DIGGA ENTERPRISES,EAST CHAMPARAN V. NFAC, DELHI, DELHI

ITA 480/PAT/2024

AI Insights

The case involves Digga Enterprises, a partnership firm engaged in wholesale trading of paddy, which appealed against the order of the CIT(Appeals) at the National Faceless Appeal Centre, Delhi. The firm had filed its return for the assessment year 2018-19, declaring an income significantly lower than its reported sales, and claimed large expenditures which were not substantiated with adequate documentation. The Assessing Officer, due to lack of compliance and evidence from the assessee, assessed a higher taxable income. The CIT(Appeals) upheld this assessment after the assessee failed to provide necessary submissions and evidence. The ITAT, considering the circumstances, decided to remit the case back to the CIT(Appeals) for a fresh assessment, providing the assessee another opportunity to present its case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473173 (ITAT-PATNA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Business expenditure; Corroborative evidences; TDS
• Section: 143(3); 142(1); 143(2)

Judgement Text

" ITA No. 480/PAT/2024 (A.Y. 2018-2019) Digga Enterprises 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA-PATNA ‘e-COURT’, KOLKATA [Hybrid Court Hearing] Before Shri Duvvuru RL Reddy, Vice-President (KZ) & Shri Sanjay Awasthi, Accountant Member I.T.A. No. 480/PAT/2024 Assessment Year: 2018-2019 Digga Enterprises,…………….…………....……Appellant Amodel, NH-28, Raxual, East Champaran-845433, Bihar [PAN:AAKFD4723D] -Vs.- National Faceless Assessment Centre,....Respondent Delhi Appearances by: Shri Sanjeev Kr. Anwar, Advocate, appeared on behalf of the assessee Shri Ashwani Kr. Singal, JCIT, appeared on behalf of the Revenue Date of concluding the hearing: February 13, 2025 Date of pronouncing the order: February 13, 2025 O R D E R Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 5th June, 2024 passed for Assessment Year 2018-19. ITA No. 480/PAT/2024 (A.Y. 2018-2019) Digga Enterprises 2 2. Brief facts of the case are that the appellant-assessee is a partnership firm, which is engaged in wholesale trading of paddy. It filed its return of income on 21.02.2019 declaring income of Rs.2,99,630/-. Statutory notice under section 143(2) was issued on 23.09.2019. On verification of return of income, it is seen that the assessee has reported sales to the tune of Rs.105,56,36,335/- and claimed large expenditure. Notices under section 142(1) of the Income Tax Act dated 17.12.2020 and 22.01.2021 were issued calling for certain details, i.e. computation of income, nature of business activity carried out during the year, business expenses claimed, details of TDS deducted, GP ratio, NP ratio for the last three years. The assessee furnished the details on 28.01.2021. However, the assessee claimed huge expenditure on account of interest on loan, travelling expenses, warehouse charges etc. Accordingly notice under section 142(1) was issued calling for evidences in support of expenditure claimed but no compliance was made from the end of the assessee. Show-cause notice dated 27.09.2021 was issued calling to produce written submissions alongwith supporting evidences. In absence of any documentary evidence in support of its claim, the ld. Assessing Officer assessed the total taxable income at Rs.82,75,877/- under section 143(3) read with 144B of the Income Tax Act, 1961. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). 3. The ld. CIT(Appeals) has given several opportunities to the assesese to substantiate its claim, but the appellant did not file the written submissions and did not represent the case before the ld. CIT(Appeals). Thereafter the ld. CIT(Appeals) dismissed the appeal ITA No. 480/PAT/2024 (A.Y. 2018-2019) Digga Enterprises 3 on 5th June, 2024. On being aggrieved, the assessee preferred an appeal before the ITAT. 4. At the time of hearing, it was the submission of the ld. Counsel for the assessee that ld. CIT(Appeals) did not consider the case on merit, rather he just upheld the order passed by the ld. Assessing Officer. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer as confirmed by the ld. CIT(Appeals). 5. At the outset, ld. D.R. brought to my notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.82,75,877/-. Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities. 6. We have heard the ld. Departmental Representative and perused the material available on record. Considering the facts and circumstances of the case, we are inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. CIT(Appeals) with a direction to provide one more opportunity of ITA No. 480/PAT/2024 (A.Y. 2018-2019) Digga Enterprises 4 being heard to the assessee. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 13/02/2025. Sd/- Sd/- (Sanjay Awasthi) (Duvvuru RL Reddy) Accountant Member Vice-President (KZ) Kolkata, the 13th day of February, 2025 Copies to :(1) Digga Enterprises, Amodel, NH-28, Raxual, East Champaran-845433, Bihar (2) National Faceless Assessment Centre, Delhi (3) CIT(Appeals), NFAC, Delhi (4) CIT - ; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. "