Salman Mujeer Vs ITO (ITAT Bangalore)
Bangalore ITAT Restores 8% Profit Estimation on ₹2.52 Crore Export Turnover for Fresh Adjudication
The assessee carried out exports amounting to ₹2,52,44,434 during AY 2016-17 but did not file his return of income. Reassessment proceedings were initiated based on information flagged under the CBDT’s Risk Management Strategy.
During the proceedings, the assessee furnished his sales register, bank statements, VAT returns, audited financial statements and export invoices. However, as sufficient evidence supporting the income and expenditure was not produced, the AO completed the assessment on a best-judgment basis and estimated profit at 8% of the export turnover, resulting in an addition of ₹20,19,555.
The CIT(A) dismissed the appeal because the assessee did not respond to the hearing notices. Before the ITAT, the assessee appeared through an authorised representative and undertook to furnish all the documents necessary to substantiate the actual business income and expenses.
Considering the circumstances, the Tribunal granted the assessee another opportunity and restored the matter to the jurisdictional AO for de novo adjudication. The assessee was directed to furnish all supporting evidence and fully cooperate; failing this, the AO would be free to assess the income based on the material available on record.
The ITAT also condoned the 116-day delay in filing the appeal. It accepted the explanation that the CIT(A)’s notices and order had been sent to the consultant’s email address, due to which the assessee remained unaware of them.
List of Cases Discussed / Relied Upon
- Collector Land Acquisition, Ananth Nag vs. MST Katiji and others (Supreme Court), reported in 1987 SCR (2) 387.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. The assessee has filed the present appeal against the impugned order dated 09.09.2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”] for the assessment year 2016-17.
2. The present appeal is delayed by 116 days. Along with the appeal, the assessee has filed an application seeking condonation of delay, duly supported by the affidavit of the assessee. As per the assessee, while filing the appeal before the learned CIT(A), E-mail ID of the consultant was mentioned in the Form 35. Accordingly, the assessee was completely unaware of the notices issued by the learned CIT(A) during the appellate proceedings and the impugned order, which was sent to the email address of his consultant. It is further submitted that only upon receiving a communication from the Department, the assessee came to know about the impugned order passed by the learned CIT(A). Accordingly, immediately thereafter, the assessee took necessary steps for filing of the present appeal. Thus, as per the assessee, the delay in filing the present appeal is neither deliberate nor intentional and has occurred due to the circumstances beyond the control of the assessee.
3. We find that the reasons stated by the assessee for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon’ble Supreme Court in the case of Collector Land Acquisition, Ananth Nag vs. MST Katiji and others, reported in 1987 SCR (2) 387. It is well-established that the Rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the assessee does not stand to benefit from the late filing of the present appeal. In view of the above and having perused the application and affidavit filed by the assessee, we are of the considered view that there exists sufficient cause for not filing the present appeal within the limitation period, and therefore, we condone the delay in filing the appeal by the assessee, and we proceed to decide the appeal.
4. We have considered the submission of both sides and perused the materials available on record. The brief facts of the case are that, on the basis of the information flagged as per the Risk Management Strategy formulated by the CBDT, it was noticed that the assessee had carried out an export for a value exceeding Rs. 5 lakh. Since the assessee did not file its return of income for the year under consideration despite having high- value transactions, notice under section 148A(b) of the Act was issued to the assessee to show cause as to why the notice under section 148 of the Act should not be issued as the income chargeable to tax for the year under consideration has escaped assessment. However, the assessee failed to respond to the said notice. Accordingly, on the basis of the material available on record, an order under section 148A(d) of the Act was passed declaring that it is a fit case for the issuance of a notice under section 148 of the Act. Consequently, notice under section 148 of the Act was issued on 24.03.2023, inter alia, requiring the assessee to furnish the return of income within 30 days from the date of service of the notice. However, the assessee did not file a return of income in response to the said notice. Thereafter, statutory notices under section 142(1) of the Act were also issued, which were also not responded by the assessee. In response to the show cause notice, the assessee submitted that he made an export turnover of Rs. 2,52,44,434/- during the year under consideration and, due to health problems and unavoidable circumstances, could not file the return of income. In support of his submission, the assessee also furnished sales register, statement of his bank account maintained with Standard Chartered Bank and copies of return in Form VAT 100 for the period from April 2015 to February 2016. Upon perusal of the audited financial statements, invoices and bank statements of Standard Chartered Bank, it was observed that the total export sales made by the assessee for the year under consideration were Rs. 2,52,44,434/-. As the assessee failed to produce any documentary evidence in support of its income and expenditure, the Assessing Officer (“AO”) vide order dated 21.03.2024 passed under section 147 r.w.s. 144 r.w.s. 144B of the Act considered the total turnover of the assessee as per the shipping bills for exports declared by the assessee i.e. Rs. 2,52,44,434/- and estimated the profit on presumptive basis at 8% of the said total turnover. Accordingly, the AO made an addition of Rs. 20,19,555/- to the total income of the assessee.
5. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee in the absence of any response to the hearing notices issued during the appellate proceedings. Being aggrieved, the assessee is in appeal before us.
6. Now, in the present appeal before us, t he assessee is duly represented by the learned Authorised Representative (“learned AR”) and wishes to pursue the litigation against the addition made by the AO. During the hearing, the learned AR submitted that, given an opportunity, the assessee will submit all the details in support of its case.
7. Accordingly, in view of the facts and circumstances as noted above, we deem it appropriate to grant another opportunity to the assessee to represent his case. Therefore, we restore the matter to the file of the Jurisdictional AO for de novo adjudication, with a direction to the assessee to file all details in support of his claim for necessary verification. We further direct the assessee to fully cooperate in the assessment proceedings and furnish any other information/documents as may be sought by the AO for complete adjudication of the issue involved, otherwise the AO shall be at liberty to assess the income on the basis of material available on record. Needless to mention, no order shall be passed without affording reasonable and adequate opportunity of hearing to the assessee. With the above directions, the impugned order is set aside, and grounds raised are allowed for statistical purposes.
8. In the result, the appeal by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 18-Aug-2026.
