Failure Of Kidney A Reasonable Cause Which Prevented Assessee To Supply The Documents And Replies To The AO: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that failure of the kidney was a reasonable cause of ailment that prevented the assessee from supplying the documents and replies to the AO.

The two-member bench of Astha Chandra (Judicial Member) and Shamim Tahya (Accountant Member) has directed that the additional evidence and submissions made before the CIT(A) be accepted by the CIT-A.

The assessee is in the business of trading menthol oil, and the list of various creditors included an amount of Rs. 2,17,85,150/- due in the name of M/s Suraj Trading Company, Gangyal, J&K.

The AO required the appellant to file a confirmed copy of the creditor's account along with a bank statement, which was not submitted.

A notice was issued to the above creditor to verify the creditworthiness and genuineness of the transactions with the appellant. In reply to the notice, the creditor submitted to the AO, among other details, a list of Sundry Debtors.

The amount was shown outstanding in his books of account in the name of the assessee's business concern, M/s Shyamji Trading Co., in the list of Debtors against the amount claimed as a creditor by the assessee in the name of the creditor. The information showing the disparity was presented to the assessee by the AO via a show cause notice dated August 30, 2016, requiring the assessee to show cause as to why the difference amount of Rs. 47,10,075/- should not be added to his taxable income.

The show cause notice remained uncomplied with, and a further two show cause notices dated 10.14.2016 and 10.21.2016 were issued, but the assessee made no compliance with them.

The assessee submitted that there were some genuine reasons why documents and replies could not be submitted to the AO. The assessee was suffering from kidney failure. The assessee urged that the matter may be remitted to CIT (A) for fresh consideration in light of the additional evidence and submissions made.

The tribunal held that after going through the submissions and additional evidence, the CIT (A) shall pass an order as per law. Needless to say, assessees should be given a fair chance to be heard.

Case Title: Sunil Kumar Garg Versus ITO

Citation: ITA No.3182/Del./2018

Date: 21.03.2023

Counsel For Appellant: V.K. Sabharwal, R.B. Gupta

Counsel For Respondent: Indu Bala Saini

Click Here To Read The Order