JIKAR HUSSAIN,MAHIDPUR vs. INCOME TAX OFFICER, AGAR MALWA

Per Paresh M Joshi, J.M.:

This is an Appeal filed by the Assessee under section 253 of the

income tax Act 1961,[ herein after referred to as the Act for the

sake of brevity] before this tribunal as & by way of a second

Appeal. The Assessee is aggrieved by the order bearing No:-

ITBA/NFAC/S/250/2024-25/1074772105(1) dated

20.03.2025 passed by the Ld. CIT (A) u/s 250 of the Act,

which is herein after referred to as the “Impugned order”. The

ITANo.667/Ind/2025 Jikar Hussain Relevant Assessment year is 2011-12 and the corresponding

previous year period is from 01.04.2010 to 31.03.2011.

2.1 That as & by way of an assessment order made u/s 144

rws 147 of the Act, the total Income of the assessee was

computed & assessed at Rs. 12,90,750/-. Rs. 12,90,750/-

was considered as gross contract receipt. [194c]. No ITR was

filed by the assessee u/s 139 of the act. Notices 148 was

not replied & no ITR was filed in pursuance there off too by

the assessee. Notice(s) dated 12.06.2018,

10.10.2018,15.11.2018, 22.11.2018 [last opportunity] u/s

142(1) were too not complied by the assessee. Ld. AO finally

invoked S. 144 & computed & assessed Income of Rs.

12,90,750/- as exigible to Tax. The aforesaid assessment

order is dated 12.12.2018 which is herein after referred to as

the “Impugned Assessment Order”.

2.2 That the assessee being aggrieved by the aforesaid

“Impugned Assessment Order” prefers the first appeal u/s

246A of the act before the Ld. CIT(A) who by the “Impugned

ITANo.667/Ind/2025 Jikar Hussain Order” has dismissed the first appeal for the assessee on the

grounds & reasons stated therein. The core grounds & reasons

for the dismissal of the first appeal was as under:-

ITANo.667/Ind/2025 Jikar Hussain

ITANo.667/Ind/2025 Jikar Hussain 2.3 The assessee being aggrieved by the “Impugned Order”

has preferred the instant second appeal before this tribunal &

has raised the following grounds of appeal in the Form No. 36

against the “Impugned Order” which are as under:-

“GROUND NO. 01: That on the facts and in the circumstances of the case, the notice issued U/s. 148 and assessment order passed U/s. 147 r.w.s. 144 are wrong and invalid.

GROUND NO. 02: That on the facts and in the circumstances of the case addition of Rs. 1290750/-made to the total income of the appellant is also wrong, invalid and unjustified as: (a) the entire amount of gross contract receipt has been treated as income; (b) whereas as per section 44AD only 8% of gross contract receipts should have been considered as net profit/income.

GROUND NO. 03 (IN THE NATURE OF SUBMISSIONS): Both assessment and appeal orders have been passed without considering that:

(a) The appellant was engaged in labour contract work in which total gross contract receipts for AY 2011-12 were at Rs. 1290746/-. The TDS U/s. 194C (applicable on payment to contractors and sub- contractors) was also deducted at Rs.14788/- (@ about 1%) on the above gross contract receipts. Only net profit @ 8% as per Section 44AD at Rs. 103260/- was taxable income and not the entire gross receipt of Rs.1290746/-. This is a settled law and is also supported by various judicial decisions. (b) The nature of above amount of Rs.1290746/- that it was gross contract receipt (i.e., payment to contractor and sub-contractor as mentioned U/s.194C) was very well on the record of the IT Department as; (i) the gross receipt nature was duly mentioned in Form No. 26AS as appearing in ITD portal (ii) The gross receipt nature was also reflecting on NMS module of i-taxnet portal of IT Department on the basis of which the case has been reopened. (iii) The gross receipt nature has also been mentioned at many places in the assessment order U/s. 147 r.w.s. 144 itself. Despite that the Ld. AO has wrongly and without application of mind, assessed the entire gross receipts (U/s. 194C) as total income. (c) The assessment and CIT(A) appeal orders have been passed ex parte but it is a settled law that even in ex parte assessment /

ITANo.667/Ind/2025 Jikar Hussain appeal order, the material available on record should be considered, which has not been done in present case. (d) The notice U/s. 148 is invalid because the apparent total income U/s. 44AD at Rs.103260/- (@8% on contract receipt) was much below basic tax exemption limit of Rs. 160000/-. (e) The appellant has not received reasonable opportunity of being heard during assessment proceedings. The appellant is not literate and resides in rural area and was completely dependent on his counsel for notice compliances. (f) The CIT(A) hearing notice dated 06.03.2025 was sent on email id ashish_adv3373@yahoo.co.in of counsel Shri Ashish Trivedi who had already expired on 06.08.2021 (death certificate attached), therefore could not be responded. But full submissions were made on 25.03.2023 in response to immediately preceding hearing notice dated 03.11.2022. The 3rd ground of appeal was very well describing the issue and was in the nature of complete submissions. These have not been considered in CIT(A) order passed on 20.03.2025. (g) The earlier CIT(A) appeal hearing notices dated 26.01.2021 and 25.01.2021 could not be responded as earlier counsel Shri Ashish Trivedi was regularly remaining ill. But non response to them is not major issue because full submissions were made later on, before passing of the appeal order. PRAYER:The appellant craves leave to add, alter, amend or modify all or any of the above grounds of appeal at any time before completion of the hearing.”

3.1 The hearing in the matter took place before this tribunal on

13.04.2026 when none for & on behalf of the assessee

appeared before us. In the absence of Ld. AR the Ld. DR

assisted this Tribunal & submitted that basis perusal of the

documents on the record both the “Impugned Assessment

Order” & the “Impugned Order” are exparte. The assessee

seems to be have been non-compliant throughout. The Ld.

ITANo.667/Ind/2025 Jikar Hussain DR for the revenue however stated that in such a

circumstances it would be just, fair & convenient that the

“Impugned Order” be set aside & matter is remanded back to

the file of Ld. CIT(A)/Ld. AO as this tribunal deems fit. Hearing

was then concluded.

4.1 We have to decide the legality, validity and proprietary of the

“impugned order” basis records of the case & the rival submission

canvassed before us.

4.2 We have carefully perused the records of the case and have

heard the submissions.

4.3 We basis records of the case & after hearing & upon

examining the contentions of the Ld. DR canvassed before us,

are of the considered opinion that the “Impugned Assessment

Order” is under section 144 rws 147 of the act & some how or

the other the matter has not been adjudicated & adjudged

basis merits of the case. Even the “Impugned Order” is not

on merits. This Tribunal desires that the total Income of the

ITANo.667/Ind/2025 Jikar Hussain assessee should be computed and assessed on the real time

basis exigible to Tax in accordance with law by following the

due process of law under the act. This Tribunal also expects

the assessee to be compliant & should cooperate with the

department of Income Tax as & when the notice(s) etc are

issued. In brief this Tribunal desires the meritorious disposal

of both the “Impugned Assessment Order” as well as the

“Impugned Order”. The assessee cannot go in slumber mode.

In the result we are of the considered opinion that the

“Impugned Order” should be set aside & the matter should be

remanded back to the file of the Ld. AO for passing a fresh

order on the merits of the case. It is the expectation of this

Tribunal that the assessee would give his full & complete

details about his affairs, including e-mails of his & his counsel

where the notice(s) could be served effectively by the

department. The assessee is directed to attend hearings as &

when fixed & to file reply & details as sought by the Ld. AO.

4.4 In view of above premises drawn up by us, we set aside the

“Impugned Order” & remand the case back to the file of Ld.

AO on denovo basis, who shall now pass a speaking & well-

ITANo.667/Ind/2025 Jikar Hussain reasoned order. All the materials adversial to the assessee

to be disclosed by the department to assessee, so that

assessee can meet the case of the department.

5 Order

5.1 In the result the “Impugned Order” is Set aside as & by

way of remand back to the file of the Ld. AO.

5.2. The appeal of the assessee is allowed for statistical purpose.

Pronounced in open court on 17.04.2026.

Sd/- Sd/-

(BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER

Indore Dated : 17/04/2026 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore