2022 (8) TMI 133 - AT - Income Tax

Ex-parte orders u/s 144 - HELD THAT - As expected that the assessee may put forth some documentary evidences in support of his contentions to decide the appeal as it is the duty of the assessee to lead evidence in support of its claim and for the adjudicating authority to decide upon the sustainability of the claim on the basis of the evidence led by the parties before it. However, the assessee did not appear before the Tribunal despite numerous adjournments allowed and notices issued through RPAD. In case of any change of address, it is for the assessee to file revised Form No.36 duly mentioning the new address as the notice issued by the Registry was returned unserved with the postal remark Incomplete address . No material has been placed by assessee to controvert the findings of lower authorities. In this view of the matter and in absence of any contrary material brought on record to rebut the findings of lower authorities, we dismiss the appeal of the assessee.

Summary

Issues:
1. Assessment order passed under section 144 of the I.T. Act, 1961 without assessee's response.
2. Dismissal of appeal by Ld. CIT(A) due to non-appearance of the assessee.
3. Addition made on account of G.P. rate and expenses.
4. Adhoc disallowance of expenses.
5. Addition of income from undisclosed sources in respect of sundry creditors.

Analysis:

1. The assessment order for the A.Y. 2009-10 was passed under section 144 of the I.T. Act, 1961 as the assessee, an individual, did not respond to notices issued under sections 143(2) and 142(1). Despite multiple opportunities and summons, the assessee did not provide necessary documents or appear before the Assessing Officer (A.O.). Consequently, the total income was computed at Rs.28,16,47,798/-, significantly higher than the declared income of Rs.3,28,730/-.

2. The Ld. CIT(A) dismissed the appeal of the assessee, noting that notices were sent twice but returned undelivered. The CIT(A) upheld the A.O.'s findings due to the absence of explanations and supporting documents regarding creditors and expenses. The assessee then appealed to the Tribunal, citing various grounds including lack of proper opportunity to be heard, closure of business premises, and personal injury preventing participation in proceedings.

3. The Tribunal observed the negligent approach of the assessee, who failed to rectify defects in the appeal filing and did not appear despite multiple hearing opportunities. The A.O. had noted a low Gross Profit (G.P.) rate of 0.30% on sales, which was deemed unverifiable without proper documentation. Consequently, an addition of Rs.22,39,776/- was made based on a revised G.P. rate of 1%.

4. Additionally, the A.O. disallowed 30% of the claimed expenses due to lack of supporting bills and vouchers, resulting in an adhoc disallowance of Rs.1,87,880/-. The CIT(A) affirmed these decisions, leading to the current appeal before the Tribunal.

5. The Tribunal emphasized the importance of the assessee presenting evidence to support their claims during appellate proceedings. Despite numerous adjournments and notices, the assessee failed to appear or provide any material to challenge the lower authorities' findings. As a result, the appeal was dismissed for lack of cooperation and failure to rebut the established facts.

In conclusion, the Tribunal upheld the orders of the lower authorities due to the assessee's non-appearance, lack of evidence, and failure to address the issues raised during the assessment and appeal processes.