Saju Kozhikkadan Paul vs. ITO Ward-53(5), New Delhi: Case Filed for 2015-16 Assessment Year – Appeal Dismissed Due to Invalid Return

Saju Kozhikkadan Paul vs. ITO Ward-53(5), New Delhi: Case Filed for 2015-16 Assessment Year – Appeal Dismissed Due to Invalid Return

Case Number: ITA 5998/DEL/2019

Appellant: Saju Kozhikkadan Paul, Delhi

Respondent: Income Tax Officer, Ward-53(5), New Delhi

Assessment Year: 2015-16

Case Filed On: 12th July 2019

Order Type: Final Tribunal Order

Date of Order: 20th April 2022

Pronounced On: 20th April 2022

Background of the Case

The appellant, Saju Kozhikkadan Paul, a resident of Delhi, filed an appeal against the order passed by the Commissioner of Income Tax (Appeals)-18, New Delhi, on 16th May 2019. The case pertains to the assessment year 2015-16. The appeal was brought before the Income Tax Appellate Tribunal (ITAT) challenging the validity of the assessment made by the Income Tax Officer (ITO), Ward-53(5), New Delhi.

The central issue in this case was the validity of the return filed by the appellant. Saju Kozhikkadan Paul had filed a return declaring a net income of NIL on 31st August 2015. However, the return was later deemed defective by the Central Processing Centre (CPC), which raised questions about the legitimacy of the assessment process conducted by the ITO.

Proceedings in the Tribunal

The appeal was heard by the Delhi “SMC” Bench of the Income Tax Appellate Tribunal through video conferencing. The bench was presided over by Shri Kul Bharat, Judicial Member. The hearing took place on 24th February 2022, but the appellant, Saju Kozhikkadan Paul, did not appear, nor was he represented by any counsel. The notice sent by the Registry to the appellant’s address was returned unserved with the comment “left,” and no alternative address was provided.

Given the absence of the appellant, the Tribunal proceeded with the hearing in his absence, considering the submissions and materials provided by the respondent, represented by Shri Sanjay Kumar, Senior Departmental Representative (DR).

Facts of the Case

The facts of the case reveal that the appellant filed his income tax return for the assessment year 2015-16, showing a net income of NIL. The case was selected for limited scrutiny under the Computer Assisted Scrutiny Selection (CASS) system. Subsequently, a notice under Section 143(2) of the Income Tax Act, 1961 was issued to the appellant.

During the assessment proceedings, the appellant raised an objection regarding the validity of his return. He argued that the return was defective, and therefore, the assessment made by the Assessing Officer (AO) was void ab initio. The appellant also contended that there is no provision in the Income Tax Act that allows an AO to declare a return as defective and then proceed with the assessment on the same defective return.

The AO, however, maintained that as per the Income Tax Department’s records (ITD), the return was considered valid. During the assessment, it was noted that the appellant had declared a total turnover of Rs.40,84,256 and reported a business loss of Rs.27,79,859, out of which Rs.2,89,011 was set off against short-term capital gains and income from other sources. The AO further noted that the appellant submitted a revised computation during the assessment, revising the income from NIL to Rs.5,66,280. The AO eventually assessed the income at Rs.5,75,750.

Aggrieved by the assessment, the appellant appealed to the CIT(A), who partly allowed the appeal by directing the AO to treat the figure of Rs.27,22,275 as turnover from liaison services and to compute the income at 8% of the total turnover. Unsatisfied with this outcome, the appellant filed the present appeal before the Tribunal.

Tribunal’s Analysis and Decision

During the Tribunal’s examination of the case, the main contention of the appellant was that the assessment was invalid due to the return being defective. The Tribunal reviewed the findings of the lower authorities, including the CIT(A) and the AO, and found that the appellant’s objections were without merit. The Tribunal noted that the appellant did not provide any material evidence to contradict the findings of the AO that the return was valid as per ITD records.

The Tribunal emphasized that the burden of proof was on the appellant to demonstrate that the return was defective and that the assessment based on such a return was void. However, in the absence of any substantial evidence from the appellant, the Tribunal found no reason to interfere with the findings of the lower authorities.

As a result, the Tribunal dismissed the grounds raised by the appellant, upholding the assessment made by the AO and the partial relief granted by the CIT(A). The Tribunal concluded that the assessment was valid and that the appellant’s contentions regarding the defective return were not supported by any credible evidence.

Conclusion

The dismissal of this appeal highlights the importance of ensuring that all procedural and documentary aspects of filing an income tax return are meticulously handled. The case of Saju Kozhikkadan Paul serves as a reminder that raising objections without substantial evidence will not suffice in the eyes of the Tribunal. The burden of proof lies on the appellant to provide clear and convincing evidence when challenging the validity of an assessment.

This case also underscores the critical role of proper communication and representation during the appellate process. The appellant’s failure to appear or provide an updated address resulted in the Tribunal proceeding in his absence, which likely affected the outcome of the case.

For other taxpayers, this case serves as a cautionary tale about the significance of adhering to procedural requirements and being prepared to substantiate any claims or objections made during the assessment process. The final decision, pronounced on 20th April 2022, reinforces the Tribunal’s commitment to upholding the findings of the lower authorities when the appellant fails to meet the required burden of proof.

Order Pronounced By: Shri Kul Bharat, Judicial Member

Final Order: Appeal Dismissed

Saju Kozhikkadan Paul vs. ITO Ward-53(5), New Delhi: Case Filed for 2015-16 Assessment Year – Appeal Dismissed Due to Invalid Return