P C UDAYAKUMAR,CHENNAI vs. ITO, WARD 2(I/C), CHENNAI

This is an appeal filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-7, Chennai in ITA No.87/C.I.T(A)-7/2015-16 dated 31.01.2018 for the assessment year 2012-13.

It was submitted by ld.A.R that the appeal of assessee is delayed by 318 days for which the assessee has filed the necessary affidavit for condonation of delay. The ground raised is that the assessee had met with two wheeler accident, and consequent to accident, he had to undergo substantial medical treatment, which had also resulted in the business of assessee being affected and other related family problems rising. This has consequently delayed in filing of the appeal. The reasons given by the assessee is plausible and has not been found to be false. Therefore, the delay in filing of the appeal is condoned and the appeal is disposed off on merits.

It was submitted by ld.AR that the assessment has been completed exparte. It was submitted that the Assessing Officer has treated the entire receipts of assessee as ‘income from other sources’ and has not allowed the assessee’s claim of expenses. It was submitted that the return was filed on 04.08.2013 and the first notice was issued on 05.09.2014. It was submitted that some details have been called for, which had not been filed by the assessee. It was submitted that the assessee had erroneously filed the return in ITR-2 instead of ITR-4. It was submitted that the assessee may be granted another opportunity to substantiate his return before the Assessing Officer.

In reply, the ld.DR supported the orders of Authorities below.

We have heard the rival contentions and perused the material available on record. The fact of filing return under ITR-2 as against ITR-4 is only a technical defect. If the assessee has earned business income, assessee’s income is liable to be assessed as business income. A perusal of the assessment order shows that the Assessing Officer has assessed the income under the head ‘income from other sources’. Even if the income is to be assessed under the head ‘income from other sources’, the expenses incurred by the assessee for the purpose of earning such income is an allowable deduction. This has not been discussed by the Assessing Officer. Admittedly, the Assessing Officer also cannot be found fault with, as the Assessing Officer had granted the substantial opportunity to the assessee, and the details have not been produced by the assessee. This being so, in the interest of natural justice, the issues raised in the appeal of assessee are restored to the file of Assessing Officer for re- adjudication after granting assessee adequate opportunity to substantiate the nature of expenses.

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