CIT has the power to remit the matter to the file of AO if satisfied the needs of reconsideration

IN THE INCOME TAX APPELATE TRIBUNAL

DELHI BENCH “SMC”: NEW DELHI

BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER

ITA No. 5707/Del/2011

A.Y.: 2007-08

Md. Saud Shahid,

3950, Gali Khankhana,

Urdu Bazar, Jama Masjid,

Delhi – 110 006

(PAN: BIHPS 8913A)

(Appellant)

Vs.

ITO, Ward-30(1),

New Delhi

 (Respondent)

Assessee by: Sh. Deepak Malik, Adv.

Department by: Dr. B.R.R. Kumar, Sr. D.R.

O R D E R

This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XXV, New Delhi dated 24.10.2011 pertaining to assessment year 2007-08.

2. The grounds of appeal read as under:-

i) That the allegation of failure of compliance of notices is contrary to the facts on record confirming exparte assessment completed u/s. 144 of I.T. Act on the back of the appellant.

ii) That the action of the Ld. Commissioner of Income Tax (A) to presume cash deposits of ` 10,96,900/- into Axis Bank by adding into turnover of ` 26,72,963/- disclosed confirming estimation @ net profit rate of 10% applied on assumed turnover of ` 37,69,863/-.

iii) That the appellant crave to add, amend and delete any ground of appeal at the time of hearing.

3. In this case Assessing Officer noted that assessee had not attended proceedings in response to the notices dated 12.11.2009 and 23.12.2009, even after their proper service upon the assessee and has also not furnished any explanation. Assessing Officer further noted that there was cash deposits in assessee’s Axis Bank to the tune of ` 10,96,000/-. Assessing Officer held that the cash deposits in the bank to the tune of ` 10,96,600/- should be treated as turnover of the assessee in addition to the amount declared in the return in the tune of ` 26,72,963/-. By this way Assessing Officer noted that the total turnover of the assessee for the year 2006-07 comes to ` 37,69,863/-. Assessing Officer noted that the assessee has not submitted any bill or vouchers. Hence, he rejected the books of account of the assessee and completed the assessment by considering the net profit of the assessee @ 10% of the total turnover of ` 37,69,863/- and accordingly, taxable income was computed at ` 3,76,986/- as against net profit declared by the assessee from business in the tune of ` 1,52,285/-.

4. Upon assessee’s appeal Ld. Commissioner of Income Tax (A) concluded as under:-

“3.6 I have considered the ex-parte assessment u/s. 144 and the addition / order of the Assessing Officer and the submissions of the assessee and I do not find any merit in the submission of the assessee as the assessee has repeatedly failed to non comply with the notices issued by the Assessing Officer during the course of assessment proceedings and as such the Assessing Officer is justified to make the ex-parte assessment u/.s 144. It is also seen that the assessee has declared the nominal income of ` 1,31,867/- only against the turnover of ` 26,72,963/- and there is only a personal withdrawal of ` 72,000/- only for the household expenses for the whole year which does not seem to be adequate and sufficient. It is apparent that the assessee is not declaring full and true income and as such the Assessing Officer is justified to estimate the income and make the addition.”

5. Against the above order the Assessee is in appeal before me.

6. I have heard the rival contentions in light of the material produced and precedent relied upon. Ld. Counsel of the assessee submitted that assessment in this case was framed u/s. 144 of the I.T.

Act and Ld. Commissioner of Income Tax (A) has also confirmed the addition made by the Assessing Officer. It was also submitted that assessee has not been given adequate opportunity to canvass his case. Accordingly, he requested that the matter may be remitted to the file of the Assessing Officer to consider the issue afresh, after granting the assessee adequate opportunity of being heard. Ld. Departmental Representative did not have any objection to this proposition. Accordingly, in my considered opinion, the matter needs to be remitted to the file of the Assessing Officer to consider the issue afresh. I hold and direct accordingly. Needless to add that the assessee should be granted adequate opportunity of being heard.

7. In the result, the appeal filed by the assessee stands allowed for statistical purposes.

Order pronounced in the open court on 03/8/2012.

                                                                    SD/-

                                                       [SHAMIM YAHYA]

                                                 ACCOUNTANT MEMBER

Date: 03/8/2012

SRBhatnagar

Copy forwarded to: -

1. Appellant

2. Respondent

3. CIT

4. CIT (A)

5. DR, ITAT

TRUE COPY

By Order,

Assistant Registrar, ITAT, Delhi Benches