Rajeev Kumar,Lalbagh,Fatehganj, Faozabad-224001, Faizabad V. Income Tax Officer, Range-2, Faizabad, Fizabad

ITA 188/LKW/2023

AI Insights

The case involves five appeals filed by the assessee, Rajeev Kumar, against the orders of the ld. First Appellate Authority for the Assessment Years 2012-13 to 2016-17. The appeals were consolidated due to common issues raised across them, primarily concerning the ex parte orders passed by the ld. First Appellate Authority and the additions made by estimating extra sales and applying an estimated 8% G.P. rate. The assessee contended that the orders were passed without considering his adjournment requests and lacked incriminating material to justify the additions made. The Departmental Representative opposed the restoration of the appeals, arguing that the assessee had been given multiple opportunities to present his case. The Tribunal decided to restore the appeals, emphasizing the need for a decision on merits and providing the assessee a final opportunity to present his case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123095 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-08-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 15-06-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH “SMC”, LUCKNOW BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA Nos.187 to 191/LKW/2023 A.Ys. 2012-13 to 2016-17 The Income Tax Officer, Range-2, Faizabad. Vs. Rajeev Kumar, Lalbagh, Fatehganj, Faizabad-224001, U.P. PAN APFPK 5870A Shri Shubham Rastogi, C.A. Appellant by Shri Sanjeev Krishna Sharma, Addl. CIT (D.R.) Respondent by 14/08/2023 Date of hearing 22/08/2023 Date of pronouncement O R D E R The above captioned five appeals have been preferred by the assessee for Assessment Years 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17. Since all these appeals had common issues, they were heard together and they are being disposed off through this common order for the sake of convenience. 2. The grounds raised by the assessee in captioned appeals are as under: ITA No. 187/Lkw/2023 A.Y. 2012-13 “(1) The Ld. C.I.T. (A) erred on facts and in law in passing ex parte order on 27-4-23 without considering adjournment request filed by the assessee on 26-4-23 requesting adjournment upto 11-5-23, which is contrary to principle of natural justice. 2 ITA No. 187 to 191/Lkw/2023 (2) The Ld. C.I.T. (A) failed to appreciate that there was a reasonable cause for non-compliance of earlier notices issued as stated in appellate Order. (3) The Ld. CIT(A) erred on facts and in law making addition of Rs. 1,91,885/- by estimating extra sales &applying estimated 8% G.P. Rate without considering the settled legal position that in case of completed assessments no addition can be made sans incriminating document/ material. (4) The Ld. CIT(A) grossly erred in not considering that on the date of search i.e. 18.11.16, no assessment proceedings were pending and in absence of any incriminating material / documents / books of records /assets found during the search and seizure operation w r t A.Y. 2012-13, no addition can be made during assessment proceeding u/s 153A/143(3) of I. T. Act. (5) The Ld. A. O. failed to appreciate that reasons recorded u/s 153A of I.T. Act are solely on the basis of presumptions, assumptions and human probabilities without any incriminating seized material on record. Therefore, issuance of notice u/s 153A of I.T. Act subsequent assessment is also invalid. (6) The Ld. A. O. did not appreciate that in the statement recorded u/s 132(4) of I.T. Act by Assessee, had no where given any adverse statement in this regard. Accordingly, reasons recorded for issuance of notice are solely based on human conduct, preponderance of probabilities and presumptions and not on any incriminating material found during search as verifiable from records. (7) The Ld. A. O. failed to appreciate that Assessee is doing Petty business of sale of Seeds and Pesticides and during the assessment proceeding, the assessee submitted Stock details, Bank Account, Details of Sundry Creditors, Debtors, Purchases and Cash book and copy of VAT Return. However, Ld. A.O. rejected the same and estimated extra sale of Rs. 1,91,885/- by applying 8% G. P. Rate on estimate basis without any contrary evidence. Therefore, no addition can be made for Rs. 1,91,885/- as extra profit in the present sets of facts and circumstances. (8) The addition upheld are highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon by Ld. A. O.” 3 ITA No. 187 to 191/Lkw/2023 ITA No. 188/Lkw/2023 A.Y. 2013-14 “(1) The Ld. C.I.T. (A) erred on facts and in law in passing ex parte order on 27-4-2023 without considering adjournment request filed by the assessee on 26-4-2023 requesting adjournment upto 11-5-23, which is contrary to principle of natural justice. (2) The Ld. C.I.T. (A) failed to appreciate that there was a reasonable cause for non-compliance of earlier notices issued as stated in appellate Order. (3) The Ld. CIT(A) erred on facts and in law making addition of Rs. 2,94,537/- by estimating extra sales & applying estimated 8% G.P. Rate without considering the settled legal position that in case of completed assessments no addition can be made sans incriminating document/ material. (4) The Ld. CIT(A) grossly erred in not considering that on the date of search i.e. 18.11.16, no assessment proceedings were pending and in absence of any incriminating material / documents / books of records /assets found during the search and seizure operation w r t A.Y. 2013-14, no addition can be made during assessment proceeding u/s 153A/143(3) of I.T. Act. (5) The Ld. A. O. did not appreciate that in the statement recorded u/s 132(4) of I.T. Act by Assessee, had no where given any adverse statement in this regard. Accordingly, reasons recorded for issuance of notice are solely based on human conduct, preponderance of probabilities and presumptions and not on any incriminating material found during search as verifiable from records. (6) The Ld. A. O. failed to appreciate that Assessee is doing Petty business of sale of Seeds and Pesticides and during the assessment proceeding, the assessee submitted Stock details, Bank Account, Details of Sundry Creditors, Debtors, Purchases and Cash book and copy of VAT Return. However, Ld. A.O. rejected the same and estimated extra sale of Rs. 2,49,537/- by applying 8% G. P. Rate on estimate basis without any contrary evidence. Therefore, no addition can be made for Rs. 2,49,537/- as extra profit in the present sets of facts and circumstances. (7) The addition upheld are highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon by Ld. A. O.” 4 ITA No. 187 to 191/Lkw/2023 ITA No. 189/Lkw/2023 A.Y. 2014-15 “(1) The Ld. C.I.T. (A) erred on facts and in law in passing ex parte order on 27-4-2023 without considering adjournment request filed by the assessee on 26-4-2023 requesting adjournment upto 11-5-2023, which is contrary to principle of natural justice. (2) The Ld. C.I.T. (A) failed to appreciate that there was a reasonable cause for non-compliance of earlier notices issued as stated in appellate Order. (3) The Ld. CIT(A) erred on facts and in law making addition of Rs. 2,65,719/- by estimating extra sales &applying estimated 8% G.P. Rate without considering the settled legal position that in case of completed assessments no addition can be made sans incriminating document/ material. (4) The Ld. CIT(A) grossly erred in not considering that on the date of search i.e. 18.11.16, no assessment proceedings were pending and in absence of any incriminating material / documents / books of records /assets found during the search and seizure operation w r t A.Y. 2014-15, no addition can be made during assessment proceeding u/s 153A/143(3) of I.T. Act. (5) The Ld. A. O. failed to appreciate that reasons recorded u/s 153A of I.T. Act are solely on the basis of presumptions, assumptions and human probabilities without any incriminating seized material on record. Therefore, issuance of notice u/s 153A of I.T. Act subsequent assessment is also invalid. (6) The Ld. A. O. did not appreciate that in the statement recorded u/s 132(4) of I.T. Act by Assessee, had no where given any adverse statement in this regard. Accordingly, reasons recorded for issuance of notice are solely based on human conduct, preponderance of probabilities and presumptions and not on any incriminating material found during search as verifiable from records. (7) The Ld. A. O. failed to appreciate that Assessee is doing Petty business of sale of Seeds and Pesticides and during the assessment proceeding, the assessee submitted Stock details, Bank Account, Details of Sundry Creditors, Debtors, Purchases and Cash book and copy of VAT Return. However, Ld. A.O. rejected the same and estimated extra sale of Rs. 2,65,719/- by applying 8% G. P. Rate on estimate basis without any contrary evidence. Therefore, no addition can be made for Rs. 2,65,719/- as extra profit in the present sets of facts and circumstances. 5 ITA No. 187 to 191/Lkw/2023 (8) The addition upheld are highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon by Ld. A. O.” ITA No. 190/Lkw/2023 A.Y. 2015-16 “(1) The Ld. C.I.T. (A) erred on facts and in law in passing ex parte order on 27-4-2023 without considering adjournment request filed by the assessee on 26-4-2023 requesting adjournment upto 11-5-2023, which is contrary to principle of natural justice. (2) The Ld. C.I.T. (A) failed to appreciate that there was a reasonable cause for non-compliance of earlier notices issued as stated in appellate Order. (3) The Ld. CIT(A) erred on facts and in law making addition of Rs. 2,98,673/- by estimating extra sales &applying estimated 8% G.P. Rate without considering the settled legal position that in case of completed assessments no addition can be made sans incriminating document/ material. (4) The Ld. CIT(A) grossly erred in not considering that on the date of search i.e. 18.11.16, no assessment proceedings were pending and in absence of any incriminating material / documents / books of records /assets found during the search and seizure operation w r t A.Y. 2015-16, no addition can be made during assessment proceeding u/s 153A/143(3) of I.T. Act. (5) The Ld. A. O. failed to appreciate that reasons recorded u/s 153A of I.T. Act are solely on the basis of presumptions, assumptions and human probabilities without any incriminating seized material on record. Therefore, issuance of notice u/s 153A of I.T. Act subsequent assessment is also invalid. (6) The Ld. A. O. did not appreciate that in the statement recorded u/s 132(4) of I.T. Act by Assessee, had no where given any adverse statement in this regard. Accordingly, reasons recorded for issuance of notice are solely based on human conduct, preponderance of probabilities and presumptions and not on any incriminating material found during search as verifiable from records. (7) The Ld. A. O. failed to appreciate that Assessee is doing Petty business of sale of Seeds and Pesticides and during the assessment proceeding, the assessee submitted Stock details, Bank Account, Details of Sundry Creditors, Debtors, Purchases and Cash book and 6 ITA No. 187 to 191/Lkw/2023 copy of VAT Return. However, Ld. A.O. rejected the same and estimated extra sale of Rs. 2,98,673/- by applying 8% G. P. Rate on estimate basis without any contrary evidence. Therefore, no addition can be made for Rs. 2,98,673/- as extra profit in the present sets of facts and circumstances. (8) The addition upheld are highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon by Ld. A. O.” ITA No. 191/Lkw/2023 A.Y. 2016-17 “(1) The Ld. C.I.T. (A) erred on facts and in law in passing ex parte order on 27-4-2023 without considering adjournment request filed by the assessee on 26-4-2023 requesting adjournment upto 11-5-2023, which is contrary to principle of natural justice. (2) The Ld. C.I.T. (A) failed to appreciate that there was a reasonable cause for non-compliance of earlier notices issued as stated in appellate Order. (3) The Ld. CIT(A) erred on facts and in law making addition of Rs. 2,37,187/- by estimating extra sales &applying estimated 8% G.P. Rate without considering the settled legal position that in case of completed assessments no addition can be made sans incriminating document/ material. (4) The Ld. CIT(A) grossly erred in not considering that on the date of search i.e. 18.11.2016, no assessment proceedings were pending and in absence of any incriminating material / documents / books of records /assets found during the search and seizure operation w r t A.Y. 2016-17, no addition can be made during assessment proceeding u/s 153A/143(3) of I.T. Act. (5) The Ld. A. O. failed to appreciate that reasons recorded u/s 153A of I.T. Act are solely on the basis of presumptions, assumptions and human probabilities without any incriminating seized material on record. Therefore, issuance of notice u/s 153A of I.T. Act subsequent assessment is also invalid. (6) The Ld. A. O. did not appreciate that in the statement recorded u/s 132(4) of I.T. Act by Assessee, had no where given any adverse statement in this regard. Accordingly, reasons recorded for issuance of notice are solely based on human conduct, preponderance of 7 ITA No. 187 to 191/Lkw/2023 probabilities and presumptions and not on any incriminating material found during search as verifiable from records. (7) The Ld. A. O. failed to appreciate that Assessee is doing Petty business of sale of Seeds and Pesticides and during the assessment proceeding, the assessee submitted Stock details, Bank Account, Details of Sundry Creditors, Debtors, Purchases and Cash book and copy of VAT Return. However, Ld. A.O. rejected the same and estimated extra sale of Rs. 2,37,187/- by applying 8% G. P. Rate on estimate basis without any contrary evidence. Therefore, no addition can be made for Rs. 2,37,187/- as extra profit in the present sets of facts and circumstances. (8) The addition upheld are highly excessive, contrary to the facts, law and principle of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon by Ld. A. O.” 3. At the outset, the ld. counsel for the assessee submitted that in all the five appeals, the ld. First Appellate Authority had passed ex-parte orders on 27.04.2023 rejecting assessee’s request for adjournment upto 11.05.2023. The ld. Authorized Representative drew my attention to the copy of adjournment request in all the five appeals which was filed on the Income Tax Portal and submitted that the impugned orders were passed on 27.04.2023 without even mentioning that the assessee had prayed for adjournment on that date. It was submitted that the assessee was denied the valuable right to present his case and, therefore, the impugned orders passed behind the back of the assessee were bad in law. The ld. Authorized Representative prayed that the appeals be restored to the Office of the Ld. First Appellate Authority so that the assessee is provided with an opportunity to present his case. 8 ITA No. 187 to 191/Lkw/2023 4. Per contra, the ld. Senior Departmental Representative vehemently opposed the prayer for restoration of the appeals to the ld. First Appellate Authority. He submitted that the ld. First Appellate Authority had afforded as many as five opportunities to the assessee to present his case and, therefore, the claim of the assessee that opportunity has not been afforded to the assessee by the ld. First Appellate Authority, was factually incorrect. 5. I have heard the rival submissions and have also gone through the record. I agree with the contention advanced by the ld. Departmental Representative that the assessee had been afforded several opportunities by the ld. First Appellate Authority to present his case, which were not availed by the assessee. All the same, the facts remains that the ld. First Appellate Authority has only upheld the findings given by the Assessing Officer without going into the merits of the appeals before him. It is settled law that even in absence of any assistance from the side of the assessee, the ld. First Appellate Authority is bound to decide the issues before him on merits. Therefore, on the facts of this case, I deem it appropriate to restore all the five appeals to the Office of the ld. First Appellate Authority with a direction to provide one last opportunity to the assessee to present his case. We also caution the assessee to fully avail this opportunity of representation and submit evidences, etc. before the 9 ITA No. 187 to 191/Lkw/2023 ld. First Appellate Authority whenever called upon to do so, failing which, the ld. First Appellate Authority shall be at liberty to decide the issues on merits in accordance with law, even if it is ex-parte qua the assessee. The assessee will have the liberty to raise all legal grounds as well as grounds on merits which he may deem fit before the ld. First Appellate Authority. 6. In the final result, all the five appeals filed by the assessee stands allowed for statistical purposes. (Order pronounced in the open court on 22/08/2023) Sd/- (SUDHANSHU SRIVASTAVA) JUDICIAL MEMBER Aks – Dtd. 22/08/2023 Copy of order forwarded to: (1) The appellant (2) The respondent (3) Commissioner (4) Departmental Representative (5) Guard File By order Assistant Registrar