JAYASHREE VIRENDRA SINGH THAKUR,PUNE vs. INCOME TAX OFFICER, WARD-6(1), PUNE, PUNE
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Income Tax Appellate Tribunal, PUNE BENCH, ‘A’ PUNE
Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER
PER R.S. SYAL, VP : These two appeals by the assessee relating to the assessment
year 2017-18 are directed against the common order passed by the
CIT(A) in NFAC on 28-07-2013. Whereas one appeal has
emanated from the Intimation issued u/s.143(1) and the second from
the second rectification order passed by the AO qua such an
Intimation. We have clubbed these appeals for disposal on account
of commonness of the issue.
Briefly stated, the facts anent to ITA No.940/PUN/2023 are
that the assessee filed original return declaring total income at
2 ITA Nos.939 & 940/PUN/2023 Jayashree Virendrasingh Thakur
Rs.10,23,024/-. In the computation of total income, the assessee
declared, inter alia, ‘Income from business’ at Rs.13,70,000/-
u/s.44AD at a rate higher than 6% of gross receipts amounting to
Rs.1,38,78,040/-. Intimation u/s.143(1) was issued invoking clause
(a)(vi) of the Act determining total income at Rs.79,32,800/-. The
reason for such adjustment has been given as the: “inconsistency in
the amounts shown in Sr.No.E3 44ADA (Profits and gains of
profession on presumptive basis) of Schedule BP and receipts
available in Form 26AS against sec.194J (Fees for professional or
technical services)”. The assessee filed an appeal before the
ld.CIT(A) urging that the addition in the intimation was
unwarranted because the assessee had shown income in terms of
section 44AD, being, special provision for computing profits and
gains from business of trading in certain goods. The ld. CIT(A) did
not concur.
ITA No.939/PUN/2023 is a connected matter inasmuch as the
assessee filed rectification application against the above referred
intimation u/s.143(1) contending that she filed the return computing
income u/s.44AD and the intimation u/s.143(1) wrongly took note
of section 44ADA, which was incorrect. The AO got convinced
and passed the rectification order accordingly. Thereafter, again a
rectification order was passed suo motu by the AO on 22-01-2021
3 ITA Nos.939 & 940/PUN/2023 Jayashree Virendrasingh Thakur
rectifying the original rectification order by holding that the total
receipts of the assessee were professional receipts and hence
covered u/s.44ADA and not u/s.44AD. That is how, he rectified
the original rectification order passed u/s 154. The assessee filed
appeal before the ld. CIT(A). Both the appeals, namely, the one
against intimation u/s.143(1) and the other against rectification
order passed u/s.154 came to be dismissed.
We have heard the rival submissions and gone through the
relevant material on record. Admittedly, the assessee filed the return
declaring total income at Rs.10,23,024/-. In the computation of
income, a sum of Rs.1,38,78,040/- was declared as gross receipts.
Section 44AD was applied for computing income at Rs.13,70,000/-,
which is higher than the stipulated minimum rate of 6% on the gross
receipts. The return was processed u/s.143(1)(a) making the
addition by taking note of the provisions of section 143(1)(a)(vi) of
the Act. At this stage, it would be relevant to mention that sub-
clause (vi) of section 143(1)(a) provides for making adjustment on
the ground that income appearing in Form No.26AS etc. was not
included in computing the total income in the return. This provision
was inserted w.e.f. 01-04-2017 and remained in force only for one
year. Third proviso to section 143(1)(a) mandates that no
adjustment shall be made under the sub-clause (vi) in relation to a
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return furnished for the assessment year commencing on or after
01-04-2018. This shows that the sub-clause (vi) was applicable
only for the year under consideration. In this regard, it would be
fruitful to note that the CBDT issued Instruction No.10/2017, dated
15-11-2017 in the context of processing of income-tax returns
u/s.143(1)(a)(vi). Para 3.2 of the Instruction provides that: “if the
receipts under these heads are completely omitted from the return,
then the provisions of section 143(1)(a)(vi) shall be applicable”. It
is observed that the total receipts as per Form No.26AS amounted to
Rs.1,38,19,548/-, as has been mentioned in the Intimation
u/s.143(1). The assessee declared gross receipts at Rs.1,38,78,040/-
in the computation of total income. It is unambiguous that the
amount of gross receipts declared by the assessee is neither
`completely omitted’ nor understated vis-à-vis the amount given in
Form No.26AS. It is not the case of the Revenue that a sum of
Rs.1,38,78,040/- declared by the assessee represents receipts
different from those taken note of in Form No.26AS.
Proceeding further, para 3.2 of the Instruction further provides
that: “wherever in the return Form, presumptive income under both
Sec.44AD and 44AE is disclosed, it will be difficult to correlate the
receipts in the return with the information in the three Forms.
Hence, any likely difference in the receipts under these items in the
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return with the receipts in the three Forms under this scenario would
be excluded from the purview of Sec.143(1)(a)(vi).” It is glaring
from the above that if income has been declared by an assessee
under the presumptive income scheme, inter alia, u/s.44AD, as was
also declared by the assessee, then the difference in the receipts in
the return with the receipts in the requisite Form (26AS in our case)
should be excluded from the purview of section 143(1)(a)(vi). This
shows that the per se difference in the amount of receipts shown and
as per the requisite Form should not be subjected for addition in
terms of clause (vi) of section 143(1)(a). However, an exception
has been carved out to this in the same para providing that: “where
the presumptive income from business either u/s.44AD or
profession u/s.44ADA alone are reported in the return and the gross
receipts from presumptive business or profession shown in the
return is less than the gross receipts as per the three Forms,
intimation proposing adjustment would be issued”. Main part of the
para applies to the case under consideration but not the exception
because the gross receipts from the presumptive business shown by
the assessee u/s.44AD are more than gross receipts in Form
No.26AS. To sum up, the position is that the assesee filed return
declaring total income u/s.44AD; the gross receipts for the
application of section 44AD exceeded the amount as per Form
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No.26AS; and the AO issued intimation by invoking clause (vi) of
section 143(1)(a). In such circumstances, the Intimation, making
adjustment by invoking clause (vi) of section 143(1)(a), is evidently
debarred as violating the prescription of Instruction No.10/2017,
which is binding on the Departmental Officers. We, therefore, hold
that the ld. CIT(A) was not justified in confirming the disallowance
contrary to the mandate and ambit of section 143(1)(a)(vi) of the
Act. The impugned order is overturned to this extent.
Once it is held that the adjustment could not have been made
in terms of section 143(1)(a)(vi) to the returned income in respect of
presumptive income declared u/s.44AD, naturally, there was no
reason to rectify the already and correctly rectified Intimation for
reaching a fresh conclusion that the adjustment made in the original
Intimation u/s.143(1) was correct and the rectification order was not
passed correctly. We, therefore, set-aside the impugned order.
In the result, both the appeals are allowed. Order pronounced in the Open Court on 22nd September, 2023.
Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 22nd September, 2023 सतीश
7 ITA Nos.939 & 940/PUN/2023 Jayashree Virendrasingh Thakur
आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The respondent 2. The Pr.CIT concerned 3. 4. DR, ITAT, ‘A’ Bench, Pune गाड� फाईल / Guard file. 5.
आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
Date 1. Draft dictated on 21-09-2023 Sr.PS 2. Draft placed before author 21-09-2023 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *
