Brij Bhushan Pawan Kumar vs ITO

This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), Moradabad dated 10.12.2018 for the AY 2015-16 in sustaining the net profit rate applied by the Assessing Officer at 8% on the turnover of the assessee.

Several notices were issued to the assessee on various dates. However, none appeared on behalf of the assessee nor any adjournment was sought. The notices issued through speed post with acknowledgment due posting the appeal for hearing on 23.08.2021 and 18.05.2022 returned un-served with the endorsement of postal authorities that the assessee left and on conducting various enquiries it was found that this person is not residing in the address given. Therefore, the appeal is disposed of on hearing the Ld. DR.

The Ld. DR submits that in the course of assessment proceedings several notices were issued to the assessee. However, the assessee did not appear nor any explanation was furnished on the queries raised by the AO. The Ld. DR submits that in the absence of any explanation and appearance by the assessee the AO completed the assessment u/s 144 of the Act estimating the net profit at 8% of turnover applying the provisions of sec. 44AD of the Act. The ld. DR submits that on appeal the Ld. CIT(A) sustained the order of the AO since the assessee did not produce the books and vouchers before the Assessing Officer.

I have heard the Ld. DR and perused the orders of the authorities below. The Ld. CIT(A) considering the submissions of the assessee and the findings of the Assessing Officer observed as under:

“4.1 This case can be broadly divided into two major issues i.e. service of notice was not properly done and the income was incorrectly computed @8% of turnover.

4.2 So far as the issue of services of notice u/s 143(2) and 142(1) is concerned, it is seen from the assessment order that the AO served notices on the last known address of the appellant several times. One notice was served on the authorized representative of the appellant also but no response was given by appellant. During the appellate proceedings, the appellant was asked whether the latest address was informed to the department after discontinuation of business or not. It was stated by the appellant that no such address was communicated to the department. Therefore, service of notice u/s 142(1) by the AO on the last known address of the appellant is perfectly justified. Since, no response was given by the appellant; the assessment was rightly completed u/s 144 of the Income Tax Act, 1961.

4.3 The AO mentioned that since books and vouchers were not produced before him, therefore, the income is finalized on estimated basis. He also mentioned that in column No. 5 in 3CB report, auditor has specifically stated that maintenance of stock register is not possible. Therefore, AO estimated the income @8% of turnover as per the provisions of 44AD. In view of the circumstances mentioned above, the action of the AO is justified. Further the contention of assessee that the case was transferred from one AO to another AO without any information does not come to its rescue because firstly there is no change in place of jurisdiction and secondly the new AO has given sufficient opportunities by sending notices u/s 142(1) at the last known address several times. Therefore, the appeal is decided in favour of Revenue and against the appellant.”

None of the above findings of the Ld. CIT(A) have been rebutted with evidences before me. I see no infirmity in the order of the Ld. CIT(A) in sustaining the net profit estimated at 8% of the turnover applying the provisions of sec. 44AD of the Act. Grounds raised by the assessee are dismissed.

In the result, the appeal of the assessee is dismissed.