RAJESH MITTAL,DEHRADUN vs. ITO, WARD-1(2)(2), DEHRADUN

The present appeal has been filed by the assessee against the order of ld. CIT(A), Dehradun dated 06.03.2019.

Following grounds have been raised by the assessee:

That the Ld. CIT(A) erred on facts and in law in passing an ex-parte appellate order as notices of hearing appear to have been sent by email despite the fact that in Form 35, it was duly mentioned that notices of hearing should not be sent through email.”

The only issue pertains to application of provisions u/s 44AD of the Income Tax Act, 1961. The assessee earned income from sale & purchase of derivatives which the AO held that the same should be treated as business income. The assessee has also incurred losses in the derivatives trading which have been duly filed before the AO. The AO held that the tax Audit Report has not been filed before the due date and ignored the Audit Report filed during the course of assessment proceedings. While different provisions govern the delay in filing of tax Audit Report, the action of the Assessing Officer not to consider the Audit Report while concluding the assessment and wrongly invoking the provisions of Section 44AD cannot be sustained.

Hence, the matter is remanded back to the file of the Assessing Officer to frame the assessment de novo considering the tax Audit Report. The assessee shall comply to the notices of the revenue authorities promptly without seeking any unnecessary adjournments.