The Chandigarh Bench of the Income Tax Appellate Tribunal ( ITAT ) ruled that the taxpayer could not be stated to maintain the stock enrolled along with the books of accounts on the basis of not uploading the same on the income tax portal which does not permit the bulk uploads and permit the manual submission of the needed documents.
Post to the issuance of the show cause notice to the taxpayer for the reason of why the books of account must not be denied via invoking the provision of Section 145(3) of the Income Tax Act, acknowledging the taxpayer’s submissions which were not been acceptable, cancelled the books of accounts.
Acknowledging the history of the taxpayer, the Assessing Officer (AO) applied the average Gross Profit rate of the former 3 years at 3.13% as against the G.P. rate of 0.55% shown via taxpayer and the addition of Rs 84,00,000 incurred through the assessment order.
The taxpayer, the same was not effective on the portion of AO to deny on the portion of the commissioner of the income tax (appeals), national faceless assessment centre to ensure the rejection of the books of accounts.
In the duration of the hearing on the basis of the taxpayer CA, Parveen Jindal mentioned that the only cause for the rejection of the books of accounts under section 145(3) of the income tax act, approximating the profit of AO was that the taxpayer was not carried the daily stock registers with the quantitative information.
AO in a wrong way ruled that for the assessment order that bills and vouchers were not being made via taxpayer and hence the AO would have wrongly ended the taxpayer would not maintain the complete and proper books of accounts including the bills and vouchers and has gone forward, denied the books of account via invoking the provision of Section 145(3) of the Income Tax Act.
The representative of the department Akashdeep, Joint Commissioner of Income Tax provided that, AO was correct in law in computing the Gross profit rate under distinct judgements of the High courts and Tribunal benches.
The Tribunal consists of Vice President Aakash Deep Jain and Accountant Member Vikram Singh Yadav, it seems that “where the assessment has been conducted through a virtual electronic platform, it may not be feasible to submit and upload the voluminous books of account, sale/purchase register, cash book, and other ledger accounts along with bills and vouchers, TDS return etc. as so desired by the AO”.
The stated conflict would not be denied via Revenue.
Tribunal sees that AO being empowered to verify the books of the accounts that the representative for the taxpayer would have been mentioned at the bar that when the same would be permitted, towards AO the taxpayer produce the books of account for the required verification and set aside the case to the AO for the newer examination of the documents which might be submitted by the taxpayer physically.
| Case Title | M/s Piyush Overseas Pvt. Limited Vs DCIT |
| Citation | ITA NO. 419/Chd/ 2021 |
| Date | 28-09-2022 |
| Assessee | Shri Parveen Jindal, CA |
| Revenue | Shri Akashdeep, JCIT, Sr. DR |
| Chandigarh ITAT | Read Order |
