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Facts
The assessee, a small contractor, filed his return for AY 2017-18 under the presumptive scheme (Section 44AD) declaring income at 8.12% of gross receipts. However, due to an inadvertent error in filing the ITR form (ITR-2 instead of ITR-4) and his limited understanding, the CPC treated the entire gross receipts as income from other sources. The assessee's appeal to the CIT(A) was dismissed in limine due to a significant delay.
Held
The Tribunal condoned the delay in filing the appeal before the CIT(A), recognizing the assessee's uneducated background and bonafide belief that the CPC's adjustments could be rectified. The Tribunal remitted the issue to the file of the Jurisdictional Assessing Officer for a de novo assessment.
Key Issues
Whether the delay in filing the appeal before the CIT(A) should be condoned, and whether the assessee's income should be assessed under the presumptive taxation scheme given the facts.
Sections Cited
143(1), 44AD, 154
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Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: Dr. MANISH BORAD & SHRI VINAY BHAMORE
आदेश/ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal at the instance of assessee for A.Y. 2017-18 is directed against the order of Ld. Addl/JCIT (Appeals) u/s 143(1) of the Income Tax Act dated 31.08.2018.
Assessee has raised following grounds of appeal:- 1) The learned Commissioner of Income Tax (Appeals) erred in law and on facts by upholding the assessment for AY 2017-18, which incorrectly treated the appellant's entire (100%) contract receipts of Rs. 845,000 as "Income from Other Sources" instead of business income, and in failing to consider the associated business expenses and actual profit margins in determining the taxable income. 2) The learned CIT(A) failed to recognize that the appellant's intention was to declare income for AY 2017-18 under the Presumptive Income Scheme as per Section 44AD which would have resulted in a taxable income of Rs. 67,600 (8% of Rs. 845,000) rathe than the entire contract receipts.
3) The learned CIT(A) erred in not considering that for AY 2015-16 and AY 2023-24, the appellant consistently used Form ITR-4, declaring income under the Presumptive Taxation Scheme (Section 44AD) at approximately 8% of turnover, demonstrating a clear pattern of income declaration.
4) The learned CIT(A) failed to appreciate that the appellant, a small contractor with limited formal education, inadvertently filed Form ITR-2 instead of the appropriate Form for A 2017-18, leading to the misclassification of income. 5) The learned CIT(A) erred in not directing a reassessment of the appellant's income for AY 2017- 18 based on the Presumptive Taxation Scheme, despite clear evidence of the appellant's eligibility and consistent use of this scheme in other years. 6) The learned CIT(A) erred in law and on facts by not condoning the delay in filing the appeal, which arose from the appellant's reliance on non-professional advice due t limited resources and understanding of tax procedures, thereby denying the opportunit for a just and equitable assessment of the case on its merits.
At the outset Ld. counsel for the assessee submitted that the Ld. CIT(A) has dismissed the appeal in Limine being barred by limitation as it was delayed by 1985 days. Referring to the reasons mentioned in Para 3 of the impugned order, prayer made for remitting the issue to the file of Ld. CIT(A) for necessary adjudication on merits. On the other hand Ld. DR supported the order of Ld. CIT(A).
We have heard rival contentions and perused the record placed before us. We observe that the assessee is an individual and is stated to be an uneducated person living in village at post Sangvi, Yawal, Jalgaon. The assessee declared income of Rs. 68,624/- in the return for A.Y. 2017-18 furnished on 17.03.2018 on presumptive taxation basis @ 8.12% of the gross receipts of Rs. 8,45,000/- The assessee inadvertently declared the income under the Head Income from other sources. However
Further the assessee aggrieved with the intimation u/s 143(1)(A) of the Act dated 07.03.2018 preferred appeal before Ld. CIT(A) on 08.03.2024. There was a delay of 1985 days in filing of the appeal. We after going through the reasons given by the assessee before Ld. CIT(A) for condonation of delay find that the assessee is an uneducated person, living in village and not well versed with the technological advancement and is dependent upon the Tax Practioner. However the assessee was under a bonafide belief that the wrong adjustments made by CPC can be rectified by way of filing application u/s 154 of the Act. The assessee did the needful but could not succeed. These given facts clearly demonstrate that the assessee could not have been benefitted by delay in presenting the appeal before Ld. CIT(A) and therefore taking a judicious and pragmatic approach and in the larger interest of justice and taking support from the judgement of Hon'ble Apex Court in the case of Collector, Land Acquisition vs. Master Katiji and Ors. 167 ITR 471 (Supreme Court) we condone the delay in filing of appeal before Ld. CIT(A). Ideally the issue raised on merits needs to be restored to the file of Ld. CIT(A). However we are of the considered view that since CPC had made an addition for the gross receipts, we deem it appropriate to remit the issue raised on merits to the file of Ld. Jurisdictional Assessing Officer (JAO) who shall carry out de novo assessment proceedings after giving reasonable and fair opportunity of hearing to the assessee. Assessee is also directed to remain vigilant and not to take unnecessary adjournment and update the correct e-mail and contact details on the Income Tax portal. Effective grounds of appeal raised by the assessee are allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 13th day of May, 2025.