Loading judgment…
Facts
The Assessing Officer (AO) rejected the assessee's claim to pay tax under section 44AD at 8%, stating the assessee was a commission agent and thus ineligible. The CIT(A) dismissed the appeal for non-prosecution after the assessee failed to appear.
Held
The Tribunal noted that the assessee's non-appearance before the CIT(A) was due to issues with his representative and personal ailment, not wilful. The Tribunal found it in the interest of justice to grant the assessee another opportunity.
Key Issues
Whether the assessee is eligible to claim tax benefits under Section 44AD and whether the dismissal of appeal by CIT(A) for non-prosecution was justified.
Sections Cited
44AD, 44AD(6), 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, BANGALORE “B” BENCH, BANGALORE
Anand Immanuel Panchikal DCIT, Circle 6(1)(1) B3, South Avenue, No. 12 II Floor, BMTC Building 17th B. Main, 6th Block vs. Koramangala 560095 Koramangala 560095 PAN – ABQPP5573J (Appellant) (Respondent) Assessee by: Shri Zain Ahmed Khan, CA Revenue by: Shri Subramanian S., JCIT-DR Date of hearing: 26.06.2024 Date of pronouncement: 04.07.2024 O R D E R Per: Soundararajan K.,J.M. This appeal filed by the assessee challenges the order of the National Faceless Appeal Centre, Delhi (CIT(A)) dated 29.12.2023 in respect of Assessment Year (AY) 2017-18.
The brief facts of the case are that the ld. Assessing Officer (AO) rejected the claim of the assessee to pay tax u/s. 44AD of the Income Tax Act, 1961 (the Act) at 8% on the ground that the assessee is a commission agent and, therefore, as per Sec. 44AD(6) of the Act he is not eligible to pay tax u/s. 44AD. Against the said order the assessee filed an appeal before the CIT(A) and contended that the mere deduction of TDS by the payee would not treat the petitioner as commission agent and therefore prayed to set aside the order. The assessee further contended that no show cause notice was issued by the ld.
Anand Immanuel Panchikal AO before passing the assessment order and, therefore, the same is against the principles of natural justice. The CIT(A) issued hearing notices on 5 occasions but the assessee had replied only for the notice dated 12.05.2023 and sought for an adjournment and thereafter no appearance was made before the CIT(A) and, therefore, the CIT(A) dismissed the appeal for non-prosecution.
Against the said order of the CIT(A) the present appeal has been filed by the assessee before this Tribunal. At the time of hearing the learned A.R. of the assessee submitted that the assessee was not properly guided by his then authorised representative and, therefore, the assessee was not aware of the proceedings before the ld. CIT(A). Further, the learned A.R. submitted that the assessee was also having some ailment and, therefore, he was not able to follow up the appeal proceedings. Therefore, the non-appearance was neither wilful not wanton and prayed to allow the appeal.
The learned D.R., on the other hand, relied upon the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the rival contentions and perused the material on record. On going through the assessment order, the ld. AO had issued notices u/s. 143(2) and 142(1) of the Act and also granted an opportunity of being heard about the escapement of income. But the AO citing time barring, had passed the assessment order thereafter. Further the assessee was not able to make out his case before the ld. CIT(A), as he was not informed about the proceedings by the then authorised representative and, therefore, the ld. CIT(A) had passed an exparte order. Therefore, in the interest of justice we are giving one more opportunity to the assessee to appear before the ld. AO toexplain the facts in detail.
We, therefore, set aside the orders of the lower authorities and remit the issue to the file of the AO to decide the issue afresh after granting an Anand Immanuel Panchikal opportunity of being heard to the assessee. We also make it clear that the assessee should cooperate with the ld. AO in completing the assessment at the earliest without seeking unnecessary adjournments. In case of failure the assessee will not get any leniency.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 4th July, 2024.