Income Tax Officer, Ward-3(4), Raipur V. Mesers Mahendra Travels, Raipur

ITA 229/RPR/2019

AI Insights

The case involves the Income Tax Officer, Ward 3(4), Raipur as the appellant and M/s Mahendra Travels as the respondent. The dispute arose from the assessment year 2014-2015, where the Income Tax Officer estimated the taxable income of M/s Mahendra Travels at \\u20b930,000,000 due to the non-production of books of accounts by the assessee, who claimed that all records were seized during a survey. The Commissioner of Income Tax (Appeals) later overturned this estimation after the assessee produced the books of accounts, which were not available to the Assessing Officer during the initial assessment. The Revenue challenged this decision, alleging a contravention of rule 46A of the Income Tax Rules, 1963, as the additional evidence was admitted without giving the Assessing Officer a chance to examine it.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 136330 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-11-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 24-11-2019
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1963
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Additional evidence
• Section: 143(3); 143(1); 250

Judgement Text

॥ आयकर अपीलीय न्यायाधिकरण, रायपुर न्यायपीठ, रायपुर में ॥ (Through Virtual Hearing) ITAT-Raipur Page 1 of 6 IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, AT RAIPUR BEFORE HON’BLE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपऩलसं. / ITA No.229/RPR/2019 निर्धारण वर्ा / Assessment Year : 2014-2015 Income Tax Officer, Ward 3(4), Raipur . . . . . . . अपऩलधथी / Appellant बनाम / V/s. M/s Mahendra Travels Shop No-52, Hira Arcade, Pandri, Raipur (C.G.) . . . . . . .प्रत्यथी / Respondent द्वारा / Appearances Assessee by : None for the Assessee Revenue by : Shri Debashish Lahiri सपिवधई की तधरऩख / Date of conclusive Hearing : 10/11/2022 घोर्णध की तधरऩख / Date of Pronouncement : 10/11/2022 आदेश / ORDER PER G. D. PADMAHSHALI, AM; The Revenue alleging contravention of rule 46A of Income Tax Rules, 1963 [for short “IT-Rules”] challenges the order of Commissioner of Income Tax (Appeals), Raipur [for short “CIT(A)”] dt. 06/08/2019 passed u/s 250 of the Income-tax Act, 1961 [for short “the Act”] granting relief against the order of assessment passed u/s 143(3) by the Income Tax Officer, Ward-3(4) Raipur [for short “AO”]. M/s Mahendra Travels ITA No.229/RPR/2019 AY 2014-15 ITAT-Raipur Page 2 of 6 2. Before coming to facts, its apposite to state that, the grounds raised in the present appeal are inconsonance with rule 8 of Income Tax Appellate Tribunal Rules, 1963 [for short “ITAT Rules”], however for the purpose of adjudication, it shall suffice to articulate that, the substantive ground is directed against deletion of estimated income and on legal count, contravention of rule 46A of IT-Rules is alleged. 3. Briefly stated the facts borne out of the records are; 3.1 The assessee is partnership firm engaged in providing bus transport services, has for AY e-filed its “NIL” return of income on 29/11/2014 which was processed initially summarily u/s 143(1) of the Act and then subsequently selected for scrutiny u/s 143(2) of the Act. During the course of assessment proceedings, the respondent failed to produce books of accounts stating that, the all the records were seized by the department in the course of survey action taken placed on 16/11/2016, per contra on the verification the Ld. AO found that, no M/s Mahendra Travels ITA No.229/RPR/2019 AY 2014-15 ITAT-Raipur Page 3 of 6 records pertaining the impugned assessment year were seized by the department. In the event of continual failure to place records for assessment, the Ld. rejecting the books of accounts maintained (if any) estimated the taxable income at ₹3,22,00,000/- in the light of information available on record. 3.2 In an appeal before the first appellate authority [for short “FAA”], the assessee produced the books of accounts based on which the Ld. CIT(A) overturned the assessment finding on merits or basis in the estimation arrived by the Ld. AO. 3.3 The appellant revenue aggrieved by the aforesaid relief challenged the action of Ld. FAA on legal as well meritare grounds such as; a. Contravention of rule 46A of the IT-Rules, b. Failure to appreciate the facts and circumstances of the case in the event of rejection of books etc. and fails claim made by the appellant. M/s Mahendra Travels ITA No.229/RPR/2019 AY 2014-15 ITAT-Raipur Page 4 of 6 4. When the matter was called up for hearing, none represented the assessee, mindful to the conduct of the appellant showing no appearance on many occasions, in the interest of justice we proceeded to adjudicate following rule 25 of the ITAT-Rules, which empowers this Tribunal to decide the appeal ex–parte on merits where the respondent does not appear in person or through an authorised representative and the same is done placing on record a no-objection from the appellant revenue. It is needless to mention that, the proviso to the said rule carves out an exception by empowering the Tribunal to recall the ex–parte order, if the respondent appears afterwards and satisfies placing evidential material before the Tribunal that, there was sufficient cause for his non– appearance when the appeal was called for hearing and in the event of failure to substantiate the non- appearance, the recall entitlement dries out. 5. We have heard the rival contentions of both the parties; and subject to the provisions of rule 18 of “ITAT Rules”, perused the material placed on record, M/s Mahendra Travels ITA No.229/RPR/2019 AY 2014-15 ITAT-Raipur Page 5 of 6 case laws relied upon by the appellant as well the respondent and duly considered the facts of the case in the light of settled legal position forewarned to parties present. 6. Apparently from para 2.3 placed at page 3 of the first appellate order, we observed that, the Ld. CIT(A) admitted the additional evidence placed first time during appellate proceedings without same being forwarded to Ld. AO while calling for remand report, consequently the proceedings were found completed without according other party an opportunity to verify the contents and put forth the comments thereon. Nota bene, sub-rule 3 of 46A interdict the Ld. FAA from taking into account any evidence produced first time before him unless the assessing officer has had a reasonable opportunity of examining such evidence and rebut the same, which in the present case has not been complied with. Admittedly there is nothing in the order of the Ld. CIT(A) to showcase that, the Ld. AO was confronted with books of accounts, vouchers and bills etc., and asked for comments, thus, the end M/s Mahendra Travels ITA No.229/RPR/2019 AY 2014-15 ITAT-Raipur Page 6 of 6 result is that additional evidence accepted & admitted as genuine without the comments vis-à-vis verification from the Ld. AO in violation of indispensable requirement, for the reason we restored the matter back to the Ld. CIT(A) with the direction to comply with sub-rule (3) of Rule 46A and respondent is also directed to comply with consequential remand proceedings without seeking any unreasoned adjournment. 7. Resultantly, the appeal of the appellant is ALLOWED FOR STATISTICAL PURPOSE in above terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Thursday 10 th day of November, 2022. -S/d- -S/d- RAVISH SOOD G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 13 th day of December, 2022. आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT, Raipur (C.G.-India) 4. The CIT(A), Raipur (C.G.-India) 5. DR, ITAT, Raipur Bench, Raipur. 6. ग र्डफ़ इल / Guard File. आिेश नुस र / By Order, वररष्ठदनजीसदिव / Sr. Private Secretary आयकरअपीलीय न्य य दिकरण, पुणे / ITAT, Pune.