R SUBBARAJU, RAJAHMUNDRY V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, RAJAHMUNDRY

ITA 126/VIZ/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7020 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-04-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 27-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA VILLURI
• Keywords: TDS
• Section: 143(3); 143(2)

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम “SMC” पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बाला कृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अपील सं./I.T.A.No.126/Viz/2024 (ननधधारण वर्ा / Assessment Year : 2011-12) R.Subba Raju D.No.79-2-1 Prashanthi Estates Tilak Road, V.L.Puram Rajahmundry [PAN : AAGFR9133F] Vs. Asst. Commissioner of Income Tax Circle-1 Rajahmundry (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri G.V.N.Hari, AR प्रत्यधथी की ओर से / Respondent by : Dr.Aparna Villuri, DR सुनवधई की तधरीख / Date of Hearing : 30.04.2024 घोर्णध की तधरीख/Date of Pronouncement : 28.05.2024 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : This appeal is filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)]-2, Gurugram vide DIN & Order No. ITBA/APL/S/250/2023-24/1060352765(1) dated 31.01.2024, arising out of order passed u/s 143(3) of the Income Tax Act, 1961 (in short ‘Act’) dated 27.03.2014 for the Assessment Year (A.Y.) 2011-12. 2. Brief facts of the case are that the assessee firm engaged in the business of execution of civil contract works, e-filed it’s return of income 2 I.T.A. No.126/Viz/2024, A.Y.2011-12 R.Subba Raju, Rajahmundry for the A.Y.2011-12 on 29.09.2011, declaring total income at Rs.Nil. The case was selected for scrutiny under CASS and notices u/s 143(2) and 142(1) of the Act were issued. The assessee firm submitted information as directed by the Assessing Officer (AO). The AO estimated net profit @8% on total contract receipts including sub contracts also @8%. In computing the income, the AO did not allow deduction for remuneration to partners and interest on partners capitals. 3. Against the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) upheld the order of the AO and dismissed the appeal of the assessee ex-parte. 4. Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal : 1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in deciding the appeal ex-parte. 3. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) ought to have held that the assessing officer is not justified in estimating the net profit @8% which is on a higher side. 4. The learned Commissioner of Income Tax (Appeals) ought to have held that the Assessing Officer erred in estimating the profit on ‘mobilisation advance’ which is not a turnover. 3 I.T.A. No.126/Viz/2024, A.Y.2011-12 R.Subba Raju, Rajahmundry 5. The learned Commissioner of Income Tax (Appeals) ought to have considered the mistakes in allowing credit for TDS and computing the interest u/s 234B. 6. Any other grounds may be urged at the time of hearing. 5. The only contention of the assessee is that the Ld.CIT(A) is not justified in dismissing the appeal of the assessee ex-parte and upholding the estimation of net profit @8% which is on higher side. He further submitted that the Ld.AO is not correct in estimating the profit on mobilisation advance, which is not a turnover and the Ld.CIT(A) erred in upholding the same. He further submitted that the Ld.AO has not considered the entire TDS amount claimed and charging of interest while computing the tax is also not correct and the Ld.CIT(A) ought to have considered the mistakes in allowing credit for TDS and computing the interest u/s 234B. He further submitted that the reason for non compliance to the notices before the Ld.CIT(A) was due to unavoidable reasons and therefore pleaded for an opportunity of being heard before the Ld.CIT(A) to substantiate it’s case in the interest of justice. 6. Per contra, the Ld.DR submitted that the assessee was given sufficient opportunities to prosecute it’s case, but the assessee never complied with the notices issued and served to controvert the findings of the revenue authorities. Hence, the revenue authorities are justified in 4 I.T.A. No.126/Viz/2024, A.Y.2011-12 R.Subba Raju, Rajahmundry dismissing the appeal of the assessee for non prosecution. The Ld.DR, therefore, pleaded to uphold the order passed by the Ld.CIT(A) and dismiss the appeal of the assessee. 7. We have heard both the parties and perused the material available on record. In the instant case, it is evident that the net profit of the assessee was estimated @8% on total contract receipts including sub contracts by the Ld.AO and the appeal of the assessee was dismissed ex- parte by the Ld.CIT(A). As submitted by the Ld.AR, the reasons for non prosecution of the appeal before the Ld.CIT(A) was due to the unavoidable reasons, which were neither intentional nor deliberate. The Ld.AR pleaded for an opportunity before the Ld.CIT(A) to substantiate it’s case with evidences. Keeping in view the aforesaid facts and circumstances of the case and in order to meet the principles of natural justice, we are inclined to remit the matter back to the file of the Ld.CIT(A) to afford an opportunity of being heard to the assessee and direct the Ld.CIT(A) to pass order after verification. The assessee is also directed to adhere to the notices issued by the revenue authorities and cooperate with the department during the proceedings. 5 I.T.A. No.126/Viz/2024, A.Y.2011-12 R.Subba Raju, Rajahmundry 8. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 28 th May, 2024. Sd/- Sd/- (एस बाला कृ ष्णन) (द ु व्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated : 28.05.2024 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– R.Subba Raju, D.No.79-2-1, Prashanthi Estates Tilak Road, V.L.Puram, Rajahmundry 2. रधजस्व/The Revenue – The Asst. Commissioner of Income Tax , Circle-1 Rajahmundry 3. The Principal Commissioner of Income Tax, Rajahmundry 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam