.1,79,89,972, as unexplained cash credit under section 68 of the Income Tax Act and added the same to the total income of the assessee.
After hearing both the parties, the tribunal came to the conclusion that it was evident that theCommissioner of Income Tax (Appeals) has passed the order ex-parte due to the non-appearance of/on behalf of the assessee. The Authorised Representative submitted that due to some technical glitches on the ITBA portal, notices of hearing were not received by the legal heir of the assessee, and therefore the same could not be attended.
Further, the assessee is duly represented by the AR and wished to pursue the litigation against the additions made by the AO. The tribunal observed that the CIT(A) has not rendered any finding on the merits of the addition made by the AO. Therefore, in view of the above, the tribunal deemed it appropriate to restore the appeal to the file of the CIT(A) for de novo adjudication.
The two-member bench comprising of Prashant Maharishi and Sandeep Singh Karhaildirected the assessee to furnish all the details in support of its claim before the CIT(A) within 90 days of the receipt of the order and thereafter notice of hearing be issued by the CIT(A).
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