GEETA DEVI SANGWAN,SADULPUR V. ITO, WARD-1, CHURU

ITA 796/JODH/2024

AI Insights

Geetadevi Sangwan appealed against the order of the National Faceless Appeal Centre (NFAC), which upheld the addition of Rs.11,07,594/- as sundry debtors to her income for the Assessment Year 2018-19. Initially, the Income-tax Officer (ITO) added the entire commission income of Rs.26,66,520/- to her income, which was partly contested. The CIT(A) deleted the addition of Rs.14,25,198/- but upheld the addition of Rs.11,07,594/-. The main contention was the application of different accounting methods in different returns filed under sections 139(1) and 148 of the Act. The Tribunal remanded the matter for a detailed examination of the claimed bad debt under the mercantile system of accounting.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716550 (ITAT-JODHPUR)
• Duration Of Justice: 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 14-10-2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE HARIDAS BHAT; REVENUE BRIJ LAL MEENA
• Keywords: Set aside; Business income; Revised return; Bad and doubtful debts; TDS; FORM 26AS
• Section: 147; 148

Judgement Text

"1 ITA No796/Jodh/2024 Geetadevi Sangwan IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, HON’BLE JUDICIAL MEMBER I.T.A No.796/Jodh/2024 (Assessment Year: 2018-19) Geetadevi Sangwan Sainik Colony, Sadulpur, Sadulpur, Churu 331023 PAN : AYWPS1089F vs Income-tax Officer, Ward-1, Churu, Rajasthan 331001 APPELLANT RESPONDENT Date of hearing 19/08/2025 Date of pronouncement 20/08/2025 O R D E R Per Bench : The instant appeal of the assessee filed against the order of the National Faceless Appeal Centre (NFAC), Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2018-19, date of order 23/08/2024. The impugned order emanated from the order of the Assessment Unit, Income-tax Department (in short, ‘the Ld.AO’) passed under section 147 r.w.s. 144B of the Act, date of order 27/02/2023. 2. The brief facts of the case are that the assessee filed the return under section 139(1) of the Act. The notice under section 148 was issued related to non disclosure of the primary facts. The commission income reflected in Form Present for Assessee Shri Haridas Bhat, CA Present for Revenue Shri Brij Lal Meena Addl.CIT-DR Printed from counselvise.com 2 ITA No796/Jodh/2024 Geetadevi Sangwan 26AS amount to Rs.26,66,520/- and accordingly, the TDS was deducted under section 194H of the Act. Pursuant to the notice under section 148, the assessee submitted return of income declaring business income in the nature of commission earned from M/s Future Maker Life Care Pvt Ltd. amount to Rs.14,25,198/- and amount to Rs.11,07,594/- is declared under the head ‘sundry debtors’. During the assessment proceedings, the Ld.AO issued show cause notice. Finally, the entire commission amount of Rs.26,66,520/- was added back with the total income. The aggrieved assessee filed an appeal before the Ld.CIT(A). The Ld.CIT(A) deleted the addition to the tune of Rs.14,25,198/- which was declared in the ITR filed in response to notice u/s 148 dated 29/05/2019. But the addition related to sundry debtors amount to Rs.11,07,594/- was upheld. Being aggrieved, the assessee filed an appeal before us. 3. The Ld.AR argued and stated that due to misconception of fact, the addition was confirmed by Ld.CIT(A). When the ITR was filed under section 139(1), the assessee has followed the cash basis of accounting, but while filing the ITR in response to notice u/s 148, the assessee has followed the mercantile system of accounting. The alleged amount of Rs.11,07,594/- was not received from the party. So, it is shown as ‘sundry debtors’. The Ld.AR prayed for deletion of the said addition. 4. The Ld.DR argued and stands in support of the orders of the revenue authorities. The Ld.DR invited our attention in appeal order, para 5.1.5 on page 9, which is extracted below:- “5.1.5 The second claim of the appellant is that the AO has erred in not allowing deduction on account of bad debts of Rs. 11,07,594/- which has been claimed for the first time in the ITR furnished in response to notice u/s 148. In this context, it is noted that neither during the assessment proceedings nor during appeal proceedings, the appellant has furnished any Printed from counselvise.com 3 ITA No796/Jodh/2024 Geetadevi Sangwan document to support her claim that amount of Rs.11,07,594/- is a bad debt. The appellant has not provided any document to prove that this amount has been included in income of the appellant and that such amount was outstanding against M/s Future Maker Life Care Pvt. Ltd. Further, no document in the form of communication to the debtor, any email etc. for enforcing recovery of the aforesaid amount has been furnished. Moreso, it cannot be overlooked that the appellant failed to make claim of bad debt in her original and revised return. Hence, the claim of bad debt of Rs.11,07,594/- made by the appellant is rejected.” 5. We heard the rival submissions and considered the documents available on the record. The assessee declared the income which is shown in Form 26AS received from M/s Future Maker Life Care Pvt Ltd. the balance amount which is declared as ‘sundry debtors’ amount to Rs.11,07,594/- was duly rejected and confirmed by the Ld.CIT(A). We find that the assessing officer hasto verify the said amount, as to whether it is related to its business considering the books of account of the assessee. We remand the matter to the file of the Ld.Jurisdictional Assessing Officer (JAO) to verify the same in the light of section 36(1)(vii) of the Act and to adjudicate the matter related to sundry debtors de novo. Needless to say, the assessee should get a reasonable opportunity of hearing in set aside assessment proceedings. On the other hand, the assessee should be diligent and co-operative in the set aside assessment proceedings, for quick disposal of the assessment. 6. In the result, appeal of the assessee bearing ITA No.796/Jodh/2024 is allowed for statistical purpose. Order pronounced in the open court on 20th August, 2025 Sd/- sd/- (DR.MITHA LAL MEENA) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Jodhpur, Dt : 20th August, 2025 Pavanan Printed from counselvise.com 4 ITA No796/Jodh/2024 Geetadevi Sangwan Copy of the Order forwarded to: 1. अपीलाथŎ/The Appellant , 2. Ůितवादी/ The Respondent. 3. आयकरआयुƅ CIT 4. िवभागीयŮितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Jodhpur 5. गाडŊफाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Jodhpur Printed from counselvise.com "