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TMI Blog2022 (6) TMI 578X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer assumed the jurisdiction on the basis of valid transfer order issued by the CCIT, Surat dated 23/07/2012 passed under section 127 of Income Tax Act. Notice issued u/s 143(2) by the ACIT, Vapi Circle for initiating the assessment in the present case - In Jindal SteeHRI SATISH KUMAR SINHA VERSUS INCOME TAX OFFICER, WARD 4 (1) HYDERABAD [ 2021 (9) TMI 174 - ITAT HYDERABAD] there was no order from Commissioner of Income Tax for conferring power on JCIT to exercise jurisdiction and no order for transferring the case from one assessing officer to other officer. In ITO Vs NVS Builder [ 2018 (4) TMI 381 - ITAT DELHI] first notice under section 143(2) was issued by ITO Faridabad on 23.10.2007, who was not the assessing officer having no jurisdiction of assessee in that case. The assessee informed the assessing officer that he has filed return of income at Delhi, then ITO ward- 10(1) New Delhi issued notice under section 143(2) on 23.07.2008 which was beyond the statutory period. In Cosmat Trader Pvt Ltd Vs ITO [ 2021 (4) TMI 1020 - ITAT KOLKATA] the jurisdiction over the assessee was of ITO-ward -7(1) Kolkata and notice under section 143(2) was issued by ITO-ward-6(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... add, amend, modify or alter the above grounds of appeal at any stage of appellate proceedings. 5. The Appellant humbly prays that the appeal be allowed in toto. 2. The assessee vide application dated 10/01/2021 has raised following additional grounds of appeal: 6. That in view of the facts and circumstances of the case and in law, the assessment completed and the additions made therein under section 143(3) of the Income Tax Act, 1961 ( the Act /are illegal, bad in law, void ah initio, without jurisdiction and barred by limitation. 7. That, on the facts and circumstances of the case and in law, the assessment order passed dated 11.03.2014 for A.Y. 2011-12 by the Income Tax Officer, Ward-I, Vapi ( ITO, Ward-1 ) is illegal, bad in law and without jurisdiction as the JTO, Ward-I lacked the jurisdiction to pass the said assessment order. 8. That, in view of the facts and circumstances of the case and in law, in the absence of order u/s 127 of the Act, the assessment order passed dated 11.03.2014 for A.Y 2011-12 passed by the 1TO. Ward-1 is illegal, bad in law and without jurisdiction as the assessment proceedings were initiated by the Assistant Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has earned (shown) net profit of Rs.1,19,210/-. The assessee in its trading account, claimed purchase of Rs. 63.38 crores and debited Rs. 8.26 crores on account of manufacturing expenses. The Assessing officer noted that no corroborative details were furnished, accordingly, a show cause notice was issued to the assessee to furnish copy of bank statement, details of payment made and received, copy of lorry receipt/transportation document of goods despatched and received and to furnish original receipt of octroi. The assessee was also asked to produce the books of account with all details of sales and purchases, bank statement, stock of opening and closing. The Assessing Officer recorded that in response to show cause notice, no details were furnished. The Assessing Officer issued another show cause notice. The contents of show cause notice is recorded in para 5 of assessment order. The Assessing Officer issued show cause notice as to why, the books of account should not be rejected and gross profit @ 3% should not be estimated. The Assessing Officer directed that the reply of assessee must reach to his office on or before 28/02/2014. The Assessing Officer recorded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it or marked up in this line of business is very nominal. The assessee prayed that estimated addition if accepted the quantity of purchases of trading such goods like knitted fabrics and yarn are also to be considered without which it is not possible to make the sale of such item. 6. The ld. CIT(A) after considering the submission of assessee noted that during the assessment, neither the assessee appeared before the Assessing Officer nor produced books of account alongwith other documents as called for. The Assessing Officer has no option except to reject the books of account and to estimate the gross profit @ 3% against gross profit of 0.81% shown by the assessee. Even against the show cause notice for estimating the gross profit, the assessee has not offered any objection or comments. During the appellate proceedings, the assessee claimed that the Assessing Officer wrongly estimated the profit @ 3% despite that return of income alongwith audit report alongwith quantity and value of sales and purchases were furnished. The assessee maintained almost same level of operation as in earlier years and party wise details furnished. The assessee claimed that fire took place in the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication dated 10/01/2021, the assessee has raised additional grounds of appeal that in absence of order under Section 127, the assessment order passed by the ITO, Ward-1, Vapi is illegal as he has no jurisdiction to pass such assessment order. The jurisdiction in his case lies with ACIT, who issued notice under section 143(2). The ld. AR further submits that the additional grounds of appeal are purely legal in nature and no new facts are to be brought on record. The facts relating to adjudication of additional grounds of appeal are emanating from the assessment order itself. The ld. AR further submits that since the Assessing Officer who passed the assessment order has no jurisdiction, therefore, the assessment order is liable to be quashed being bad in law. 9. At the time of hearing submission of ld AR for the assessee on 11.01.2022, the ld. Sr. DR was directed to file her comment as such additional grounds of appeal was raised for the first time. On the direction of this Bench, the ld. Sr. DR for the revenue filed her reply dated 30/03/2022, copy of which was sent through e-mail to the ld. AR of the assessee. The Revenue /Sr. DR in its reply submits that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. AR of the assessee submits that as per book result, the gross profit of assessee was 0.81% but the Assessing Officer estimated gross profit @ 3%. The ld. CIT(A) enhanced the gross profit from 3% to 7.88% without issuing any show cause notice as required under Section 251(2) of the Act. The Ld. CIT(A) held that the assessee could not produce complete details about the sales and purchase and other corroborative evidence, on which the ld. AR submits that there was a major fire in the factory premises of the assessee and in the fire all the records of assessee was destroyed. The ld. AR for the assessee submits that the estimation made by the Assessing Officer is highly excessive as the margin the business of assessee is very nominal. Moreover, the ld. CIT(A) increased the gross profit at 7.88% without issuing any show cause notice. The ld. AR prayed that book profit offered by assessee may be accepted. 12. On the other hand, the ld. Sr.DR for the Revenue on the additional grounds submits that the case was transferred from ACIT, Circle-Vapi to ITO, Ward-1, Vapi under a valid transfer order issued by the CCIT, Surat under section 127, vide office order dated 23/07/2012, copy o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pending since 2015. Not a single document is filed by assessee either to substantiate books of account or to challenge the estimation of addition made by lower authorities. The ld. Sr. DR submits that conduct of assessee right from the beginning was of non-cooperative and the assessee deserve no leniency and the appeal of assessee is liable to the dismissed. 14. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. We have also deliberated upon the various case laws relied upon by the ld. AR of the assessee. The Assessing officer made addition of Rs. 1.579 crore by taking a view that during the assessment, from the details furnished with return of income, the assessee reported total turnover (sales) of Rs. 72.24 crores, on which the assessee has earned net profit of Rs.1,19,210/-. The assessee in its trading account, claimed purchase of Rs. 63.38 crores and Rs. 8.26 crores in the manufacturing expenses. On which, a show cause notice was issued to the assessee to furnish copy of bank statement of payment made and received, copy of lorry receipt/transportation document of goods despatched and received and to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire department or from Police station was filed. Thus, in absence of any evidence to substantiate the books profit, we do not find any reason to disturb the estimation of profit estimated by assessing officer. in the result the assessee gets part relief as we affirm the estimation of profit estimated by assessing officer. In the result, ground No. 2 3 are partly allowed. 16. Now adverting to the other grounds of appeal raised by the assessee. Ground No. 1 relates to rejection of books of accounts. We find that no submissions made by ld AR of the assessee. Thus, this ground of appeal is treated as not pressed and as such dismissed. Ground No. 4 5 are general and needs no adjudication and thus dismissed. 17. Ground No. 5 to 8 (Additional Grounds of appeal) relates to the jurisdiction of assessing officer is concerned, we find that the ITO, Ward-1, Vapi/Assessing Officer assumed the jurisdiction on the basis of valid transfer order issued by the CCIT, Surat dated 23/07/2012 passed under section 127 of Income Tax Act. Thus, the additional grounds No. 6 to 8 fails. 18. So far as further additional grounds No. 9 to 11 of the appeal are concerned, we find that once the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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