DULAM PEDA TIRUPATHI RAO, ALAMURU MANDAL V. INCOME TAX OFFCER, WARD-1(4), Visakhapatnam

ITA 207/VIZ/2022

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The case involves Dulam Peda Tirupathi Rao, an individual engaged in the business of executing civil contracts, who appealed against the orders of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre (NFAC). The primary contention was the estimation of income at 20% of turnover as per Form 26AS, which the assessee argued was arbitrary and without basis, especially when the Act allows a profit percentage of 8% for the relevant assessment year. The Tribunal noted that the assessee had not received any notices during the assessment or appellate proceedings, which led to the decision to remit the matter back to the AO for a fresh assessment.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135899 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 21-02-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 19-10-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; TDS; FORM 26AS
• Section: 144

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ 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.205/Viz/2022 to 208/Viz/2022 (ननधधारण वर्ा / Assessment Year : 2015-16) Dulam Peda Tirupathi Rao D.No.1-117, Chemundulanka Alamuru Mandal East Godavari [PAN : AJKPD0253B] Vs. Income Tax Officer Ward-1(4) Visakhapatnam (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri C.Subrahmanyam, AR प्रत्यधथी की ओर से / Respondent by : Shri O.N.Hari Prasada Rao, DR सुनवधई की तधरीख / Date of Hearing : 22.02.2023 घोर्णध की तधरीख/Date of Pronouncement : 28.02.2023 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : These appeals are filed by the assessee against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC) in DIN & Order No.ITBA/N/NFAC/S/250/2022- 23/1044897691(1) dated 24.08.2022 for the A.Y.2015-16. Since the grounds raised in these appeals are identical, these appeals are clubbed, heard together and a common order is being passed for the sake of convenience as under. Facts are extracted from I.T.A. 205/Viz/2022. 2 I.T.A. No.205/Viz/2022 to 208/Viz/2022, A.Y.2015-16 Dulam Peda Tirupathi Rao, East Godavari 2. Brief facts of the case are that the assessee is an individual, having income from the business of execution of civil contracts, filed his return of income, declaring an income of Rs.7,15,890/-. The case of the assessee was selected for scrutiny under CASS and his income was estimated @20% on turnover as appearing in Form 26AS. The Assessing Officer (AO) completed the assessment u/s 144 of the Income Tax Act, (in short ‘Act’) and assessment order dated 29.12.2017 was passed, determining the income at Rs.23,86,850/-, which was served by affixture as the assessee is no longer living in that place. 3. On being aggrieved, the assessee preferred appeal before the CIT(A) and the Ld.CIT(A) upheld the order passed by the AO u/s 144 of the Act and dismissed the appeal of the assessee, holding that there was no compliance by the assessee either during the assessment proceedings or the appellate proceedings. During the assessment proceedings, it was noted by the AO that the assessee’s gross receipts as per Form 26AS stood at Rs.1,17,82,252/-, whereas, the assessee had shown the gross receipts of Rs.95,86,152/- in the return of income during the A.Y.2015- 16. Ld.CIT(A) further observed that, not only the assessee was required to maintain his books of accounts, but also get his accounts audited and submit the statutory audit report, as the gross receipts exceeded Rs.1 3 I.T.A. No.205/Viz/2022 to 208/Viz/2022, A.Y.2015-16 Dulam Peda Tirupathi Rao, East Godavari crore. However, the assessee neither furnished any of these during the assessment proceedings nor filed written submissions. Hence, the AO has rightly estimated the income @20% of the gross receipts as per 26AS which worked out to Rs.23,56,450/- and completed the assessment. 4. On being aggrieved, the assessee preferred appeal before the Tribunal and raised the following grounds : 1. The order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi is erroneous in law and contrary to the facts of the case. 2. The Commissioner of Income Tax (Appeals) (NFAC) is not justified in confirming the income determined of Rs.23,86,850/- u/s 144 of the Income Tax Act by the AO without appreciating the fact that the Assessing Officer is not justified in adopting the profit percentage @20% when the normal margins in this line of activity are much below. 3. The Commissioner of Income Tax (Appeals) (NFAC) is not justified in confirming the income determined u/s 144 of the Income Tax Act by the AO without appreciating the fact that there can be timing differences in reporting the turnover between turnover offered in Income Tax return and Form 26AS, as TDS deducted on advances also. 4. The Commissioner of Income Tax (Appeals) (NFAC) is not justified in confirming the income determined u/s 144 of the Income Tax Act by the AO without appreciating the fact that the Assessing Officer is not justified in adopting the profit percentage @20% which is very much on the higher side and also arbitrary. 5. The Commissioner of Income Tax (Appeals) (NFAC) is not justified in confirming the income determined u/s 144 of the Income Tax by the AO without appreciating the fact that the 4 I.T.A. No.205/Viz/2022 to 208/Viz/2022, A.Y.2015-16 Dulam Peda Tirupathi Rao, East Godavari Assessing Officer is not justified in adopting the profit percentage @20% of turnover without any basis when the Act allows the assessees to declare profit percentage @8% for the relevant assessment year. 6. The Commissioner of Income Tax (Appeals) (NFAC) is not correct in disposing of the appeals ex-parte stating that the appellant is non responsive, whereas the appellant submits that he has not received notices for hearing in order to enable him to submit the data. 7. For these and any other ground or grounds that may be urged at the time of hearing, it is prayed that the impugned order of the Commissioner of Income Tax (Appeals), (NFAC), Delhi may please be deleted. 5. Ground No.1 and 7 are general in nature which does not require specific adjudication. 6. Ground No. 2 to 6 are related to the estimation of income @20% on turnover as per Form 26AS. At the outset, the Ld.AR submitted that the Ld.CIT(A) is not justified in confirming the income estimated by the AO @20%, which is on higher side, without any basis when the Act allows the assessee’s to declare profit percentage @8% for the relevant assessment year. He further submitted that the Ld.CIT(A) is not justified in disposing the appeals ex-parte stating that the assessee is non responsive. The assessee has not received any notices for hearing and submit the data to substantiate his claim either during assessment proceedings or appellate proceedings. He therefore, pleaded to afford one 5 I.T.A. No.205/Viz/2022 to 208/Viz/2022, A.Y.2015-16 Dulam Peda Tirupathi Rao, East Godavari more opportunity of being heard for which the Ld.DR has not raised any objection. 7. We have heard both the parties and perused the material available on record. It is apparent from the records, that the assessee did not receive any notices issued by the AO.. The Ld.AR pleaded for one more opportunity of being heard to the assessee to substantiate his claim. The Ld.DR has not raised any objection. Hence, in order to meet the principles of natural justice, we are inclined to afford one more opportunity of being heard to the assessee. Therefore, we remit the matter back to the file of the AO with a direction to dispose off these appeals on merits. We also direct the assessee to cooperate with the revenue authorities and file relevant documents for adjudication. Hence, ground No.6 is allowed for statistical purposes. Therefore, the other grounds need no adjudication. 8. In the result, appeals of the assessee are allowed for statistical purpose. Order pronounced in the open court on 28 th February, 2023. Sd/- Sd/- (एस बालाकृ ष्णन) (द ु व्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated : 28.02.2023 L.Rama, SPS 6 I.T.A. No.205/Viz/2022 to 208/Viz/2022, A.Y.2015-16 Dulam Peda Tirupathi Rao, East Godavari आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee–Shri Dulam Peda Tirupathi Rao, D.No.1-117, Chemundulanka, Alamuru Mandal, East Godavari 2. रधजस्व/The Revenue –The Income Tax Officer, Ward-1(4), Visakhapatnam 3. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 4..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam