Trilok Goel vs ITO Ward-31(4) – Appeal Dismissed Under Section 147 for AY 2014-15

Trilok Goel vs ITO Ward-31(4): Appeal Dismissed Under Section 147 for AY 2014-15

Case Number: ITA 6529/DEL/2019

Appellant: Trilok Goel, New Delhi

Respondent: ITO, Ward-31(4), New Delhi

Assessment Year: 2014-15

Order Type: Final Tribunal Order

Date of Order: 2022-08-24

Pronounced on: 2022-08-24

Background of the Case

Trilok Goel, a resident individual based in New Delhi, filed an appeal against the reassessment order passed by the Income Tax Officer (ITO), Ward-31(4), New Delhi, for the assessment year 2014-15. The reassessment was initiated under Section 147 of the Income Tax Act, 1961, after discrepancies were found between the income reported by the appellant and the actual bank deposits made during the relevant financial year.

The appellant, in his return of income, had reported gross receipts of Rs. 6,75,417, while deposits amounting to Rs. 1,73,88,076 were found in his bank accounts. This significant discrepancy led the Assessing Officer (AO) to believe that income chargeable to tax had escaped assessment, resulting in the initiation of reassessment proceedings under Section 147.

Appellant’s Grounds of Appeal

The appellant raised multiple grounds of appeal, including:

• The confirmation of an addition of Rs. 3,45,736 by the AO, which the appellant argued was unjustified and based on incorrect calculations.
• The alleged erroneous determination of turnover at Rs. 1,73,88,076 instead of the actual amount of Rs. 1,36,73,990, which was deposited in the accounts of the appellant’s proprietorship firm, Kalka Udyog.
• The contention that the commission rate of 2% applied by the AO was excessive and not supported by any material evidence, whereas the appellant claimed to have charged a commission rate between 0.4% and 0.5%.
• The challenge to the validity of the reassessment proceedings under Section 147, arguing that the notice under Section 143(2) was issued without proper jurisdiction.

Tribunal’s Observations and Findings

When the appeal was called for hearing, the appellant failed to appear despite being provided multiple opportunities. The Tribunal noted that the appellant’s absence indicated a lack of interest in pursuing the appeal. Given the appellant’s non-cooperative behavior, the Tribunal proceeded to decide the case based on the material available on record and the submissions of the Senior Departmental Representative (DR).

Regarding the core issue of the commission rate, the Tribunal observed that during the assessment proceedings, the appellant had admitted to providing accommodation entries on a commission basis. However, the appellant could not produce any evidence to substantiate the claimed commission rate of 0.4% to 0.5%. In light of this, the Tribunal upheld the AO’s decision to apply a commission rate of 2%, finding it to be reasonable under the circumstances.

The Tribunal also dismissed the appellant’s challenge to the validity of the reassessment proceedings under Section 147, affirming that the AO had followed due process in reopening and completing the assessment. The Tribunal found no merit in the appellant’s contention that the notice under Section 143(2) was issued without jurisdiction.

Conclusion

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, dismissed the appeal filed by Trilok Goel for the assessment year 2014-15. The Tribunal concluded that the appellant failed to justify the lower commission rates claimed and upheld the AO’s application of a 2% commission rate on the deposits made in the appellant’s bank accounts. Additionally, the Tribunal found no fault with the reassessment proceedings initiated under Section 147, affirming that the AO had acted within the bounds of the law.

This case highlights the importance of substantiating claims made in tax returns with credible evidence, especially when discrepancies are identified by the tax authorities. The Tribunal’s decision underscores the necessity for taxpayers to be diligent and cooperative during tax proceedings, as failure to do so can result in unfavorable outcomes.

Ultimately, the appeal was dismissed, and the additions made by the AO were upheld, reinforcing the need for transparency and accuracy in financial reporting and tax compliance.

Trilok Goel vs ITO Ward-31(4) – Appeal Dismissed Under Section 147 for AY 2014-15