Srinivasa Ravi Kumar Chintagunta, Hyderabad, Hyderabad V. ITO, Ward-11(1), Hyderabad, Hyderabad

ITA 1570/HYD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6194 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 22-11-2016
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: J J VARUN
• Keywords: Principle of natural justice
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A (SMC), HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 1570/HYD/2016 ASSESSMENT YEAR: 2011-12 SRINIVASA RAVI KUMAR CHINTAGUNTA, HYDERABAD [PAN: ACWPC3226G] VS INCOME TAX OFFICER, WARD-11(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI J.J. VARUN, AR FOR REVENUE : SMT SUMAN MALIK, DR DATE OF HEARING : 24-01-2017 DATE OF PRONOUNCEMENT : 31-01-2017 O R D E R THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, HYDERABAD, DATED 31-08-2016. 2. BRIEFLY STATED, ASSESSEE IS IN THE BUSINESS OF RUNN ING A GAS STATION IN THE NAME OF M/S. SRI GANESH SERVICE STATION, BEING A DEALER OF INDIAN OIL. HE FILED HIS RETURN OF INCOME ADMITTING INCOME OF RS. 6,42,142/-. AS ASSESSEE DID NOT FURN ISH NECESSARY INFORMATION AND DID NOT APPEAR TO THE NOTICES ISSUED, AS SESSING OFFICER (AO) INVOKED THE PROVISIONS OF SECTION 144 OF THE INCOME TAX ACT [ACT] AND ESTIMATED THE INCOME AT 2.5% ON THE TO TAL SALES AND DETERMINED THE TOTAL INCOME AT RS. 34,19,022/-. EV EN THOUGH I.T.A. NO. 1570/HYD/2016 SRINIVASA RAVI KUMAR CHINTAGUNTA :- 2 - : ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A), TH E CIT(A) NOTICED THAT ASSESSEE DID NOT APPEAR FOR VARIOUS NOTIC ES ISSUED AS NOTED DOWN IN PARA 4 AND HAS ACCORDINGLY DISMISSED TH E APPEAL AS ASSESSEE FAILED TO SUBSTANTIATE HIS GROUNDS BY EITHER A PPEARING BEFORE THE CIT(A) OR BY FILING WRITTEN SUBMISSIONS. W HILE DISMISSING THE APPEAL FOR NON-APPEARANCE, LD.CIT(A) ALSO CONSIDERED THE ISSUE ON MERITS, UPHELD THE INVOCATION OF SECTION 144 FOR COMPLETING THE ASSESSMENT AND ALSO HELD THAT I N THE BUSINESS OF PETROL/OIL, THE NORMAL PERCENTAGE OF PROF IT RANGES BETWEEN 2.5% TO 5%. ACCORDINGLY, HE UPHELD THE ESTIM ATION OF PROFIT AT 2.5% ON SALES. 3. BEFORE ME, LD. COUNSEL FOR ASSESSEE HAS FILED AN AFFIDAVIT STATING THAT NONE OF THE NOTICES ISSUED BY THE LD.CIT(A) HAVE BEEN RECEIVED. IT WAS FURTHER SUBMITTED THAT ASSESSEE IS IN THE BUSINESS OF PETROLEUM PRODUCTS BEING A RETAIL DEALER OF INDIAN OIL AND FILED A LETTER FROM INDIAN OIL CORPORATION GIVING THE COMMISS ION RATES DURING THE YEAR 2011 AND SUBMITTED THAT THE GROSS COMMI SSION DOES NOT EXCEED MORE THAN 2% AND THEREFORE, ESTIMATION OF INCOME AT 2.5% BY THE AO IS NOT CORRECT. HE FURTHER SUBMITTED THAT THE CONSORTIUM OF INDIAN PETROLEUM DEALERS HAVE MADE RE PRESENTATION TO THE GOVERNMENT DT. 25-08-2015 WITH REFERENCE TO THE COMMISSION BEING EARNED AND ALSO REFERRED TO THE REPO RT OF APOORVA CHANDRA COMMITTEE ON RETAIL DEALERS COMMISSION DT. 14-01-2011 WHICH HAS BEEN ACCEPTED BY THE MINISTRY OF PETROLEUM, REFERRED TO IN THE SAID REPRESENTATION. 4. LD.DR HOWEVER, RELIED ON THE ORDERS OF THE AO AND CIT(A) TO SUBMIT THAT ASSESSEE HAS NOT FURNISHED ANY DETAILS AND HAS NO I.T.A. NO. 1570/HYD/2016 SRINIVASA RAVI KUMAR CHINTAGUNTA :- 3 - : RESPONSE TO THE NOTICES AND ACCORDINGLY, THE INCOME IS CORRECTLY ESTIMATED AT 2.5% ON THE SALES. 5. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES. WHILE THE REASON FOR NON-A PPEARANCE BEFORE THE AO SEEMS TO BE THAT ASSESSEE WAS TRYING FOR A LETTER FROM INDIAN OIL CORPORATION JUSTIFYING THE COMMISSION, THE NON- APPEARANCE BEFORE THE CIT(A) IS DUE TO NON-RECEIPT OF NOTICES. EVEN THOUGH LD.CIT(A) HAS LISTED OUT VARIOUS DATES ON WHICH NOTICES WERE ISSUED, LD. COUNSEL IN HIS AFFIDAVIT HAS CLEAR LY STATED THAT THEY HAVE NOT RECEIVED ANY OF THE NOTICES FOR APPEARING BEFORE THE LD.CIT(A). CONSIDERING THESE FACTS, I AM OF THE OPINI ON THAT THE ASSESSMENT OF ASSESSEE IS TO BE RESTORED TO THE FILE OF THE AO TO EXAMINE THE EARNING OF COMMISSION IN THE LIGHT OF THE LETTER ISSUED BY THE INDIAN OIL CORPORATION DT. 14-11-2016, WHEREIN COMMISSION FROM 16-01-2011 AND 01-07-2011 WAS SPECI FIED. HOWEVER, THE SAID LETTER DOES NOT COVER THE WHOLE PERIO D. ASSESSEE HAS TO JUSTIFY THE DETAILS OF COMMISSION RECEIVED FROM 01-04-2010 TO 31-03-2011 DURING THE FINANCIAL YEAR. MOREOVER, TH E PRICE PER LITRE STATED IN THE LETTER HAS TO BE VERIFIED WITH REFERE NCE TO THE QUANTITY OF THE PETROL/DIESEL AND OTHER PRODUCTS BEING SOLD BY ASSESSEE WHEREAS THE P&L A/C DOES NOT INDICATE THE QUA NTITATIVE DETAILS. IN VIEW OF THIS, I AM OF THE OPINION THAT THE EARNING OF COMMISSION AND CLAIM OF EXPENDITURE HAS TO BE EXAMINE D AFRESH. KEEPING THE PRINCIPLES OF NATURAL JUSTICE IN MIND, I HEREBY SET ASIDE THE ORDERS OF THE AO AND CIT(A) AND RESTORE THE ASSESSM ENT TO THE FILE OF THE AO, TO BE RE-DONE AS PER THE FACTS OF THE C ASE. ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY AND IN CASE ASSESSEE FAILS TO COMPLY WITH THE NOTICES, AO IS FREE TO ESTIMATE THE INCO ME BASED I.T.A. NO. 1570/HYD/2016 SRINIVASA RAVI KUMAR CHINTAGUNTA :- 4 - : ON THE FACTS. WITH THESE OBSERVATIONS, ASSESSEES GROU NDS ARE CONSIDERED ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2017 SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER HYDERABAD, DATED 31 ST JANUARY, 2017 TNMM COPY TO : 1. SRINIVASA RAVI KUMAR CHINTAGUNTA, HYDERABAD. C/O . KUMAR AND GIRI, CHARTERED ACCOUNTANTS, 8-2-686/B/1, 12 VYJAYANTHI, FLAT #3 & 4, 2 ND FLOOR, ROAD #12, BANJARA HILLS, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-11(1), HYDERABAD. 3. COMMISSIONER OF INCOME TAX(APPEALS)-5, HYDERABAD . 4. THE PR. COMMISSIONER OF INCOME TAX-5, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.