Tu Casa vs. ITO Ward 46(4), New Delhi – ITA 6048/DEL/2019 – Non-Compliance and Income Estimation Dispute for AY 2015-16

Tu Casa vs. ITO Ward 46(4), New Delhi – ITA 6048/DEL/2019

Assessment Year: 2015-16

In a contentious case between Tu Casa, a business entity in New Delhi, and the ITO Ward 46(4), the Income Tax Appellate Tribunal deliberated on issues arising from non-compliance with statutory notices and subsequent income estimation by the tax authorities for the assessment year 2015-16.

Case Background

Tu Casa faced scrutiny after filing a nil income return, despite substantial bank transactions. The IT department, after noting non-attendance to multiple notices, proceeded with an estimation of income. This decision was challenged by Tu Casa, citing a lack of receipt of notices as the basis for non-compliance.

Tribunal Proceedings

During the tribunal proceedings, it was noted that Tu Casa had a pattern of non-attendance. Despite the issuance of various notices, including a final opportunity notice concerning the rejection of books under section 145(3) of the Income Tax Act, the entity failed to make any representations. This led to the Assessing Officer estimating the income at 10% of gross receipts.

Decision and Implications

The Tribunal, acknowledging the right of appeal and the need for compliance, directed Tu Casa to contribute to the Prime Minister’s National Relief Fund as a precondition for a fresh hearing. This unique directive highlights the Tribunal’s approach to ensuring compliance while also managing the justice delivery system’s load.

Conclusion

The case of Tu Casa vs. ITO Ward 46(4) serves as a stark reminder of the consequences of non-compliance within the Indian tax system. The decision underscores the importance of responding to tax authorities’ notices and participating fully in the assessment process to avoid arbitrary income estimations and additional penalties.

Tu Casa vs. ITO Ward 46(4), New Delhi – ITA 6048/DEL/2019 – Non-Compliance and Income Estimation Dispute for AY 2015-16