Ashokbhai Devjibhai Patel, Tankara V. The Income Tax Officer, Ward-5(4), Morbi

ITA 120/RJT/2021

AI Insights

The case involves two appeals by Shri Ashokumar Devjibhai Patel against the orders passed by the NFAC for the assessment years 2016-17 and 2017-18. The first appeal contested the penalty under section 271(1)(b) due to non-compliance with notices during the assessment proceedings. The second appeal challenged the addition of Rs.99,950 as unexplained cash credit and the application of section 115BBE for the assessment year 2017-18. The Tribunal noted the absence of the assessee's representation in both appeals and proceeded ex parte, upholding the decisions of the lower authorities.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 133704 (ITAT-RAJKOT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 11-12-2022
• Assessment Year: misc
• Appeal Filed On: 28-12-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Additional evidence; Reasonable cause; Non compliance; TDS
• Section: 68; 144; 143(3); 142(1); 250; 143(2); 2(A)

Judgement Text

आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, राजकोट 瀈यायपीठ 瀈यायपीठ瀈यायपीठ 瀈यायपीठ, , , , राजकोट IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (Conducted Through Virtual Court) ] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SMT. MADHUMITA ROY, JUDICIAL MEMBER, JUDICIAL MEMBER ITA No.120 and 121/RJT/2021 Assessment Year :2016-17 and 2017-18 Shri AshokumarDevjibhai Patel C/o. M/s.Jay Ganesh Petrolium Mitana Morbi PIN : 363 611 PAN : ACNPP 7584 K Vs. DCIT, Cir-Morbi Morbi 363 611. 0 अपीलाथ / (Appellant) यथ /(Respondent) Assesseeby : None Revenue by : Shri V.J. Boricha, DR स ु नवाई क तार ख/Date of Hearing : 12/12/2022 घोषणा क तार ख /Date of Pronouncement: 16/12/2022 आदेश/O R D E R PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER Present two appeals have been filed by the assessee against orders passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the NFAC”] both dated 29.7.2021 passed under section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act" for short] for the Asst.Year2016-17 and 2017-18. The appeal for the Asst.Year 2016-17 is against imposition of penalty under section 271(1)(b) and the appeal for Asst.Year 2017-18 is against order passed in quantum proceedings under section 143(3) of the Act. ITA No.120 & 121/RJT/2021 2 2. None came present on behalf of the assessee at the time of hearing, nor any plea for adjournment was submitted to us. On all the previous occasions also when the case was fixed for hearing none appeared on behalf of the assessee, despite notices on all occasions being directed to be served by Registered Post. Considering the non compliant attitude of the assessee that too in appeal filed by him, it was decided to proceed with the hearing ex parte on the basis of material before us. 3. We shall first take up the appeal pertaining to the Asst.Year 2016-17 in ITA No.121/RJT/2021. 4. As stated above, this appeal arises against order of the ld.CIT(A) confirming the levy of penalty under section 271(1)(b) of the Act, and the grounds raised by the assessee in this regard are as under: “1. The ld.AO erred in law and on facts in levying penalty u/s.271(1)(b) and ld.CIT(A) erred in law and on facts in retaining the same. 2. As there was reasonable cause for non-compliance of the notices the penalty levied may kindly be ordered to be deleted.: 5. As transpires from orders of the authorities below, the assessment of the assessee for the impugned year was completed exparte under section 144 of the Act due to non-compliance and non-participation of the assessee in the assessment proceedings. On account of non-compliance by the assessee, penalty proceedings under section 271(1)(b) of the Act were initiated and notice was issued to show cause as to why penalty under the said section be not levied for non-compliance with three notices issued during the ITA No.120 & 121/RJT/2021 3 assessment proceedings as detailed at para-2 of the penalty order as under: 6. The assessee filed reply to the notice stating that he was not in Morbi and out of Gujarat during the assessment proceedings and his accountant was also not in town and that is why he could not comply with the notice issued during the assessment proceedings. The AO however did not accept the explanation of the assessee since the same was not duly substantiated and evidenced. He therefore held that the assessee was unable to prove the existence of any reasonable cause for non-compliance with the notices issued under section 143(2) and 142(1) of the Act as detailed above and levied penalty of Rs.20,000/- for non-compliance of notice under section 143(2) dated 19.7.2012 and notice under section 142(1) of the Act dated 4.9.2018. 7. The assessee carried the matter in appeal before theld.CIT(A) where on the first occasion when the case was listed for hearing the assessee filed request for adjournment. Thereafter, no further communication was received from the assessee and he did not respond to further notice issued for hearing of the appeal. Accordingly, the ld.CIT(A) proceeded to decide the case on the basis ITA No.120 & 121/RJT/2021 4 of material available on record and went ahead to confirm order of the AO in the absence of any representation from the assessee to counter the findings of the AO to the effect that no reasonable cause was demonstrated by the assessee for non-compliance with the statutory notices issued to it. The relevant finding of the ld.CIT(A) at para-2 & 3 of his order are as under: ITA No.120 & 121/RJT/2021 5 8. Before us also, as pointed out above, none appeared on behalf of the assessee, and in the absence of any representation the concurrent finding of both the authorities below that the assessee was unable to demonstrate reasonable cause for non compliance with notices issued remains uncontroverted. We have no other option therefore but to uphold the order of the Ld.CIT(A) confirming the levy of penalty u/s 271(1)(b) of the Act amounting to Rs.20,000/- In view of the above, grounds of appeal of the assessee are dismissed. ITA No.120 & 121/RJT/2021 6 9. In the result, appeal of the assessee in ITA No.121/RJT/2021 is dismissed. 10. Now we take up appeal of the assessee in ITA No.120/RJT/2021 pertaining to Asst.Year 2017-18. 11. The grounds raised by the assessee are as under: “1] The grounds raised in this appeal are without prejudice to one another. 2] A) The learned AO erred in law and on facts in making addition of Rs.99,950 in respect of unsecured loan received from Shri Rohitkumar N. Patel and the leaned CIT (appeals)erred in law and on facts iii : retaining the same. B) The learned AO erred in law and on facts in applying section 115 BBE and the learned GIT [appeals] erred in law arid on facts in accepting theaction of the learned AO In this regard. 3] (A) The learned AO erred in law and on facts in not allowing thecredit of entire TDS and the learned GIT [appeal] erred in law and on facts in partly accepting theaction of the learned AQ. It is respectfully submitted that the assesse operates his own tankers with the oilcompanies for transporting petrol, diesel etc. The freight earned by the assessee on his owntanker is shown as freight income for respective owned tankers in his books. In addition to that, there are certain tanker owners who ply their tankers with the oil companies/ through the assesse and the assesse earned only fix rate of commission on such freight. This commission earned by the assesse has been offered/to tax as commission income. However, the oil companies make the TDS in name of assese in respect of freight belonging to the outside of tanker owners. It is such TDS for which the learned AO has not given the credit in the assessment order. Separate accounts of each of outside tanker owners are maintained and freight earned by them through the assessee acting as commission agent is credited to the account of respective tanker owners,: and the commission earned there on Is; debited to their respective account. The expenses on plying on such tankers are borne by the respective tanker owners. As such the freight income and the expenses incurred on earning such freight is that of the respective tanker owners not of the assesse, though the oil companies make the IDS in the name of the assesse who acts as a freight commission agent. It is this IDS for which the learned AO has not granted to credit in assessment order. It is respectfully submitted that credit of the entire TDS may kindly be allowed. (B) The learned CIT[appeal] erred in directing to take the aggregate of the receipt and recompute the total income, when in fact such receipts were not of the assesse but was out of side tanker owners for which necessary papers have been filed in course of assessment proceedings ITA No.120 & 121/RJT/2021 7 4] The assesse prays to allow him to submit, on the facts and circumstances of the case, the additional evidences as may be filed in course of hearing of the appeal before the Honourable Bench as additional evidences as the same are of material and substance in deciding the issue under appeal. 5) The learned AO erred in law and facts in charging interest under the various provisions of the Act and the learned CIT [appeals] erred in law and on facts in accepting the action of the learned AOin this regard. 6. Onthe facts and such circumstances of thecase it is respectfully submitted that the income as per the return of income may kindly be accepted as the assessed income and the credit of TDS and tax payment as claimed by the assesse in the return of income may kindly be granted. 12. Ground No. 1,5 & 6 raised by the assessee are general in nature and are therefore not being dealt with by us. 13. In the absence of any representation by the assessee either orally or in writing, plea raised by the assessee in ground No.4 seeking admission of additional evidences before us is rejected 14. Ground No. 2(A) relates to issue of addition made on account of unsecured loans amounting to Rs.99,950/- received by the assessee from one Shri Rohitkumar N. Patel remaining unexplained . The ld.CIT(A) has dealt with the issue in para 5 & 6 of finding as under: “5. The appellant has challenged the addition of Rs.9,99,500/- made u/s 68 of the I.T. Act. The AO during the assessment proceedings noticed that an amount of Rs.9,99,500/- was shown as unsecured loan from one Mr. Rohit Kumar N Patel. The AO further noticed that the assessee failed to fulfill the three conditions as required u/s 68 of the IT. Act i.e. identity of creditors, creditworthiness and genuineness of the transaction. The AO therefore made the addition treating the amount of unsecured loan as unexplained cash credit. 6. During the appellate proceedings no further submission has been filed stating as to how the action taken by the AO is incorrect. In view of the facts noted by the AO I hold that since the appellant has failed to discharge his onus with regard to cash credit therefore the addition made by the AO u/s 68 of the I.T. is confirmed, it is further noticed that the AO has invoked the provision of section 115BBE of the I.T. Act for computing the tax liability on this addition, which is proper Grounds 2&3 are accordingly dismissed.” ITA No.120 & 121/RJT/2021 8 15. We have perused order of theld.CIT(A) and we have noted that the authorities below have given concurrent finding of fact that the assessee has failed to establish genuineness of the loan allegedly received by it from one Shri Rohit N.Patel. In the absence of any representation from the assessee, and in the absence of any material on record to support the case of the assessee, the concurrent findings of the authorities below remain uncontroverted. The order of the Ld.CIT(A) upholding the addition of Rs.99,950/- ,accordingly calls for no interference. The ground of appeal No.2(A) of the assessee is dismissed. 16. Ground no.2(B) relates to the issue of invocation of section 115BBE of the Act. This issue we find has been dealt with the ld.CIT(A) at para 6 of his order, which is reproduced above. As is evident, the addition on accountof unexplained unsecured loans of Rs.99,950/- was made by the authorities below under section 68 of the Act and provision of section 115BBE was invoked for computing the tax liability on this addition. Theld.CIT(A) has noted that invocation of section 115BBE was proper. In the absence of any representation from the assessee to counter the finding of the ld.CIT(A) we are constrained to confirm the order of the ld.CIT(A). Accordingly, we uphold the order of the ld.CIT(A) on this issue and reject this ground of appeal No.2(B) of the assessee. 17. Ground no.3(A) relates to the issue of entire credit of TDS not being given to the assessee. The same has been dealt at para 7-8 of the CIT(A)’s order. 18. We have noted from the same that the ld.CIT(A) has directed the AO to take entire income relating to the TDS credit as business ITA No.120 & 121/RJT/2021 9 income of the assessee instead of rejecting the TDS credit to the extent of income offered by the assessee. The assessee therefore is not aggrieved on account of short TDS credit given. Ground of appeal No.3(A) is therefore dismissed as not maintainable on facts. 19. Ground No. 3(B) is against the order of the Ld.CIT(A) directing the AO to bring to tax all income pertaining to the TDS deducted and claimed by the assessee. 20. In the absence of material on record to and for want of representation from the assessee, we find no infirmity in the aforesaid direction of the Ld.CIT(A). In fact the Ld.CIT(A) has in all fairness allowed entire TDS credit to be given to the assessee but at the same time directed all income pertaining to the said TDS to be brought to tax. We see no reason to interfere in the well reasoned order of the Ld.CIT(A) This ground of appeal of the assessee No.3(B) is also dismissed. In effect appeal of the assessee is dismissed. 21. In the result, both the appeals of the assessee are dismissed. Order pronounced in the Court on 16 th December, 2022 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) JUDICIAL MEMBER (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Ahmedabad, dated 16/12/2022 vk*