Dhanawade Transport Service vs. ITO

Parties Involved

Facts Summary

The assessee is a partnership firm registered under the Partnership Act, 1932. It filed its income return for the year under consideration on 19.10.2016, declaring a total income of Rs.13,35,480/-. The assessee's case was selected for limited scrutiny under CASS, and notices under sections 143(2) and 142(1) of the Income Tax Act were issued and served. The Assessing Officer passed the assessment order under section 143(3) of the Act on 24.12.2018, determining the total income at Rs.4,98,18,200/-, after making an addition of Rs.4,84,82,721/-, being the difference in the turnover which is being treated as ‘undisclosed’ in the return of income of the assessee for the year under consideration. The Assessing Officer also initiated penalty proceedings under sections 271(1)(b) and 274 of the Act, issuing notices which were served upon the assessee. The penalty order was passed under sections 271(1)(b) and 271(1)(c) of the Act on 12.10.2018 and 29.06.2019 respectively. The assessee appealed to the first appellate authority, challenging the addition and penalty levied by the Assessing Officer. The Commissioner of Income Tax (Appeals) dismissed the appeal, stating that the delay in filing the appeal was not explained with sufficient cause by the assessee. The assessee then appealed to the Income Tax Appellate Tribunal, challenging the order of the Commissioner of Income Tax (Appeals).…

Legal Issues

• 1. Whether the Commissioner of Income Tax (Appeals) erred in passing an ex parte order without providing an opportunity of being heard.
• 2. Whether the Commissioner of Income Tax (Appeals) erred in holding the action of the Assessing Officer in making an addition of Rs.4,84,82,721/- on account of undisclosed turnover.
• 3. Whether the Commissioner of Income Tax (Appeals) erred in holding the action of the Assessing Officer in making an addition of the entire amount of turnover instead of taxing net profits.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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