MAHAMAD AMIR UDDIN,NAGAON V. NFAC, INCOME TAX DEPARTMENT

ITA 58/GTY/2024

AI Insights

The case involves appeals by Mahamad Amir Uddin against the orders of the National Faceless Appeal Centre, Delhi, which arose from the assessment orders under Section 143(3) of the Income-tax Act, 1961, and subsequent penalties under sections 271(1)(c) and 271B. The primary contention was regarding the estimation of net profit on undisclosed sales and the penalties for not auditing books of accounts and for concealment of income. The Tribunal noted the absence of the assessee's representation and proceeded with the hearing based on the Departmental Representative's arguments and the available records. The Tribunal found that the AO's estimation of profit at 30% on undisclosed sales lacked a binding precedent and directed a re-assessment after providing the assessee an opportunity to present relevant documents.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 39532 (ITAT-GUWAHATI)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-08-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 23-03-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 148; 143(3); 271(1)(c); 44AD; 44AB; 271B

Judgement Text

" आयकर अपीलीय अधिकरण न्यायपीठ, गुवाहाटी । IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER & SHRI MANOMOHAN DAS, JUDICIAL MEMBER I.T.A. Nos. 57, 58 & 59/GTY/2024 (Assessment Year: 2013-14) Mahamad Amir Uddin, Thakurbari Road Nagaon, Haibargaon, PIN-782002, Assam PAN No. ACOPU2470Q Vs. Assessing Officer National Faceless Assessment Centre, Income Tax Department Aaykar Bhavan, GS Road, PIN-781005 Assam अपीलार्थी/ (Appellant) प्रत् यर्थी/ (Respondent) Assessee by : None Revenue by : Shri PS Themreikan, DR सुनवाई की तारीख/Date of Hearing 29.08.2024 घोषणा की तारीख /Date of Pronouncement 17.10.2024 O R D E R PER DR. MANISH BORAD, AM: These appeals at the instance of the assessee are directed against the orders of National Faceless Appeal Centre, Delhi [the learned CIT (A)] dated 31.10.2023 & 10.01.2024, which are arising out of the assessment orders under Section 143(3) of the Income- tax Act, 1961 (the Act) dated 16.03.2022. The penalties were levied by ITO, Ward-Nagaon under section 271(1)(c) & 271B of the Income-tax Act, 1961 (the Act) vide order dated 02.09.2022. Page | 2 ITA Nos. 57, 58 & 59/GTY/2024 Mahamad Amir Uddin; A.Y. 2013-14 02. When the case called for, none appeared on behalf of the assessee. Registry has informed that the notice has been sent through RPAD. We therefore proceed to adjudicate the appeal with the assistance of ld. DR and materials available on record. 03. In ITA No. 57/GTY/2024, assessee has challenged the action of ld. CIT (A) estimating the net profit at the rate of 30% of undisclosed sales of ₹93,34,380/-. In ITA No.58/GTY/2024, assessee challenge the levy of penalty u/s 271B of the Act for failing to get the books of accounts audited u/s 44AB of the Act. In ITA No.59/GhY/2024, assessee is aggrieved with the levy of penalty u/s 271(1)(c) of the Act at ₹10,81,788/-. 04. The ld. Departmental Representative (DR) vehemently argued and supported the order of the ld. lower authorities. 05. We have heard the ld. DR and perused the records available on record. As per ITA No.57/GTY/2024 is concerned, we notice that the assessee is an individual engaged in jute business and filed return of income for A.Y. 2013-14, declaring at ₹3,06,422/- in the return filed manually. During the year, there is RTGS of ₹1.27 crore and cash deposit of ₹5,000/- in the bank account held by the assessee. Based on this information, case of the assessee was reopened by issuance of notice u/s 148 of the Act to carry out the assessment proceedings. Assessee did not appear before ld. CIT (A) to give any explanation. The ld. AO based on the information appearing in the bank statement concluded that the credit amount of ₹1.27 crore in the bank account is of undisclosed jute sales and accordingly, estimated the profit at the rate of 30% at ₹38,10,000/- and assessed the income at ₹40,85,100/- and also initiated the penalty proceedings u/s 271B, 271A and 272A(1)(b) of the Act. When the assessee challenges the addition made by the ld. AO Page | 3 ITA Nos. 57, 58 & 59/GTY/2024 Mahamad Amir Uddin; A.Y. 2013-14 before the ld. CIT (A), he filed written submission but did not place any other documents to explain the source of credit entries in the bank account. The ld. CIT (A) gave part relief to the assessee observing that the assessee had declared turnover of ₹33,65,620/- in its income tax return and therefore, out of the alleged undisclosed sales of ₹1.27 crores, the assessee deserves to get the benefit of declared turnover and accordingly, directed the ld. AO to make the addition only for the net profit at the rate of 30% of the remaining undisclosed sales of ₹93,24,380/-. 06. We observe that assessee did not appear before the ld. AO and it is a best judgement assessment. We also notice that assessee has filed the income tax return and is engaged in the jute business. The profit declared by the assessee in its return is under Section 44AD of the Act and same is approximately 8.40%. We firstly find that in absence of complete details, the ld. AO has treated the total credits in the bank account as sales and consequently, the ld. AO has estimated the addition at much higher rate of 30% without placing any other binding precedence of any jute trader of having earned net profit rate of 30%. 07. Under these given facts and circumstances, we deem it appropriate to restore the matter to the ld. AO for denovo adjudication of the issue raised before us. We direct the ld. AO to provide reasonable opportunity to the assessee to facilitate him in filing the relevant documents in support of his sales and also to explain the source of alleged credits in the bank account and the nature thereto. Based on the details filed by the assessee the ld. AO shall frame denovo assessment order in accordance with the law. Needless, to mention that assessee to remain vigilant and assessee should not seek any adjournments unless otherwise required for reasonable cause. Grounds of appeal raised by assessee are allowed Page | 4 ITA Nos. 57, 58 & 59/GTY/2024 Mahamad Amir Uddin; A.Y. 2013-14 for statistical purposes. The effective ground raised in ITA No.57/GHY/2024 is allowed for statistical purposes. 08. Other grounds are general in nature, which needs no adjudication. Therefore, appeal of the assessee is allowed for statistical purposes. 09. In the result, the appeal of the assessee is allowed for statistical purposes. 010. As regards to remaining two appeals, we find that in ITA No.58/GTY/2024, assessee has challenged levy of penalty u/s 271B of the Act for failure to gets the books of account audited u/s 44AB of the Act and in ITA No.59/GTY/2024, penalty levied u/s 271(1)(c) of the Act is in challenged. We find that the grounds raised in both the appeals deserves to be restored to the file of the ld. AO because they are dependent upon the outcome of the decision given in ITA No.57/GHY/2024. Therefore, the ld. AO would be at liberty to initiate the penalty proceedings u/s 271B and 271(1)(c) of the Act afresh. At this stage impugned penalties deserves to be deleted. Grounds of appeal raised by the assessee in ITA Nos. 58- 59/GTY/2024 are allowed. 011. In the result, the appeal of the assessee in ITA No. 57/GTY 2024 is allowed for statistical purposes and appeal in ITA Nos.58-59/GTY/2024 are allowed. Order pronounced in the open court on 17th October,10.2024. Sd/- Sd/- (MANOMOHAN DAS) (DR. MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 17.10.2024 *SS, Sr.Ps Page | 5 ITA Nos. 57, 58 & 59/GTY/2024 Mahamad Amir Uddin; A.Y. 2013-14 आदेश की प्रतततिति अग्रेतषत/Copy of the Order forwarded to : 1. अिीिार्थी / The Appellant 2. प्रत्यर्थी / The Respondent 3. संबंतित आयकर आयुक्त / Concerned Pr. CIT 4. आयकर आयुक्त ( अिीि ) / The CIT(A)- 5. तवभागीय प्रतततनति , अतिकरण अिीिीय आयकर , कोिकाता/DR,ITAT, Kolkata, 6. गार्ड फाईि / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अिीिीय अतिकरण ITAT, Kolkata "