SANGA AUTOMOBILES (P) LTD,JAIPUR V. THE ACIT, CIRCLE - 7, JAIPUR

ITA 911/JPR/2024

AI Insights

Sanga Automobiles (P) Ltd. appealed against the order of the CIT(A), which confirmed the AO's additions to the assessee's income for the assessment year 2017-18. The additions included unexplained cash credits, disallowance of expenses, and non-disclosure of income from ICICI Lombard General Insurance company. The CIT(A) dismissed the appeal ex-parte due to non-compliance by the assessee in providing necessary details and evidence. The ITAT, however, noted the lack of opportunity given to the assessee to contest the additions and thus restored the matter to the AO for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 28475 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-08-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 27-06-2024
• Other Referred Cases: Collector, Land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANOOP SINGH
• Assessee Lawyers: TARUN MITTAL
• Keywords: Condonation of delay; Opportunity of being heard; Corroborative evidences; Unexplained cash credit; TDS; Validity of assessment; FORM 26AS
• Section: 144; 142(1); 143(2); 250; 68

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 911/JPR/2024 fu/kZkj.k o\"kZ@Assessment Years : 2017-18 Sanga Automobiles (P) Ltd. 1/282 Gram Udyog Road, Sanganer, Jaipur. cuke Vs. The ACIT, Circle-7, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AALCS5496G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Tarun Mittal (C.A.) jktLo dh vksj ls@ Revenue by : Shri Anoop Singh (Addl.CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 07/08/2024 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 04/10/2024 vkns'k@ ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal is filed by the assessee aggrieved from the order of the Ld. CIT(A), National Faceless Appeal Centre, Delhi dated 23.08.2023 [Here in after referred as “CIT(A)”] for the assessment year 2017-18, which in turn arise from the order dated 22.12.2019 passed under section 144 of the Income Tax Act, [Here in after referred as “Act” ] by the AO. ITA No. 911/JPR/2024 Sanga Automobiles (P) Ltd. vs. ACIT 2 2.1 At the outset of hearing, the Bench observed that there is delay of 249 days in filing of the appeal by the assessee for which the ld. AR of the assessee filed an application for condonation of delay with following prayers and the assessee to this effect also filed an affidavit :- “In the aforesaid context, it is humbly submitted that order u/s 250 was passed by Id. CIT(A) in the case of assessee on 23.08.2023, which stood uploaded on the e portal of assessee. Against the order so passed, appeal could have been filed within 60 days, from the service of the order. However, the appeal got delayed by 249 days, as the appeal was filed on 27.06 2929 for the reasons as explained below: 1. That, the Appeal order was passed by National Faceless Appeal Centre, Delhi on 23.08.2023, which stood uploaded on E portal of the assessee, 2. That, as there was a transition of accountant, Appeal order served on E portal remained unnoticed; 3. That, the assessee, thereafter approached its counsel few days back to know the status of assessment proceedings of A.Y. 2019-20, then at that time the counsel of assessee also informed about the Id. CIT(A) order for A.Y. 2017-18 which had already been passed in the month of August 2023.where in huge addition made by ld. AO was confirmed by the Id. CIT(A) vide order dated 23.08.2023, however by then due date of filing appeal before Hon'ble ITAT had also expired. 4. That the assessee immediately approached his consultant for the advice, who suggested to file appeal and therefore appeal is being now filed before your goodself. 5. Thus, it is submitted that the delay in filing the appeal is absolutely inadvertent and has occurred due to circumstances beyond the control of assessee. 6. That, the assessee always has acted in bonafide and the delay is of only 249 days. ITA No. 911/JPR/2024 Sanga Automobiles (P) Ltd. vs. ACIT 3 In the circumstances of the matter it is humbly prayed to your goodself to please accept the application/prayer of the condonation of delay and to please be kind enough to direct the listing of the appeal for disposal on the merits. Your kindness would go a long way to impart effective justice to the ignorant litigant.” To this effect, the assessee has filed an affidavit as to the condonation of delay in filing the appeal. 2.2. During the course of hearing, the ld. DR objected to assessee’s application for condonation of delay and prayed that Court may decide the issue as deem fit and proper in the interest of justice. 2.3 We have heard the contention of both the parties and perused the materials available on record. The prayer as mentioned above by the assessee for condonation of delay of 249 days has merit for the reason that there was miscommunication resultantly delay and we concur with the submission of the assessee. Thus the delay of 249 days in filing the appeal by the assessee is condoned in view of the decision of Hon’ble Supreme Court in the case of Collector, land Acquisition vs. Mst. Katiji and Others, 167 ITR 471 (SC) as the assessee is prevented by sufficient cause. 3. The assessee has raised following grounds:- “1. On facts and in the circumstances of the case the Id. CIT(A) has grossly erred in confirming the action of ld. AO in making addition of Rs. 4,28,880/- ITA No. 911/JPR/2024 Sanga Automobiles (P) Ltd. vs. ACIT 4 by arbitrarily disallowing 10% of the following expenses claimed in the profit and loss account:- Particulars Amount Wrokmen and staff welfare expenses 21,20,166 Discount 21,68,638 Total 42,88,804 Appellant prays that the expenses claimed being most genuine looking to the nature of business of the appellant, thus the disallowance/ trading addition made merely on assumptions and presumptions deserve to be deleted; 2. On facts and in the circumstances of the case the Id. CIT(A) has grossly erred in confirming the action of Id. AO in making addition of Rs. 22,26,825/- by alleging the rent receipt appearing in form 26AS as not disclosed in the Profit and Loss account of the Assessee. Appellant prays that receipt from M/s ICICI Lombard General Insurance company was in the nature of Commission on which TDS was wrongly deducted u/s 1941 instead of Sec. 194H of the Income Tax Act, 1961 by the payer. Thus the addition made without appreciation of the true nature of the transaction deserves to be deleted. 2.1 That the of the case the ld. CIT(A) has further erred in ignoring the fact that the Commission income received from ICICI Lombard amounting to Rs. 22,26,825/- have already been included in the financial statements and duly declared in its computation of income, thus further addition of the same by alleging the same as rent tantamount to double addition of same income and the same deserves to be deleted. 2. On facts and in circumstances of the case the Id. CIT(A) has grossly erred in confirming the action of ld. AO in making addition of Rs. 1,58,70,374/- arbitrarily by alleging the cash deposited during the de-monetization period as being Undisclosed income of the assessee. Appellant prays that the deposits so made is out of available cash balance which is mainly on account of accumulation of the cash sales made by assessee, and same was required to be deposited in the bank accounts as per the directives of the government under the de-monetization scheme. Therefore the addition so made deserves to be deleted. 4. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal.” ITA No. 911/JPR/2024 Sanga Automobiles (P) Ltd. vs. ACIT 5 4. The brief facts of the case are that the assessee e-filed its income tax return for the Α.Υ. 2017-18 on 05.03.2018 by declaring total income of Rs. 2,07,08,990/-. Thereafter, the case was selected for scrutiny under CASS. Accordingly, notice u/s 143(2) and various notices u/s 142(1) of the Income Tax Act, 1961 were issued. The assessee did not file complete details and information as per notices and filed only reconciliation of income with 26AS statement and bank account statements. Hence, final show cause notice u/s 144 of the Act was issued on 14.12.2019 proposing to add rent received as per ITS data/ 26AS amounting to Rs. 22,26,825/- from ICICI Lombard General Insurance company in the year under consideration which was not declared in the ITR and proposal to disallow 10% of expenses under the head Workmen and staff welfare and Discount as expenses are not verifiable in absence of required information furnished by the assessees office and to add cash of 1,58,70,374/- deposited during the demonetization period in the AXIS Bank [A/c no. 433010200005999] amounting to Rs. 1,39,00,000/-, Oriental Bank of Commerce [a/c no. 12565011000173] amounting to Rs. 16,92,610/-, Canara Bank [a/c no. 3317201000031] amounting to Rs. 2,17,764/-, State Bank of India [ a/c no. 61077795163] amounting to Rs. 60,000/- as unexplained cash credit u/s 68. There was no compliance from the side of the assessee. Therefore, the AO passed order u/s 144 by disallowing Rs. ITA No. 911/JPR/2024 Sanga Automobiles (P) Ltd. vs. ACIT 6 4,28,880/- of expenses under the head Workmen and staff welfare and Discount as the same were found increased abnormally high. An addition of Rs. 22,26,825/- was made to the income of the assessee under the head income from House Property. No deduction u/s 24(a) and 24(b) shall be allowed as the assessee has not submitted any detail. The AO also added cash deposit made of Rs. 1,58,70,374/- treating the same as unexplained cash credit u/s 68 of the Act. 5. Being aggrieved by the order of the AO, the assessee filed an appeal before the ld. CIT(A). The Ld. CIT(A) observed that various notices were issued on 25.03.2022, 25.04.2022, 23.10.2022 & 26.07.2023 and requiring the assessee to file the details in support of grounds taken by the assessee. Since the assessee has not complied with the notices issued the ld. CIT(A) dismissed the appeal of the assessee ex-parte order. The extract of the finding of the ld. CIT(A) is reproduced as under:- “6. I have carefully considered the grounds of appeal, statement of facts and the contents of the assessment order. The appellant has not filed any submission or evidence during the appellate proceedings in support of its grounds of appeal in spite of allowing sufficient opportunities of being heard. The assessee has challenged three additions made by the AO in its grounds of appeal. On the issue of disallowance of expenses under the head Workmen and staff welfare and Discount. the AO found that the expenses debited under the aforesaid heads are abnormally high compared to the preceding year and the assessee did not file details and evidences in support of the expenses. Hence, the AO disallowed 10% of the expenses debited under the aforesaid heads. During the appellate proceedings also, no details or evidences in support of expenses debited under the head Workmen and staff welfare and Discount was ITA No. 911/JPR/2024 Sanga Automobiles (P) Ltd. vs. ACIT 7 filed. Therefore, I donot have any material to interfere with the finding of the AO and the disallowance of Rs. 4,28,880/- of expenses under the head Workmen and staff welfare and Discount made by the AO is hereby confirmed. The relevant grounds of appeal are dismissed. 6.1 The second issue is non-disclosure of rent received as per ITS data/ 26AS amounting to Rs. 22,26,825/- from ICICI Lombard General Insurance company in the year under consideration which was not declared in the ITR. The assessee has claimed the same to have already been offered to tax under the head commission. However, no supporting evidence to prove the aforesaid claim was filed during the appellate proceedings. In view of above, the addition of Rs. 22,26,825/- made by the AO under the head Income from House property is hereby confirmed. The relevant grounds of appeal are hereby dismissed. 6.2 The AO has treated cash deposit of 1,58,70,374/- made during the demonetization period in the AXIS Bank [A/c no. 433010200005999) amounting to Rs. 1,39,00,000/-, Oriental Bank of Commerce [a/с по. 12565011000173] amounting to Rs. 16,92,610/-, Canara Bank [a/c no. 3317201000031] amounting to Rs. 2,17,764/-, State Bank of India | a/c no. 61077795163) amounting to Rs. 60,000/- as unexplained cash credit u/s 68. The appellant has not filed any evidence during the assessment or appellate proceedings to explain and prove the source of cash deposits. Therefore, it is held that the AO was justified in adding the cash deposit of Rs. 1,58,70,374/- treating the same as unexplained cash credit u/s 68 of the Act and hence the addition of Rs. 1,58,70,374/- is hereby confirmed. The relevant grounds of appeal are dismissed. 6.3 The appellant has challenged the validity of assessment order u/s 144. In this regard, it is found that the AO has allowed sufficient opportunities of being heard to the assessee and has also issued final show cause notice u/s 144 which remained without any compliance from the assessee. Therefore, it is held that the order u/s 144 is legally valid order. 7. Accordingly, the appeal is treated as 'dismissed\". 6. Feeling dissatisfied from the order of the ld. CIT(A) the assessee has preferred this appeal on the ground as reiterated here in above. During the course of hearing, the ld. AR for the assessee prayed that the Ld. ITA No. 911/JPR/2024 Sanga Automobiles (P) Ltd. vs. ACIT 8 CIT(A) and the AO has passed the ex-parte order and the assessee was not provided adequate opportunity of being heard. Thus, the assessee may be provided one more opportunity to advance his arguments/submissions before the ld. AO in the interest of equity and justice. 7. Per contra, Ld. DR objected to the prayer of the assessee and submitted that even the assessee did not represent case before the ld. AO and therefore, in that case the Bench feels the matter may be restored to the file of the Assessing Officer. 8. We have heard both the parties and perused the materials available on record. The bench noted from the order of ld. CIT(A) that the appeal of the assessee was dismissed by the ld. CIT (A) for want of non- prosecution of the appeal. The assessee did not appear or filed any reply to the notices which were issued by the ld. AO during the assessment proceedings, finally the assessee completed ex-parte assessment u/s 144 of the Act on 22.12.2019. However, the Bench feels that the assessee because of any reasons could not advance his arguments/submissions to contest the case before the lower authorities and the ld. AR for the assessee also prayed to give one more opportunity to submit the evidences concerning the issue in question, with grounds so raised by the assessee, to decide it afresh by providing one more ITA No. 911/JPR/2024 Sanga Automobiles (P) Ltd. vs. ACIT 9 opportunity of hearing, however, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld. AO. 9. Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. AO independently in accordance with law. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 04/10/2024. Sd/- Sd/- ¼ jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 04/10/2024 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Sanga Automobiles (P) Ltd., Jaipur. 2. izR;FkhZ@ The Respondent- ACIT, Circle-7, Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 911/JPR/2024} vkns'kkuqlkj@ By order lgk;d iathdkj@Asst. Registrar "