MR. SHISHIR KUMAR PATTNAIK,SAMBALPUR vs. ITO,WARD-2(1), SAMBALPUR

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ITA 239/CTK/2024Status: DisposedITAT Cuttack29 August 2024AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that Section 44AD cannot be applied to cases where audit under Section 44AD is applicable. Therefore, the matter was restored to the Assessing Officer for readjudication.

What were the facts?

The assessee's appeal against the assessment order was dismissed by the CIT(A) NFAC due to non-representation. The Assessing Officer had made additions based on estimated net profit and interest income, applying Section 44AD and 44AE in a manner the assessee contended was incorrect.

What were the issues?

Whether the Assessing Officer correctly applied Section 44AD and 44AE for estimation of income, and if the CIT(A) erred in dismissing the appeal due to non-representation.

Which sections of the Income-tax Act were involved?

Section 44AD,Section 44AE,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,

Before: MANISH AGARWAL

For Appellant: Shri B.R.Panda, Adv
For Respondent: Shri S.C.Mohanty, ld Sr
Hearing: 29/8Pronounced: 29/8

Assessment Year : 2017-18 Shishir Shishir Kumar Kumar Pattnaik, Pattnaik, Vs. ITO, Ward ITO, Ward-2(1), At/PO: At/PO: Jamankira, Jamankira, Sambalpur Sambalpur Sambalpur-768107 768107 PAN/GIR No. No.AJYPP 5178 M (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : Shri B.R.Panda, Adv B.R.Panda, Adv Revenue by : Shri S.C.Mohanty, ld Sr .C.Mohanty, ld Sr DR Date of Hearing : 29/8 8/2024 Date of Pronouncement : 29/8 /8/2024 O R D E R Per Bench This is an appeal filed by the assessee ag This is an appeal filed by the assessee against the order passed ainst the order passed by ld CIT(A), CIT(A), NFAC NFAC dated dated 28 28.3.2022 in in Appeal Appeal No. No. CIT(A), Sambalpur/10259/2019 Sambalpur/10259/2019-20 for the assessment year 2017 2017-18.

2.

Shri B.R.Panda, B.R.Panda, ld AR appeared for the assessee and Shri the assessee and Shri S.C.Mohanty, ld Sr. S.C.Mohanty, ld Sr. DR appeared for the revenue.

3.

It was submitted by ld AR that in this case the assessment has been It was submitted by ld AR that in this case the assessment has been It was submitted by ld AR that in this case the assessment has been passed u/s.143(3) of the Act by inflating the passed u/s.143(3) of the Act by inflating the assessed income at Rs.46,48,770/ Rs.46,48,770/- by way of cryptic addition of net profit at Rs.17,81,069/ by way of cryptic addition of net profit at Rs.17,81,069/-

P a g e 1 | 3 from fuel station. It was the submission that the addition of Rs.11,63,998/- has been made by adopting the provisions of section 44AD of the Act and estimated net profit @ 8% from cement and rod business and added interest income separately from security deposits without any valid and cogent reasons. It was also the submission that the Assessing Officer has added Rs.90,000/- u/s.44AE of the Act in a hypothetical manner, thus the entire additions have been made on a very flimsy ground. It was the further submission that the ld CIT(A), NFAC dismissed the appeal of the assessee on the ground of non-presentation of the appeal. It was the submission that the matter may be restored to the file of the Assessing Officer for readjudication.

4.

In reply, ld Sr DR supported the orders of the lower authorities.

5.

We have considered the rival submissions. On perusal of the both the orders of the AO and ld CIT(A), it is noticed that there was no representation before the AO as well as ld CIT(A) by the assessee. The Assessing Officer has applied the provisions of section 44AD being @ 8% in a case where the turnover far exceeds, which requires audit u/s.44AD. This being so, the provisions of section 44AD cannot be applied to a case where audit u/s.44AD is applicable. Therefore, the issues in this appeal are restored to the file of the Assessing Officer for readjudication after granting the assessee adequate opportunity of hearing. It is also directed that the assessee shall cooperate in the set aside proceedings, failing which, the P a g e 2 | 3 Assessing Officer is at liberty to draw adverse inference and pass the order as per law.

6.

In the result, appeal of the assessee stands partly allowed for statistical purposes.

Order dictated and pronounced in the open court on 29/08/2024.

Sd/- sd/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 29/08/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : 1. The Appellant : Shishir Kumar Pattnaik, At/PO: Jamankira, Sambalpur-768107 2. The Respondent: ITO, Ward-2(1), Sambalpur 3. CIT(A), NFAC Pr. CIT, Sambalpur 5. DR, ITAT, 6. Guard file. //True Copy// By order

Sr.Pvt.Secretary ITAT, CUTTACK

P a g e 3 | 3

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