AMRESH KUMAR, PATNA V. ACIT, CIRCLE-1, PATNA

ITA 197/PAT/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0226 (ITAT-PATNA)
• Duration Of Justice: 3 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 16-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Reasonable cause; Time period of passing order; Capital expenditure; Set aside
• Section: 144; 142(1); 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA ‘DB’ BENCH AT KOLKATA [Virtual Court] Before SRI MANISH BORAD, ACCOUNTANT MEMBER & SRI SONJOY SARMA, JUDICIAL MEMBER I.T.A. No.: 197/Pat/2019 Assessment Year: 2015-16 Amresh Kumar........................................................Appellant [PAN: AONPK 0605 C] Vs. ACIT, Circle-1, Patna............................................Respondent Appearances by: None appeared on behalf of the Assessee. Sh. Rupesh Agrawal, Sr. D/R, appeared on behalf of the Revenue. Date of concluding the hearing : July 18 th , 2022 Date of pronouncing the order : July 25 th , 2022 ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2015-16 is directed against the order passed u/s 250(6) of the Income Tax Act, 1961 (in short the “Act”) by ld. Commissioner of Income-tax (Appeals)-1, Patna [in short ld. “CIT(A)”] dated 31.08.2018 which is arising out of the assessment order framed u/s 143(3)/144 of the Act dated 31.12.2017. I.T.A. No.: 197/Pat/2019 Assessment Year: 2015-16 Amresh Kumar. Page 2 of 7 2. The assessee is in appeal before this Tribunal raising the following grounds: “1. For that the Learned Commissioner of Income Tax Appeal-1, Patna erred and passed the impugned order under section 250 of Income Tax Act 1961 on 31/07/2018 and confirmed the addition of assessing officer Rupees 44,18,400/- in the declared income of appellant Rupees 4,61,200/- (As per Audited Books of Account) in the assessment year 2015-16 are bad in law and on facts of the case, for want of Jurisdiction and various other reasons and hence the same kindly be deleted. And directed to appellant to pay tax with interest Rupees 20,62,700/-. Appellant was/is dealer of Hero Motorcycle Ltd under the name M/s Shubham Automobiles. 2. For that the learned Commissioner of Income Tax Appeal-1, Patna deemed that the notice under section 143(2) served to the assessee within prescribed limitation without any corroborative evidence. It is admitted by the assessing officer that appellant filed his return on 22/12/2016 and notice under Section 143(2), issued on 26/09/2017 and served to the appellant 05/10/2017. Under the law the provision is No notice under section 143(2) shall be served on the assessee after the expiry of six months from the end of financial year in which return is furnished. 3. For that learned Commissioner of Income Tax Appeal-1 erred and has without perusal of the books of account of appellant and audit report accept net income @8% on gross receipt, it is settled provision that any expenditure not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of appellant /assessee laid out expended for the purpose of the business shall be allowed in computing the income under the head profit from business and profession. But did not considered. 4. For that against the impugned order of CIT Appeal-1 assessee filed civil writ petition before the Hon'ble High Court Patna. By order dated 14/05/2019 has directed to file appeal before the Learned Income Tax Appellate Tribunal, Patna, Bihar within 30 days of receipt of a copy of order and condone the delay. 5. For that Learned Assessing Officer has attached the business bank account of appellant. That hamper the business goodwill and credibility of the appellant in the market and company. I.T.A. No.: 197/Pat/2019 Assessment Year: 2015-16 Amresh Kumar. Page 3 of 7 6. That the appellant craves the leave of the appellate Jurisdiction to add, alter and withdraw any or all ground before or during the hearing. It is, therefore, Your Honour may be pleased to admit this appeal and set aside the impugned order of assessing officer. And Be accepted the declared income of appellant in the return of assessment year 2015-16. And passed the order to release the ceased bank account of appellant. And Be passed such order or orders as your Honour consider fit and proper in interest of Justice. And Be passed the stay order of penalty and demand till the disposal of the appeal” 3. When the case was called for, none appeared on behalf of the assessee. A perusal of the records shows that a number of opportunities have been given to the assessee but there is no compliance. It seems that the assessee is not interested to pursue the appeal and, therefore, we decide to adjudicate the appeals with the assistance of ld. D/R and the available records. 4. Brief facts of the case are that the assessee is an individual and as per the assessment order the assessee is stated to be engaged in medical business. Income of Rs. 4,61,200/- declared in the return filed on 22.12.2016. Case selected for scrutiny through CASS to examine large cash deposit. As per the assessment order the notice u/s 143(2) of the Act was issued on 26.09.2017 and served upon the assessee followed by a notice u/s 142(1) of the Act. On the scheduled dates the assessee appeared and submitted I.T.A. No.: 197/Pat/2019 Assessment Year: 2015-16 Amresh Kumar. Page 4 of 7 a copy of income tax return and sale invoices. Ld. AO observed that the assessee has purchased motor bikes from Patliputra Automobiles (Authorised dealer of Hero MotoCorp Ltd.). On the basis of information collected from Patliputra Automobiles, ld. AO observed that the assessee has purchased goods worth Rs. 5,89,82,148/- during the FY 2014-15. As per ld. AO as the assessee has suppressed the said transaction in the return filed by it, he framed the best judgment assessment u/s 144 of the Act by applying net profit rate @ 8% on the goods purchased from Patliputra Automobiles making the addition of Rs. 47,18,572/- and assessing the income at Rs. 48,79,600/- 5. Aggrieved, the assessee preferred appeal before ld. CIT(A) challenging the validity of the assessment proceedings on the ground that the notice u/s 143(2) of the Act was not served within the limitation period and also challenged the additions of net profit on estimated basis made by the ld. AO. Ld. CIT(A) dismissed the legal grounds raised by the assessee referring to various judicial precedence and as per merits of the case are concerned confirmed the action of ld. AO as no credible evidence of sales were brought on record. 6. Aggrieved, the assessee is now in appeal before this Tribunal. None appeared on behalf of the assessee. However, ld. D/R vehemently argued supporting the orders of both the parties. 7. We have heard rival contentions and perused the records placed before us. I.T.A. No.: 197/Pat/2019 Assessment Year: 2015-16 Amresh Kumar. Page 5 of 7 8. As regards the legal issue raised by the assessee that notice u/s 143(2) of the Act was not served upon the assessee within the prescribed time limit, we note that in the grounds, the assessee has mentioned that the notice u/s 143(2) of the Act was issued on 26.09.2017 and served upon the assessee on 05.10.2017. However, no credible evidence is available on record to examine this fact that when the notice was actually served upon the assessee. No paperbook has been filed by the assessee in this regard. As regards the finding of ld. CIT(A) on this issue is concerned, the same is only on the date of issuance of notice and has observed that the date of issue of notice is to be considered as compliance of the requirement of proviso 2 to Section 143 of the Act. We, however, are of the considered view that the date of serving of the notice u/s 143(2) of the Act is crucial and this fact needs to be examined as to whether the notice u/s 143(2) of the Act was duly served upon the assessee as per the provisions of the Income Tax Act within the limitation period. We, therefore, restore this issue to ld. CIT(A) with the direction to the assessee to furnish necessary evidences to prove the actual date of serving of notice and ld. CIT(A) should also examine this aspect by calling the remand report from the ld. AO. Thus, the legal issue raise by the assessee in this instant appeal in ground no. 2 is allowed for statistical purposes. 9. As regards the grounds raised on merits about the estimation of net profit @ 8% on the purchases of Rs. 5,89,82,148/- of motor cycles purchased from Patliputra Automobiles, we find that the total facts are missing on record. Ld. AO stated that the assessee I.T.A. No.: 197/Pat/2019 Assessment Year: 2015-16 Amresh Kumar. Page 6 of 7 is engaged in medical business. The information received by the ld. AO shows that the assessee deals in purchase and sale of motor cycles. Neither the financial statement nor the audit report is available on record. Even before ld. CIT(A), credible evidence could not be filed regarding sales of such motor cycles alleged to be purchased by the assessee. Complete transaction of purchase and sale of motor cycles needs to be examined. We, thus, restore the issue on merit also to ld. CIT(A) who shall call for the remand report from the ld. AO, if needed, and also call for the necessary information from the assessee including the financial statements, audit report (if any), purchase and sale documents etc. We also direct the assessee to remain vigilant to comply to the notice of hearing issued by ld. CIT(A) and furnish all the necessary details on the first date of hearing itself or on the next hearing date if prevented by reasonable cause. Thus, grounds raised on merits in ground nos. 1 & 3 are also allowed for statistical purposes. 10. As regards ground no. 4 raised by the assessee stating that the civil writ petition was filed before the Hon’ble jurisdictional High Court and by order dated 14.05.2019 the Hon’ble Court has directed the assessee to file the appeal before this Tribunal and condoned the delay in filing such appeal, we find that the Registry has duly taken note of the direction of the Hon’ble jurisdictional High Court and has not issued any notice to the assessee for the delay in filing the appeal before this Tribunal. Since there is no delay in filing this appeal as the assessee has duly complied to the directions of the Hon’ble Court, ground no. 4 raised by the assessee becomes infructuous. I.T.A. No.: 197/Pat/2019 Assessment Year: 2015-16 Amresh Kumar. Page 7 of 7 11. Other grounds raised in this instant appeal are general in nature which need no adjudication. 12. In the result, appeal filed by the assessee is partly allowed for statistical purposes. Kolkata, the 25 th July, 2022. Sd/- Sd/- [Sonjoy Sarma] [Manish Borad] Judicial Member Accountant Member Dated: 25.07.2022 Bidhan (P.S.) Copy of the order forwarded to: 1. Amresh Kumar, Ground Floor, Kumar Complex, Bihta, Patna-801 103. 2. ACIT, Circle-1, Patna. 3. CIT(A)-1, Patna. 4. CIT- 5. CIT(DR), Patna Bench, Patna. True copy By order Assistant Registrar ITAT, Kolkata Benches Kolkata