AMAR CHAND GANGWAL,GUWAHATI V. INCOME TAX OFFICER, WARD-4(1), GUWAHATI, GUWAHATI

ITA 144/GTY/2025

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The case involves Amar Chand Gangwal, who appealed against the order of the Additional/Joint Commissioner of Income Tax (Appeals)-1, Noida, which was passed on 17.12.2024 for the assessment year 2017-18. The primary contention was regarding the application of section 44AD of the Income Tax Act, 1961, which pertains to presumptive taxation for certain businesses. The appellant argued that his turnover did not necessitate an audit under section 44AB, and thus, he was not required to compute his income under section 44AD. The ITAT found that the lower authorities incorrectly assumed the mandatory application of section 44AD and allowed the appeal, thereby rejecting the additional income assessed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782941 (ITAT-GUWAHATI)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 03-06-2025
• Other Referred Cases: Hindustan Unilever Ltd. Vs. Commissioner of Central Excise (2014) 3 GLR 432
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Condonation of delay; Business income; Opportunity of being heard
• Section: 44AD

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI (VIRTUAL HEARING AT KOLKATA) SHRI MANOMOHAN DAS, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No. 144/GTY/2025 Assessment Year: 2017-18 Amar Chand Gangwal, Amar Chand Gangwal, Steel India, S.J. Road, Athgaon, Guwahati - 781001 [PAN: AHEPG0829J] .....................…...……………....Appellant vs. Income Tax Officer, Ward-4(1), Guwahati, Aaykar Bhawan, G.S. Road, Christian Basti, Guwahati - 781005 ................................. Respondent Appearances by: Assessee represented by : R.K. Joshi, Advocate Department represented by : Kausik Ray, JCIT Date of concluding the hearing : 15.10.2025 Date of pronouncing the order : 28.10.2025 ORDER PER SANJAY AWASTHI, ACCOUNTANT MEMBER: 1. In this case, there is a delay of 95 days which has been requested to be condoned as under: “1. The above appeal has been filed before your honour under section 253(1) of the Income Tax Act, 1961 challenging the order dated 17.12.2024 passed under section 250 of the said Act by the Ld. Addl/Joint Commissioner of Income Tax (Appeals) -1, Noida for the assessment year 2017-18. 2. I respectfully submit that the appeal could not be filed within the prescribed time due to unavoidable circumstances and difficulties beyond my control. The appeal was due to be filed on or before 28.02.2025. There is delay of 95 days only in filing of the appeal. 3. I am aged about 81 years and I am not conversant with e-mail, digital / internet Printed from counselvise.com I.T.A. No. 144/GTY/2025 Amar Chand Gangwal 2 world. I was not aware of passing of the aforesaid order dated 17.12.2024 by the Ld. Addl/Joint Commissioner of Income Tax (Appeals) -1, Noida. I received Notice under DIN INSIGHTNER/02/Service_Letter/2025- 26/4916123875280001 dated 5.05.2025 by speed post on 9.05.2025 sent from the Office of the Joint Commissioner of Income Tax, Range - 1, Aayakar Bhawan, (6th Floor), G. S. Road, Christian Basti, Guwahati - 781005. Along with the above notice, notices dated 20.12.2019, 24.03.2025 and 16.04.2025 issued under section 270A of the Act were also attached. On perusal of the aforesaid notices, I came to know about passing of the aforesaid order dated 17.12.2024. In support of the above, the appellant is filing herewith Affidavit dated 3.06.2025 executed before the Notary Public, Guwahati. Copies of the aforesaid notices along with envelop are also enclosed herewith for ready reference and records. 4. In the second week of May, 2025, the matter were discussed with Shri R. K. Joshi, Advocate who advised to file second appeal against the above appellate since relief can be had only by way of filing of the appeal. The said counsel required me to submit the relevant papers, details and/or documents for the above year. The relevant papers and documents were handed over to the said counsel in the last week of May, 2025. 5. On perusal of the relevant papers and documents and as advised by the aforesaid counsel, I preferred appeal against the aforesaid appellate order. The preparation of appeal petition took some time in view of pre-occupancy of the said counsel in unavoidable matters and the same is being filed before your honour. 6. The aforesaid factual position will show that the delay in filing of the appeal was not caused intentionally at any stage. I was not aware of passing of the aforesaid appellate order as stated above and as a result, no steps could be taken up for filing of the appeal earlier. 7. Reliance is placed on the decision of the Hon'ble Gauhati High Court in the case of Hindustan Unilever Ltd. Vs. Commissioner of Central Excise reported in (2014) 3 GLR 432 where in the Hon'ble Court in para 7 observed as under: \"7. Keeping in view the aforesaid observation in mine, when we examine the fact of this case, we are of the considered opinion that the Tribunal should have condoned the delay in filing the appeal rather than to dismiss it on the ground of limitation. It is apart from the fact that the delay was hardly of 95 days and secondly: now the ground which the appellant has stated in the present appeal, persuade us to condone the delay by holding that it constitutes sufficient cause within the meaning of section 5 of the Limitation Act. Condoning the delay always advances cause of justice and afford opportunity to parties to contest the case on merits whereas; not condoning the delay results in denial of justice and deprive them of an opportunity. By this expression, we do not want to say that in every case delay should always be condoned, but by and large, approach of the court should not be so technical, but it should be always to ensure that substantial justice is done by giving them an opportunity of being heard to both the parties.\" 8. In view of the above, it is respectfully submitted that I was prevented from filing the appeal in time on account of sufficient cause stated above and as such, it is a fit case for condonation of delay in the filing of the appeal. If the delay is not condoned, I shall suffer irreparable loss and injury. Under the facts and Printed from counselvise.com I.T.A. No. 144/GTY/2025 Amar Chand Gangwal 3 circumstances, it is earnestly requested that your honour may be pleased to consider my case sympathetically and condone the delay caused in the matter of filing of the appeal. The appeal may please be admitted for the ends of justice. And for this act of kindness, I shall remain very much thankful to your honour 1.1 Considering the reasons given in the said petition, the delay is hereby condoned and the appeal is admitted for adjudication. 2. The present appeal arises from the order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”), dated 17.12.2024, passed by the Ld. Additional/Joint Commissioner of Income Tax (Appeals)-1, NOIDA [hereafter “the Ld. Addl/JCIT(A)]. In this case, the assessee is seen to have filed his return of income showing income of Rs. 1,88,900/-. Admittedly, the turnover of business was Rs. 96,18,234/- during the year. The Ld. AO has held that the assessee should have got his accounts audited inspite of the fact that section 44AB of the Act mandates that such action is required only if the turnover of business is Rs. 1 crore or more. Thereafter, the AO proceeded to estimate net profit @ 8% of the turnover under section 44AD(5) of the Act. 2.1 Aggrieved with this action, the assessee approached the Addl/JCIT(A), where also he could not succeed since there is a finding in para 4.5 at page 6 of the impugned order that once the provisions of section 44AB of the Act were not applicable then the assessee should have declared his income u/s 44AD of the Act. 2.2 Further aggrieved, the assessee has approached the ITAT with the grounds which challenge the eventual addition of Rs. 5,80,559/-. 3. Before us, the Ld. AR stated that it was not necessary that the return of income was to be computed under the provisions of section 44AD of the Act. It was the submission that the assessee produced the books of accounts and supporting documents before the Ld. AO which did not result in any adverse comment thereon. It was the submission that the Printed from counselvise.com I.T.A. No. 144/GTY/2025 Amar Chand Gangwal 4 Ld. Addl. CIT(A) has assumed that computing income for a particular class of assessee is mandatory u/s 44AD. The Ld. AR assailed this presumption and the resulting action therein. 3.1 The Ld. DR relied on the orders of authorities below. 4. We have carefully considered the orders of authorities below and have gone through the records before us. It is clear that the provisions of section 44AD of the Act are not mandatory but only give ban option to an assessee for a presumptive computation of income in case of certain specified businesses. It is understood that the assessee always has an option to prepare a profit and loss account on the basis of books maintained by him. Thus, there is no necessity that the method adopted by the assessee would be substituted by the provisions of section 44AD of the Act. Accordingly, the action of both the Ld. AO/Addl/JCIT(A) cannot be supported and the assessee gets relief on the impugned addition. 3. In result, this appeal is allowed. Order pronounced on 28.10.2025 Sd/- Sd/- [Manomohan Das] [Sanjay Awasthi] Judicial Member Accountant Member Dated: 28.10.2025 AK, Sr. PS Printed from counselvise.com I.T.A. No. 144/GTY/2025 Amar Chand Gangwal 5 Copy of the order forwarded to: 1. The Appellant 2. The Respondent 3. CIT(A)- 4. CIT- 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "