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Facts
The assessee received salary for AY 2018-19 but did not file an Income Tax Return. The Assessing Officer completed a best judgment assessment u/s 144, adding Rs. 31,55,084/- (gross salary after employer's deductions) to income and levied a penalty u/s 270A. The CIT(A) dismissed the assessee's first appeal, upholding the assessment and penalty.
Held
The Tribunal noted a discrepancy where the AO allowed deductions from salary but then added the entire gross salary, an aspect not considered by the CIT(A). Consequently, the Tribunal remanded the case to the CIT(A) for reconsideration, directing an adequate opportunity of being heard for the assessee. The appeal was allowed for statistical purposes.
Key Issues
Whether the entire gross salary can be added to income under a best judgment assessment when employer's deductions have already been allowed; and whether the CIT(A) erred by not addressing this discrepancy while upholding the assessment and penalty.
Sections Cited
Income Tax Act, 1961, Section 250, Section 133(6), Section 142(1), Section 144, Section 270A
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Income Tax Appellate Tribunal, : GAUHATI BENCH: GUWAHATI
Before: SHRI RAJESH KUMAR, HON’BLE & SHRI MANOMOHAN DAS, HON’BLE
ORDER
PER MANOMOHAN DAS, JM
The assessee filed this appeal against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC] Delhi (hereinafter referred to as the (“CIT(A)” dated 21.03.2025 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) and pertains to the Assessment Year [AY] 2018-19.
The brief facts of the case are that, the assessee received salary to the tune of Rs. 52,97,592/- during the financial year 2017-18 relevant to the AY 2018-19, however, no return of income was filed by Page 1 of 3 / GTY / 2025 Sailendra Khatowal-Vs- The ITO, Ward-1, Digboi AY: 2018-19 the assessee during the year under consideration. The assessee was asked to furnish details of source of income , such as bank statements, copy of 26AS, details of salary received amounting to Rs. 59,97,592/-. From Indian Oil Corporation. The assessee failed to comply the same. The Oil India Ltd. Confirmed that the assessee received Gross salary of Rs. 31,55,084/- during the year under consideration in response to the notice u/s 133(6). Notice u/ s 142(1) was issued to the assessee asking the details of income. The assessee failed to participate in the assessment proceedings. Hence, the learned Assessing Officer completed the assessment u/s 144 of the Act and has made addition of Rs. 31,55,084/- after allowing deductions allowed by the employer of the assessee under the head of income ‘salary’. Further pelaty was levied u/s 270A of the Act.
Being aggrieved, the assessee filed 1st appeal before the learned CIT(A) under section 270A of the Act. The ld. CIT(A) vide order dated 21.03.2025 dismissed the appeal of the assessee.
Being aggrieved, the assessee filed the present appeal before the Tribunal.
We observe that, the ld. CIT(A) dismissed the appeal of the assessee observing that there was under reporting on the part of the assessee and did not interfere with the penalty order imposed by the ld. AO.
We have considered the submissions of the Ld. AR that, there was no tax liability on the assessee in respect of the amount received as salary from the employer, Oil India Ltd. The employer already deducted tax on the salary income. There was no under reporting.
7. We observe that, the ld. AO allowed the deductions made by the employer on the salary amount. As deductions have been allowed by the ld. AO, then, how the entire salary amount of Rs. 31,55, 084/- can be added to the total income of the assessee? The ld. CIT(A) did not consider this aspect while disposing of the appeal of the assessee.
Page 2 of 3 / GTY / 2025 Sailendra Khatowal-Vs- The ITO, Ward-1, Digboi AY: 2018-19 Therefore, it is our considered opinion that, the case of the assessee should be remanded to the ld. CIT(A) to reconsider the case of the assessee. We direct the ld. CIT(A) to reconsider the case of the assessee after giving the assessee an adequate opportunity of being heard. Also, we set aside the order of the ld. CIT(A) dated 21.03.2025 for reconsideration of the case of the assessee. Thus, we allow the appeal of the assessee for statistical purposes only.
In the result, the appeals of the assessee is allowed for statistical purposes only. Order pronounced in the open court on this 0 6 t h day of 8. August, 2025.