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Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD
This appeal is filed by the assessee against the order of the Ld. Principal Commissioner of Income Tax-2, Hyderabad in F.No. 48/PR. CIT-2/263(2)/2018-19, passed U/s. 143 (3) r.w.s 263 of the Act for the A.Y. 2014-15.
At the outset, Ld. AR submitted before us that there is a delay of 233 days in filing the appeal before the Tribunal. In this regard, the assessee had filed an affidavit seeking condonation of delay wherein the reasons for not filing the appeal within the prescribed time limit was explained. For reference, the relevant portion from the aforesaid letter is extracted herein below: -
"……….. The order giving effect to the order U/s. 263 was served on 28/12/2019, I do not remember the person on whom it was served. As my tax consultant was not giving proper response, I have approached another Chartered Accountant who advised me to approach M. Anandam & Co, Chartered Accountants. I have accordingly approached them on the 24th Jan, 2020. I was informed that an appeal to the Income Tax Appellate Tribunal also and it should have been filed within 60 days of the receipt of the order U/s. 263 dated 25/3/2019. I was informed that the due date for filing of the appeal to income tax appellate Tribunal was 9/5/2019. They have given the appeal documents for signature on 27/01/2020, the delay works out to Rs. 233 days. I submit that the delay was not intentional or deliberate. I pray that the Hon’ble Members of the Income Tax Appellate Tribunal may kindly condone the delay and admit the appeal.”
On perusal of the affidavit filed by the assessee, it appears that the delay of 233 days in filing the appeal was due to change in the assessee’s Counsel as the earlier Counsel did not properly respond to the assessee. Considering the submission of the assessee in our view the delay in the present case is not attributable to the assessee. Therefore, in the interest of justice, we hereby condone the delay of 233 days in filing the appeal before the Tribunal and proceed to adjudicate the appeal on merits.
The assessee has raised several grounds in its appeal however, the crux of the issue is that:
“The Ld. CIT (A) has erred in directing the Ld. AO to redo the assessment after making necessary enquiries.”
The brief facts of the case are that the assessee is an individual trading in old tyres files his return of income for the AY 2014-15 on 27/08/2014 declaring income of Rs. 3,02,140/-. Thereafter the return was process U/s. 1/43(3) of the Act wherein the ld. AO assessed the income of the assessee @ 8% of the turnover of Rs. 94,95,485/- which works out to Rs. 7,59,639/-. Subsequently, the Ld. Pr. CIT made the following observation with respect to the assessment made by the Ld. AO U/s. 143(3) of the Act.
(i) Initially, assessee had admitted turnover of Rs. 8,16,000/- in the original return of income. Subsequently, when the return was taken up for scrutiny the assessee filed a revised return admitting his turnover at Rs. 94,95,484/- and offered income U/s. 44AD of the Act @ 8% which works out to Rs. 7,59,639/- . (ii) The Ld. AO had accepted the revised return filed by the assessee without further making any enquiry on the business of the assessee.
For the above stated reasons, the Ld. Pr. CIT invoked his powers U/s. 263 of the Act and directed the Ld. AO to redo the assessment after making proper enquiries.
At the outset, we do not find any infirmity in the order of the ld. Pr. CIT. If the turnover of the assessee exceeds Rs. 1 Cr then obviously he will not be entitled to be assessed U/s. 44AD of the Act. In that case, it will be mandatory on his part to maintain books of account and get his books audited. Whether the turnover is actually Rs. 94,95,484/- or more than that has not been verified by the Ld.AO. This could be verified only by examining the bank account of the assessee and also making enquiries from the clients of the assessee. This exercise the Ld. AO has not carried out. Therefore, it is right on the part of the Ld. Pr. CIT to direct the Ld. AO to redo the assessment after making proper enquiries, more so, when the assessee had initially admitted turnover of Rs. 8,16,000/- in the original return of income and thereafter revised the turnover to Rs. 94,95,484/- when the case was taken up for scrutiny. Therefore, the appeal of the assessee is devoid of merits.
In the result, appeal of the assessee is dismissed.
Pronounced in the open Court on 14th December, 2021.