INCOME TAX OFFICER, CIVIC CENTRE V. PAYAL GUPTA, PASCHIM VIHAR

ITA 4854/DEL/2024

AI Insights

The case involves an appeal by the Income Tax Officer against the order of the Ld. CIT(A), which had deleted an addition of Rs. 93,52,965 to the assessee's income for the assessment year 2022-23. The addition was initially made by the Assessing Officer (AO) due to a discrepancy between the turnover reported by the assessee and the turnover data available from GSTR-I. The CIT(A) found that the AO had not adequately considered the assessee's submissions and had not provided a proper opportunity for the assessee to explain the discrepancies, thus violating the principles of natural justice. The Tribunal agreed with the CIT(A) and dismissed the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126934 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2022-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: UPENDER SINGH RAGHAV
• Keywords: Opportunity of being heard; Reasonable cause; Principle of natural justice
• Section: 142(1); 143(2); 69A; 44AB

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI SUDHIR KUMAR, JUDICIAL MEMBER ITA NO. 4854/Del/2024 (AY- 2022-23) INCOME TAX OFFICER, CIVIC CENTRE, ROOM NO. 807, 8TH FLOOR, E- 2 BLOCK, CIVIC CENTRE, NEW DELHI – 2 VS. PAYAL GUPTA, A-2/96, PASCHIM VIHAR, DELHI – 110 063 (PAN: ATBPG6450G) (APPELLANT) (RESPONDENT) Department by : Ms. Harpreet Kaur Hansra, Sr. D.R. Assessee by : Shri Upender Singh Raghav, CA Date of hearing : 17.04.2025 Date of pronouncement : 23.04.2025 ORDER PER SHAMIM YAHYA, AM : This appeal filed by the Revenue is directed against the order dated 21.06.2024 of the Ld. CIT(A)/NFAC, Delhi relating to assessment year 2022-23 on the following ground:- “Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 93,52,965/- by not appreciating the fact of the case. In this regard, it is the fact that the assessee has declared total turnover of Rs. 9,89,46,806/- but as per GSTR-I data total turnover is Rs. 2 10,82,99,771/-. Hence, the difference of the turnover Rs. 93,52,965/- and total credits in her bank is under reported her income. In this regard, assessee failed to furnish any documentary evidences regarding the difference in turnover of Rs, 93,52,965/- even ample opportunities given to the assessee.” 2. It is noted that there is a delay of 59 days in filing the appeal by the Revenue before the Tribunal. Upon careful consideration, we find considerable cogency in the contention of the ld. DR that delay in dispute has occurred due to huge work load relating to the reopening of the time barring assessment cases after changing of law and effective new provisions w.e.f. 1.09.2024 and penalty time barring cases and also due to technical issues with ITBA portal. In view of above, we are of the considered view that reasonable cause has been attributed to the assessee for delay of 59 days in filing the appeal before the Tribunal by the Department, hence, we condone the delay of 59 days in filing the appeal before the Tribunal. 3. The brief facts of the case are that the assessee has filed its return of income in electronic mode for AY 2022-23 on 28.9.2022, declaring total income at Rs. 10,12,490/-. The case was selected for complete scrutiny under CASS to verify the following issue:- (i) The assessee has reported huge turnover in Part A-Trading A/c exceeding statutory limit for tax audit as per section 44AB and tax audit report has not been filed. 3 3.1 Notices u/s. 143(2) of the Act was issue don 02.06.2023 and after that notices u/s 142(1) and show cause notice were issued to the assessee which were delivered on the email id of the assesse. In response to the said notice the assessee has submitted written submission alongwith copy of ITR, computation of income, copy of sales ledger account and purchase import ledger account, copy of GST return, loan account details, unsecure loan ledger, import expenses bills and cash book of M/s Hardik Papers, declaration from Yash Kumar Gupta & Sons HUF and computation of income. Etc. 3.2 On perusal of income tax return, the AO noticed that the assessee has declared total turnover of Rs. 9,89,46,806/-. Whereas as per GSTR-1 data available on insight portal total turnover is Rs. 10,82,99,771/-. Hence, the difference of the turnover Rs. 93,52,965/- is under reported with respect to turnover declared. The assessee was asked about the above difference, in response the assessee submitted that in the books the turnover declared is Rs. 9,89,46,806/- but the labour charges are not included in it, it is Rs. 1,01,000/-. Hence, the turnover is Rs. 9,90,47,806/-. Further he has submitted that the rest of the amount of difference is ‘invoice no. 010/hp/21-22 dated 24.04.2021 Shri Ishwar paper. The invoice has not been taken in GSTR-9 reconciliation’ it means that the assessee acknowledge the difference amount. Therefore, the 4 difference of Rs. 93,52,865/- is treated as income of the assessee and added to the total income for the year under consideration u/s. 69A unexplained money. 4. Against the said action of the AO, Assessee, appealed before the Ld. CIT(A) who vide his impugned order has allowed the appeal of the assessee by observing as under:- “During the appellate proceedings the assessee has submitted that she is proprietor in the company Hardik Papers and having business of trading of papers gum which is import in India and sale in local market. The appellant has submitted that the 26AS & AIS statement from the portal, GSTR-9 From Gst Portal and also share sales ledger which already attached to first submission 01.05.2024 which shown the declared turnover of amounting Rs. 98946806/- is correct and there is no difference in the turnover reported in his reply the assessee had also mentioned that incase of any further clarification required and or further issues, kindly issue the assessee another notice or give a chance for Video conferencing or physical hearing to enable the assessee to explain his case better. However, the explanations and requests of the assessee seemed to have fallen on deaf ears as the AO without applying his mind, perusing through the papers that were submitted before him and or giving the assessee an opportunity to explain his case better physically and or via a VC Hearing, passed an order post haste where he added the entire proposed amount of RS. 93,52,965/- to the income of the assessee. I have noted that as is evident, the impugned assessment order is passed by the AO without judiciously and or pragmatically considering various submissions made by the appellant. Further, since the appellant was not allowed an opportunity to be heard which is a constitutional right and or the basic right of the assessee, this was clearly against the principles of natural justice and the proceedings and the order are illegal. Considering the aforesaid facts and other evidence filed before me I note that the AO was not justified in making the addition of Rs. 93,52,965/- as 5 unexplained money u/s. 69A. Hence, the addition made by the AO is deleted. Accordingly, the ground raised by the assessee is allowed.“ 5. Against the above findings of the Ld. CIT(A), Revenue is in appeal before us. 6. We have heard both the parties and perused the records. Ld. DR relied upon the order of the AO. Per contra, ld. AR for the assessee relied upon the order of the ld. CIT(A). Upon careful consideration, we are of the considered view that Ld. CIT(A) has taken a correct view in the matter and rightly deleted the addition in dispute, which do not require any interference on our part, hence, we uphold the same and reject the ground raised by the Revenue. 7. In the result, the Revenue’s appeal is dismissed. Order pronounced in the Open Court on 23/04/2025. Sd/- Sd/- (SUDHIR KUMAR) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRBhatnagar Copy forwarded to: - 1. Appellant. 2. Respondent. 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar "