VIJAY KUMAR AHUJA,KALKAJI, DELHI V. COMMISSIONER OF INCOME TAX APPEALS, NATIONAL FACELESS APPEAL CENTRE (NFAC)

ITA 1065/DEL/2024

AI Insights

The case involves Vijay Kumar Ahuja, a commission agent, who appealed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which sustained the additions made in the assessment order for the Assessment Year 2018-19. The primary contention was the lack of consideration of the appellant's medical circumstances that prevented effective representation during the appellate proceedings. The Assessing Officer had made substantial additions to the appellant's declared income, which were contested. The Tribunal found merit in the appellant's request for a de novo assessment due to the procedural lapses in the earlier hearings, exacerbated by the appellant's severe health issues during the critical period.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46871 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT KATOCH
• Assessee Lawyers: REHAN NARULA
• Keywords: Set aside; Opportunity of being heard; Business expenditure; Unexplained cash credit; Tax effect
• Section: 250

Judgement Text

"ITA No.1065/Del/2024 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “E”, NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER आ.अ.सं/.I.T.A No.1065/Del/2024 िनधा रणवष /Assessment Year:2018-19 VIJAY KUMAR AHUJA, E-193, 1st Floor, Kalkaji, Delhi. PAN No.AAPPA7496K बनाम Vs. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), Delhi. अपीलाथ\u0014 Appellant \u0016\u0017यथ\u0014/Respondent Assessee by Shri Rehan Narula, Adv. Revenue by Shri Amit Katoch, Sr. DR सुनवाईक\bतारीख/ Date of hearing: 07.04.2025 उ\u000eोषणाक\bतारीख/Pronouncement on 07.04.2025 आदेश /O R D E R PER C.N. PRASAD, J.M. This appeal is filed by the Assessee against the order of the Ld. CIT(Appeals)/NFAC, Delhi dated 10/01/2024 for the AY 2018-19 in sustaining the additions made in the assessment order. 2. At the outset, the Ld. Counsel for the assessee submits that that the present appeal emanates from the order dated 10.01.2024 passed by the Commissioner of Income Tax (Appeals), National ITA No.1065/Del/2024 2 Faceless Appeal Centre (NFAC), Delhi under Section 250 of the Income Tax Act, 1961, dismissing the appeal of the appellant without considering the merits and medical circumstances that prevented effective representation. 3. Ld. Counsel further submitted that the appellant, Mr. Vijay Kumar Ahuja, a 63-year-old commission agent registered with Agricultural Produce Market Committee (APMC) under Section 2(10) of Agriculture Produce Marketing (Regulation) Act, 1997, filed his return of income for Assessment Year 2018-19 on 29.12.2018, declaring total income of Rs.10,40,105/-. The declared income comprised commission from vegetable agency business of Rs.4,23,800/-, income from house property of Rs.1,84,800/-, income from other sources of Rs. 16,505/-, and income from sale of flats of Rs.6,00,000/-. 4. The case was selected for limited scrutiny under the e- Assessment Scheme, 2019, focusing primarily on verification of cash deposits. The Assessing Officer noted deposits aggregating to Rs.12,12,80,697/- in Current Account No. 348201002777 and additional deposits of Rs. 93,10,899/- in Savings Account No. 0348101050090, both maintained with Canara Bank, Okhla SSI Branch. ITA No.1065/Del/2024 3 5. During assessment proceedings, the appellant maintained and produced detailed books of accounts demonstrating the business model which operates under APMC regulations with a 7% charge structure, wherein 6% represents commission for Aarthi services and 1% constitutes APMC market fees. The operational framework involves facilitating trade between farmers and buyers, collecting sale proceeds in a fiduciary capacity, and remitting the same to farmers after deducting authorized commission and statutory fees. That the books of accounts clearly demonstrated: - Gross Commission Income: Rs.58,38,156/- (6% of Rs.9,73,02,600/-) - APMC Fees Collected: Rs.9,73,026/- (1%) - Business Expenses: Rs.41,15,500/- - Net Profit: Rs.4,23,800/- 6. The Assessing Officer, vide order dated 16.03.2021 under Section 143(3), made two substantial additions: • Enhanced commission income to Rs.58,38,156/- instead of declared Rs.4,23,800/- • Added Rs.2,39,78,097/- as unexplained cash credits The total additional demand raised amounts to Rs.2,87,82,662/-. That aggrieved by the assessment order, the appellant filed an appeal before CIT(A) on 08.04.2021. However, during the critical ITA No.1065/Del/2024 4 period of appellate proceedings from March 2023 to December 2023, the appellant suffered severe medical conditions requiring multiple hospitalizations, specifically: At Medanta Hospital, Gurugram for: - Chronic pancreatitis with pseudocyst measuring 65x51 x 61 mm - Superior Mesenteric Artery re-cannulization and stenting - Critical post-operative care and monitoring At Max Super Speciality Hospital, Saket for: - Type 2 Diabetes with poor glycemic control - Acute pancreatitis episodes - Gastroenterological complications - Emergency interventions 7. Ld. Counsel submitted that despite these severe medical conditions and hospitalizations being brought to the notice of CIT(A), four notices of hearing were issued between 24.12.2020 and 16.05.2024. The appellant's physical incapacity prevented proper compliance and representation during this period. 8. The learned CIT(A), through order dated 10.01.2024, dismissed the appeal without considering either the merits of the ITA No.1065/Del/2024 5 case or the appellant's severe medical conditions that prevented effective representation. The order failed to appreciate: - The nature of commission agent business under APMC regulations - The distinction between turnover and actual commission income - The explanation for bank deposits - The medical circumstances preventing proper representation That the total disputed amount in the present appeal is Rs.2,93,92,453/-, with tax effect of Rs.2,87,82,660/-. The appellant has paid the requisite appeal fee of Rs. 10,000/- vide BSR Code 510022 dated 07.03.2024. 9. Ld. Counsel submitted that aggrieved by the orders of both lower authorities, the appellant has approached this Hon’ble Tribunal seeking relief on both factual and legal grounds, with complete documentary evidence of business operations and medical conditions that prevented effective representation before C1T(A), warranting fresh consideration of the entire matter. 10. On the other hand, the Ld. DR stated that the Ld. CIT(Appeals) passed an ex parte order and expressed no objection with the matter is restored to the file of the Assessing Officer for denovo assessment. ITA No.1065/Del/2024 6 11. Considering the rival submissions and perusing the orders of the authorities below, we feel it appropriate to set aside the order of the Ld. CIT(Appeals) and restore the issues in appeal to the file of the Assessing Officer for denovo assessment after providing adequate opportunity of being heard to the assessee. We order accordingly. The assessee may furnish necessary evidences in support of his claims and cooperate with the assessment proceedings. 12. In the result, appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 07.04.2025 Sd/- Sd/- (AVDHESH KUMAR MISHRA) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 07.04.2025 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi "