Income Tax Appellate Tribunal - Agra
Ram Sevak Gupta , Morena, Madhya Pradesh vs Income Tax Officer , Morena, Madhya ... on 29 May, 2024
IN THE INCOME TAX APPELLATE TRIBUNAL
AGRA BENCH, AGRA
BEFORE: SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER
AND
SHRI P.C. YADAV, JUDICIAL MEMBER
ITA No. 124/Agr/2023
Assessment Year: 2017-18
Ram Sewak Gupta, v. Income-tax Officer,
Prop. M/s. Mohaniya Oils Co., Ward 1 Morena.
Ambah Road, Porsa,
Morena (M.P.)
PAN: ABGPG6328L
(Appellant) (Respondent)
Assessee by: Sh. S.C. Jain, C.A.
Revenue by: Sh. Harsh Siddharth Gautam, Sr. DR
Date of hearing : 21.05.2024
Date of Pronouncement: 21.05.2024
ORDER
PER RAMIT KOCHAR, AM:
This appeal listed as ITA No. 124/Agr/2023 has arisen before the Tribunal from order of Ld. CIT(Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 09.08.2023 (DIN & Order No. ITBA/NFAC/S/250/2023-24/1054975710(1) for assessment year 2017- 18, which in turn has arisen from the assessment order dated 31.12.2019 (Din & Order No. ITBA/AST/S/143(3)/2019- ITA No. 124/Agr/2023 2 20/1023502795(1) passed by the Assessing Officer u/s. 143(3) of the Income-tax Act, 1961.
2. Brief facts of the case are that the assessee is an individual and is engaged in the wholesale trading of Oil (CDSO, CDRO & RBD). The assessee filed return of income on 06.11.2017 declaring total income of Rs.8,33,640/-. Case was selected for complete scrutiny through CASS on the following ground :
(i). Large cash deposit during the demonetization period and abnormal increase in sales with decrease in profitability compared to preceding previous year.
(ii). Quantitative details of principal items of goods traded or raw material as well as finished goods not submitted.
(iii). High revenue from operations (including other income) and no scrutiny in preceding 5 assessment years.
(iv). Abnormal increase in cash deposits during demonetization period as compared to pre demonetization period."
Assessing Officer issued notice u/s. 143(2) on 10.08.2018. Meanwhile Assessing Officer issued notice u/s. 133(6) to the banks to furnish copy of bank account statements for the period 01.04.2016 to 31.03.2017 and KYC details. In compliance thereof, bank provided the requisite information. Thereafter, the Assessing Officer issued notices u/s. 142(1) from time to time, as stated in page 2 of the assessment order. The assessee participated in the assessment proceedings, but for further investigation summons were issued to the assessee u/s. 131 seeking ITA No. 124/Agr/2023 3 personal attendance for production of books of accounts, purchase bills, sale bills, ledger and other documents for the assessment year 2017-18, but the assessee did not comply. Fresh summons were issued dated 27.12.2019, which remained un-complied with. The A.O. issued notice u/s. 133(6) to parties who supplied material to the assessee but the same remained un-complied with. There was huge difference in the return filed with the Commercial Tax Department by the assessee with respect to taxable turnover and the turnover shown in the Income Tax Return. It is also mentioned by the Assessing Officer that the statement of the assessee was recorded on 03.03.2017 before ADIT (Inv.), Gwalior, wherein the assessee has stated as under :
(i). That his turnover for the FY 2016-17 was about Rs.1 crore
(ii). That he had bank accounts with bank of Baroda (Current A/c) and with UCO bank (personal A/c)
(iii). That he has stock of about 20,000 Kgs. Of Sarson as on that date and was in the Godown - Suraj Bhan Warehouse, Opposite K.S. Oils Pvt. Ltd. Morena.
(iv) That purchase/sale more than Rs. 2 Lakhs during FY 2016-17 was as under
:-
1. Purchase of Sarson from Choudhary Warehouse, A.B. road, Morena
2. Sale of Sarson to Rohit Traders, Jiwaji Ganj, Morena."
3. The assessee could not file the details of certain transactions appearing in the bank transactions. Assessee could not produce books of account at the time of recording of statement on 03.03.2017.
Assessing Officer concluded that the books of accounts produced by the assessee are not reliable. The assessee has also not complied with ITA No. 124/Agr/2023 4 other directions of the Assessing Officer as to filing of sale bills and quantitative details. Almost 50% sale was made in cash and they are not verifiable in the absence of the addresses of the purchasers. Thus, there were discrepancies in the books of account. As the purchases as well as sales done by the assessee are not verifiable as held by the Assessing Officer in the absence of books of account and other relevant accounts submitted by the assessee, books of account were rejected by the Assessing Officer u/s. 145(3) and the gross profit of 1% was taken on the sale of the assessee, which ultimately led to the addition of Rs.1,94,53,759/- after adjusting for the expenses.
4. Aggrieved, assessee filed first appeal with Ld. CIT(Appeals). Ld. CIT(Appeals) has issued notices to the assessee as detailed hereunder:
Sr. No. Date of Date of Remarks
notice compliance
1. 18.01.2021 28.01.2021 Non compliance
2. 05.09.2022 12.09.2022 Non compliance
3. 31.07.2023 07.08.2023 Non compliance
But there was no compliance on the part of assessee, which led Ld. CIT(Appeals) to dismiss appeal of the assessee by holding as under :
"3.1. Decision:
I have carefully perused the assessment order and the grounds of appeal submitted by the appellant. During the appellate proceedings, the following opportunities of being heard were granted to the appellant ITA No. 124/Agr/2023 5 vide notices u/s 250 of the Act issued through the ITBA portal which are summarized below:
Sr. No. Date of Date of Remarks
notice compliance
1. 18.01.2021 28.01.2021 Non compliance
2. 05.09.2022 12.09.2022 Non compliance
3. 31.07.2023 07.08.2023 Non compliance
The above table clearly demonstrates that the appellant has been allowed several opportunities to explain the contentions of this appeal but to no avail as the appellant has remained not-forthcoming and has not responded on the ITBA portal.
3.2 The aforesaid mentioned circumstances show that the appellant is not interested in pursuing its appeal and has no documentary evidence in support of the grounds of appeal filed by the appellant. The maxim 'vigilantibus non-dormientibus jura subvenunt i.e. the law assists those who are vigilant and not those who sleep over their right, is applicable in this case.
3.3 The Hon'ble ITAT in ITA No. 1025-1027/CHD/2005 for the AY 2002-03 in the case of M/s Chhabra Land & Housing Ltd. after following the decision of Hon'ble Supreme Court in the case of B.N. Bhattacharjee & other 118 ITR 461 [SC] held that the appeal does not mean merely filing of the appeal but effectively pursuing the same.
3.4 Considering the above facts and the records available, it is established that the appellant was provided many opportunities of being heard. However, the appellant has remained noncompliant. No material fact has been brought on record in support of the grounds of appeal or to rebut the findings of the Assessing Officer (AO). The appellant inspite of being given ample opportunities during appellate proceedings, failed to offer any explanation/supporting documents in respect of grounds of appeal raised by the appellant. I have carefully considered the assessment order and since the appellant has not furnished any documentary evidence in support of the grounds of appeal filed by the appellant, I do not find any reason to interfere with the order of the AO. Hence, the assessment order passed by the AO stands confirmed. Accordingly, all the grounds of appeal taken by the appellant are dismissed."ITA No. 124/Agr/2023 6
5. Thus, it could be seen that Ld. CIT(Appeals) dismissed appeal of the assessee ex parte in limine without discussing the issues on merits. Assessee has raised as many as 7 grounds of appeal before Ld. CIT(Appeals), but none of the grounds are adjudicated by Ld. CIT(a) and appeal was dismissed ex parte in limine without discussing the issues on merits by Ld. CIT(Appeals).
6. Aggrieved, assessee has filed appeal before Tribunal. Ld. Counsel appeared virtually for the assessee and stated that there is violation of section 250(6) of the Act and the matter may be set aside to the file of Ld. CIT(Appeals) for fresh adjudication, as Ld. CIT(Appeals) has not discussed the issues on merits as is required u/s. 250(6).
6.A. Ld. Sr. DR contended that the assessee did not appear before Ld. CIT(Appeals). There is no compliance by the assessee before Ld. CIT(Appeals). He relied upon the order of ld. CIT(Appeals) and fairly submitted that the matter is left to the Bench to decide.
7. We have heard rival contentions and perused material on record. We observe that Ld. CIT(Appeals) has dismissed the appeal of the assessee for non-prosecution ex parte in limine without discussing the issues on merits in accordance with law. Assessee did not enter appearance before Ld. CIT(Appeals). In any case, under the provisions ITA No. 124/Agr/2023 7 of section 250(6), Ld. CIT(Appeals) is required to state points for determination, decision thereon and reasoning for the decision, which in this case Ld. CIT(Appeals) has not done so. We also observe that the assessee did not comply with notices issued by Ld. CIT(Appeals). In the facts and circumstances of the case and in the interest of justice and fairness to both the parties, the order of ld. CIT(Appeals) is set aside and matter is restored back to the file of ld. CIT(Appeals) for fresh adjudication on merits in accordance with law after providing opportunity to both the parties. The ld. CIT(Appeals) shall adjudicate all the grounds of appeal raised by the assessee on merits in accordance with law, inter alia, ground No. 5 &6 raised by assessee challenging rejection of books of account and adhoc disallowance of indirect expenses. We clarify that we have not commented on the merits of the issues arising in the appeal. We order accordingly.
8. In the result, appeal filed by assessee is allowed for statistical purposes.
Order pronounced in the open court on 21.05.2024 on conclusion of hearing and reduced in writing and signed on 29.05.2024.
Sd/- Sd/-
(P.C. YADAV) (RAMIT KOCHAR)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 29.05.2024