INCOME TAX APPELLATE TRIBUNAL, KOLKATA ‘A’ BENCH, KOLKATA

I.T.A. No. 796/KOL/ 2013 Assessment Year: 2006-2007
Friends Engineers Cooperative Society Limited (Appellant) vs. Assistant Commissioner of Income Tax (Respondent)
Date of Order: 15-01-2016

ORDER

Per Shri P.M. Jagtap:-
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals), Durgapur dated 10.01.2013 for the assessment year 2006-07, whereby he confirmed the trading addition made by the Assessing Officer by applying the higher net profit rate of 5%.

2. The assessee in the present case is a Cooperative Society comprising of a few unemployed Engineers. It is engaged mainly in executing Government contract. The return of income for the year under consideration was filed by it on 31.03.2007 declaring total income of Rs.46,610/-. During the course of assessment proceedings, there was no full compliance on the part of the assessee to the notices issued by the Assessing Officer. Although the assessee furnished certain details and documents, the books of account could not be produced by it for the verification of the Assessing Officer. Even some of the details required by the Assessing Officer could not be furnished by the assessee. The Assessing Officer, therefore, proceeded to estimate the income of the assessee by applying a Net Profit rate of 5% by relying on the CBDT guidelines and completed the assessment on a total income of Rs.5,83,404/- vide an order dated 26.12.2008 passed under section 143(3).

3. On appeal, the ld. CIT(Appeals) upheld the order of the Assessing Officer estimating the income of the assessee by applying a Net Profit rate of 5% observing that in the absence of books of account produced by the assessee, the Assessing Officer was left with no option but to determine the income of the assessee on estimated basis. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.

4. We have heard the arguments of both the sides and also perused the relevant material available on record. As submitted by the ld. Counsel for the assessee, the case of the assessee was not properly represented either before the Assessing Officer during the course of assessment proceedings or before the ld. CIT(Appeals) during the course of appellate proceedings. He has submitted that regular books of account are maintained by the assessee and the said books of account duly audited could not be produced before the Assessing Officer for verification, as the matter was not properly represented on behalf of the assessee before the Assessing Officer. He has urged that one more opportunity may, therefore, be given to the assessee to produce the books of account before the Assessing Officer for verification and has undertaken that if such opportunity is given, the assessee shall produce the books of account along with all the supporting documents for verification before the Assessing Officer without any further delay. Although the ld. D.R. has raised objection for giving such an opportunity to the assessee on the ground that sufficient opportunity was already given by the Assessing Officer during the course of assessment proceedings, we are of the view that it would be fair and proper and in the interest of justice to give one more opportunity to the assessee to produce the books of account for verification before the Assessing Officer in the light of all the facts of the case including especially the fact that the books of account of the assessee are duly audited and report of the audit was already furnished by the assessee along with the return of income as pointed out by the ld. Counsel for the assessee. In that view of the matter, we set aside the impugned order of the ld. CIT(Appeals) and restore the matter to the file of the Assessing Officer with a direction to frame the assessment afresh after giving the assessee one more opportunity to produce the books of account and other documents for verification. As undertaken by the ld. Counsel for the assessee, the assessee shall not seek any adjournment and extend all the possible cooperation in order to enable the Assessing Officer to complete the assessment afresh expeditiously.

5. In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on January 15, 2016.

 (S.S. Viswanethra Ravi)          (P.M. Jagtap)
Judicial Member                       Accountant Member