SHRI CHANDRA PRAKASH, JAIPUR V. INCOME TAX OFFICER WARD-7-2, JAIPUR

ITA 1246/JPR/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4561 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 01-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANCHAL MEENA JCIT DHK
• Assessee Lawyers: NITESH GUPTA
• Keywords: Rejection of books of accounts; Principle of natural justice; Corroborative evidences; Set aside
• Section: 145(3); 144

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH B, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,O A JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1246/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2014-15. SHRI CHANDRA PRAKASH, S/O SHRI RAGHUNATH YADAV YADAV KIRANA STORE KE PASS, VATIKA, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 7(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. BOJPP 9392 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI NITESH GUPTA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. CHANCHAL MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18.02.2020. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 19/02/2020 . VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 14 TH SEPTEMBER, 2018 OF LD. CIT (A)-3, JAIPUR FOR THE AS SESSMENT YEAR 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT (A) HAS ERRED IN DECIDING THE CASE EX-PARTE WITHOUT FOLLOWING PROPER COURSE OF LAW AND PROVIDING OPPORTUNITY TO T HE ASSESSEE FOR PRESENTING THE CASE. THE ACTION OF THE LD. CIT (A) IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE ENTIRE ASSESS MENT ORDER AND ORDER PASSED BY THE LD. CIT (A) WHICH IS PASSED IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. 2 ITA NO. 1246/JP/2018 SHRI CHANDRA PRAKASH, JAIPUR. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT (A) HAS ERRED IN NOT ADJUDICATING ON THE ACTION OF THE LD AO IN REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE BY I NVOKING THE PROVISION OF SECTION 145(3) AND THEREAFTER APPLYING A N.P. RATE OF 8% WHICH RESULTED INTO CONFIRMING OF TRADING ADD ITION OF RS. 15,46,243/-. THE ACTION OF THE LD. CIT (A) AND LD. A.O. IS ILLEGAL, UNJUSTIFIED, ARBITRARY AND AGAINST THE FACTS OF THE CASE. RELIEF MAY PLEASE BE GRANTED BY QUASHING THE REJECTION OF BOOKS AND DELETING THE TRADING ADDITION OF RS. 15,46,243/-. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT (A) HAS ERRED IN NOT ADJUDICATING ON THE ACTION OF THE LD AO FOR PASSING THE ASSESSMENT ORDER EX-PARTE UNDER SECTION 144 OF THE I.T. ACT, 1961. THE ACTION OF THE LD. CIT (A) AND L D. AO IS ILLEGAL, UNJUSTIFIED AND ARBITRARY. RELIEF MAY PLEASE BE GR ANTED BY QUASHING THE ENTIRE ASSESSMENT ORDER BEING ILLEGAL AND VIOLATIVE OF THE PRINCIPLES OF NATURAL JUSTICE. 4. THE ASSESSEE CRAVES HIS RIGHT TO ADD, AMEND OR A LTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. THE ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF RETAIL SALE OF LIQUOR (WINE SHOP). THE ASSESSEE FILED HIS RETURN OF INCOME ON 30 TH NOVEMBER, 2014 DECLARING TOTAL INCOME OF RS. 4,10,700/-. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, THE AO REJECTED THE BOOKS OF ACCOUNTS OF ASSESSEE BY INVOKING THE PROVISIONS OF SECTION 145(3) OF THE IT ACT AND THER EBY ESTIMATED THE INCOME OF THE ASSESSEE BY APPLYING NET PROFIT RATE AT 8% WHICH HA S RESULTED TRADING ADDITION OF RS. 15,46,243/-. THE ASSESSEE CHALLENGED THE SAID ORDER OF THE AO BEFORE THE LD. CIT (A). HOWEVER, NOBODY HAS APPEARED BEFORE THE LD. C IT (A) THEREFORE, THE APPEAL OF THE ASSESSEE WAS DISMISSED BY PASSING THE IMPUGNED EX PARTE ORDER. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBMI TTED THAT THE NOTICES ISSUED BY THE LD. CIT (A) WERE RECEIVED BY THE EMPLOYEE OF THE ASSESSEE, HOWEVER, THE 3 ITA NO. 1246/JP/2018 SHRI CHANDRA PRAKASH, JAIPUR. SAME COULD NOT BE BROUGHT TO THE NOTICE OF THE ASSE SSEE AND, THEREFORE, THERE WAS NO APPEARANCE BEFORE THE LD. CIT (A). HE HAS REFER RED TO THE AFFIDAVITS OF THE ASSESSEE AS WELL AS ONE SHRI BHARAT SAINI, THE EMPL OYEE OF THE ASSESSEE AND SUBMITTED THAT DUE TO MIS-COMMUNICATION AND BONAFID E MISTAKE THERE IS NO REPRESENTATION BEFORE THE LD. CIT (A). THE LD. A/R HAS FURTHER SUBMITTED THAT THE LD. CIT (A) HAS DELETED THE APPEAL SUMMARILY WITHOUT PA SSING A SPEAKING ORDER AND PARTICULARLY WITHOUT DECIDING THE ISSUE RAISED IN T HE APPEAL. THEREFORE, HE HAS PLEADED THAT THE IMPUGNED ORDER OF THE LD. CIT (A) MAY BE SET ASIDE AND THE MATTER MAY BE REMANDED TO THE RECORD OF THE LD. CIT (A) FO R DECIDING THE SAME AFRESH AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 4. ON THE OTHER HAND, THE LD. D/R HAS VEHEMENTLY OP POSED TO THE REQUEST OF REMANDING THE MATTER TO THE RECORD OF THE LD. CIT ( A) AND SUBMITTED THAT THE LD. CIT (A) HAS GRANTED NUMBERS OF OPPORTUNITIES TO THE ASS ESSEE BUT NOBODY HAS APPEARED ON THE DATE OF HEARING DESPITE THE NOTICES WERE ISS UED TO THE ASSESSEE. THEREFORE, WHEN THERE IS NO VIOLATION OF PRINCIPLES OF NATURAL JUSTICE, THEN NO FURTHER OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS ESTIMATED THE INCOME OF THE ASS ESSEE BY APPLYING THE NET PROFIT AT 8% AND THEREBY MADE TRADING ADDITION OF RS. 15,4 6,243/-. IT IS PERTINENT TO NOTE THAT THE ADOPTION OF NET PROFIT AT 8% IN THE CASE O F THE ASSESSEE HAS NO BASIS AS THE AO HAS NOT BROUGHT ON RECORD ANY PAST HISTORY OF TH E ASSESSEE DECLARING NET PROFIT OR A COMPARABLE CASE OR NET PROFIT PREVAILING IN TH E PARTICULAR TRADE. THOUGH THE AO HAS ALSO PASSED THE ASSESSMENT ORDER UNDER SECTION 144 OF THE IT ACT, HOWEVER, THE LD. CIT (A) OUGHT TO HAVE AT LEAST DECIDED THE ISSU E OF ESTIMATION OF INCOME ON SOME 4 ITA NO. 1246/JP/2018 SHRI CHANDRA PRAKASH, JAIPUR. REASONABLE AND PROPER BASIS. INSTEAD OF GOING INTO THE MERITS OF THE ISSUE, THE LD. CIT (A) HAS DISMISSED THE APPEAL OF THE ASSESSEE SU MMARILY IN PARA 4 AS UNDER :- 4. THE PRESENT APPEAL IS AGAINST THE ASSESSMENT O RDER PASSED U/S 144 OF THE ACT. I HAVE CAREFULLY PERUSED THE GROUN DS OF APPEAL AND ASSESSMENT ORDER. AS ALREADY DISCUSSED ABOVE, THE APPELLANT HAS FAILED TO OFFER ANY EXPLANATION FOR SUBMISSION IN S UPPORT OF THE GROUNDS RAISED IN THIS APPEAL NOR ANY SUPPORTING EVIDENCES WERE PRODUCED BY HIM DESPITE ADEQUATE OPPORTUNITY HAVING BEEN PROVID ED. IN THIS CONNECTION, RELIANCE MAY BE PLACED UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF H.M. ESUFALI H .M. ABDULALI (1973) 90 ITR 271 WHEREIN THE HONBLE COURT HAS HELD THAT THE APPELLATE AUTHORITY CANNOT SUBSTITUTE ITS OWN JUDGMENT IN PLA CE OF THE JUDGMENT OF THE A.O. UNLESS IT IS SHOWN THAT THE JUDGMENT OF THE AO WAS BIASED, IRRATIONAL, VINDICTIVE OR CAPRICIOUS. IN THE INSTANT CASE THE APPELLANT HAS NOT ABLE TO S HOW THAT THE DECISION OF THE A.O. WAS ARBITRARY, BIASED, IRRATIONAL, VIND ICTIVE OR CAPRICIOUS WITHOUT ANY BASIS, I FIND NO REASON TO INTERFERE WI TH THE DECISION OF THE AO. SINCE THE IMPUGNED ORDER OF THE LD. CIT (A) DOES NO T TOUCH THE MERITS OF THE ISSUE REGARDING THE ADDITION MADE BY THE AO AND THE JUSTI FICATION OF ADOPTION OF THE NET PROFIT AT 8%, THEREFORE, IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, WE SET ASIDE THE ORDER OF THE LD. CIT (A) AND REMAND THE MATTER TO T HE RECORD OF THE LD. CIT (A) FOR FRESH ADJUDICATION. THE ASSESSEE IS GRANTED ONE MO RE OPPORTUNITY TO REPRESENT HIS CASE BEFORE THE LD. CIT (A). IN CASE THE ASSESSEE FAILS TO APPEAR BEFORE THE LD. CIT (A), THE LD. CIT (A) MAY DECIDE THE APPEAL ON THE B ASIS OF THE MATERIAL AVAILABLE ON RECORD. 5 ITA NO. 1246/JP/2018 SHRI CHANDRA PRAKASH, JAIPUR. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/02/202 0. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKWO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/02/2020. DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SHRI CHANDRA PRAKASH, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE ITO WARD 7(2), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1246/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR