KASANA SANITATION PVT LTD,JAIPUR V. COMMISSIONER OF INCOME TAX, JAIPUR

ITA 396/JPR/2024

AI Insights

The case involves M/s. Kasana Sanitation Pvt. Ltd., which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, concerning an assessment made under sections 147, 144, and 144B of the Income Tax Act, 1961. The AO had issued a notice under section 148 due to non-filing of returns and discrepancies in reported income and contractual receipts. The assessee failed to comply with multiple notices, leading to an addition of Rs. 63,64,103 to their income. The CIT (A) upheld the AO's decision, prompting the assessee to appeal to the Tribunal. The Tribunal found the assessee's behavior during the proceedings to be improper and casual but allowed the appeal for statistical purposes to ensure a fair hearing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23919 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUP SINGH; LD
• Assessee Lawyers: S.L. JAIN; ASHOK KUMAR GUPTA
• Keywords: Opportunity of being heard; Principle of natural justice; Reason to believe
• Section: 148; 250

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH “B”, JAIPUR BEFORE Dr. S. SEETHALAKSHMI, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No. 396/JPR/2024 (A. Y. 2015-16) M/s. Kasana Sanitation Pvt. Ltd., P. No.-18, Rajeev Vihar Colony Gopal Pura by pass, Jaipur-302 015 PAN No.: AADCK 9638A ...... Appellant Vs. ITO, Ward 6(1), Jaipur ...... Respondent Appellant by : Mr. S. L. Jain, Mr. Ashok Kumar Gupta, Mr. Shrawan Kumar Gupta, Mr. Puneet Pareek, Advocates, Ld. ARs Respondent by : Mr. Anup Singh, Addl. CIT-DR, Ld. DR Date of hearing : 23/01/2025 Date of pronouncement : 21/02/2025 O R D E R PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of NFAC, Delhi dated 30.01.2024 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’). The assessee has raised the following grounds of appeal: - 1The Id. AO has grossly erred in law and facts in issuing notice u/s. 148 without having reason to believe that Income would have been escaped, without recording it and without taking proper sanction, without proper issuing/serving, without jurisdiction, barred by limitation, violation of principle of natural justice 2 and various other reasons therefore initiation as well as complete proceeding is illegal, invalid, bad in law and liable to be declared as null and void. 2. The Ld. AO has grossly erred in law and facts in making addition of Rs. 63,64,103/- without following due procedure of assessment proceeding as laid down under the statute and without issuing proper, specific and reasonable show cause notice to the assessee therefore complete addition should be deleted. 3. The Ld. AO has grossly erred in law and facts in making the addition of Rs. 63,64,103/- without considering the factual position as available on record and without taking such record in their true perspective and sense therefore complete addition should be deleted. 4. That the appellant reserved his right to add, amend, or alter the grounds of appeal on or before the date of appeal hearing, 5. under the facts and circumstances of the case, the Ld. AO not justified in charging interest u/s. 234A, 234B. 2. The brief facts of the case are that the assessee company was amongst the non-filers of return, it was observed by the department that the assessee company was in receipt of Rs. 4, 94, 22,886/- under the head contractual receipts. Accordingly, a notice u/s. 148 of the Act was issued and the assessee was asked to file the return. However, no return in response to the same was ever filed by the assessee. Notices were issued to the assessee through e-filing account of the assessee with the incometaxindiaefiling.gov.in. Portal of Income Tax Department alongwith the email ([e-mail] and [e-mail]) of the assessee registered with the department. Taking note of the continuous non- compliance from the assessee, case was marked to the verification unit for service of notice. But, there was no compliance made by the assessee. On perusal of the records it was observed by the AO that the assessee had uploaded Form No. 3CD, 3 P&L Account and Balance-Sheet for the year under consideration on 30.09.2015, but no return of income was filed. 3. As per the documents filed by the assessee its turnover was Rs. 4,44,22,200/-, meaning thereby there was a gap of Rs. 50,00,686/- (Rs. 4,94,22,886/- minus Rs. 4,44,22,200/-). The assessee shown profit of Rs. 13, 63,417/-, in its audited profit & loss account. The AO considered the figure of profit shown by the assessee and gap of Rs. 50,00,686/- and assessed the income u/s. 147 r.w.s. 144 and 144B of the Act at Rs. 63,64,103/- (Rs. 13,63,417/- plus Rs. 50,00,686/-). The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), who in turn disposed the appeal against the assessee by confirming the action of the AO. As here also on the designated dates, i.e. 15.03.2023, 29.03.2023, 03.05.2023 and 15.12.2023 the assessee never complied with the notices. Ultimately, a final opportunity was given vide notice dated: 19.01.2024, but still the assessee chosen not to comply and the appeal of the assessee was dismissed. The assessee being aggrieved with this order of the Ld. CIT (A) (For which the assessee itself was responsible) preferred the present appeal before us. 4. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee alongwith the grounds taken before us. It is observed that the behavior of the assessee before the AO and the Ld. CIT (A) was so improper and casual and the same can’t be appreciated at all. With reference to Ground Nos. 1 and 2, we have gone through the reports filed by the Ld. DR. before us vide office letter dated: 16.12.2024 and 15.01.2025 and found the same to be in order. In the light of the reports produced before us Ground Nos. 1 and 4 2 raised by the assessee are found to be baseless and frivolous, hence dismissed. Here we have duly considered the behavior of the assessee vis-à-vis grounds taken and found that it’s an attempt by the assessee to take undue advantage of the judicial procedure available under the law and the allegations against the authorities below are baseless and condemnable by the bench. 5. The case of the assessee was a simple matter of reconciliation of figures declared vis-à-vis as taken by the revenue from its own sources. Instead of participating in the proceedings, the assessee chosen to escape the same, at both the levels, i.e. before the AO and the Ld. CIT (A). It can be seen as a part of some strategy also in its favour adopted by the assessee. Even before us, the assessee is not able to substantiate its absence before the authorities below and rather vehemently arguing the matter on technicalities and not on the merits of the case. Again the behavior of the assessee is not at all appreciated by the Bench. Rather, in the guise of this appeal, the assessee tried to by-pass the whole procedure as defined in the law and certainly the bench can’t be instrumental to this attempt of the assessee. We do not find any flaw in the notice issued and procedure followed by the authorities below. The case laws relied upon by the assessee are not applicable to the facts of the case hence can’t be relied upon by us. 6. Still, in all fairness of the matter and following the principle that only real income should be taxed, we are restoring back the matter to the file of the AO with a direction that a proper opportunity of being heard be given to the assessee and the assessee is directed to be vigilant enough throughout the proceedings and actively participate the same without any excuse or adjournment. 5 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 21st day of January 2025. Sd/- Sd/- (Dr. S. SEETHALAKSHMI) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Jaipur, िदनांक/Dated: 21/02/2025 Copy of the Order forwarded to: 1. अपीलाथ\r/The Appellant , 2. \u000eितवादी/ The Respondent. 3. आयकर आयु\u0015 CIT 4. िवभागीय \u000eितिनिध, आय.अपी.अिध., Sr.DR., ITAT, 5. गाड\u001e फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, Jaipur Details Date Initials Designation 1 Draft dictated on PC on 21.02.2025 Sr.PS/PS 2 Draft Placed before author 21.02.2025 Sr.PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS/PS 7. File sent to the Bench Clerk Sr.PS/PS 8 Date on which the file goes to the Head clerk 9 Date of Dispatch of order "