VISHAL KUMAR,YAMUNA NAGAR V. ITO WARD-5 YAMUNANAGAR, YAMUNAN NAGAR

ITA 494/CHANDI/2025

AI Insights

The case involves Shri Vishal Kumar, who appealed against the order of the Commissioner of Income Tax (Appeals) confirming an addition of Rs.2,55,016 to his income for the assessment year 2018-19. This amount was initially included by his tax consultant erroneously, belonging to another person. Upon realizing the mistake, Shri Kumar filed a revised return declaring a significantly higher income and paid the due taxes, seeking the exclusion of the wrongly included income. Both the AO and the CIT (Appeals) upheld the inclusion of the amount, leading to the appeal before the Tribunal. The Tribunal found that the authorities had misused their powers and failed to assist the assessee in rectifying the mistake.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783399 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2018-2019
• Appeal Filed On: 03-04-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: SHRAWAN KUMAR GUPTA
• Keywords: Business income; Bonafide mistake
• Section: 44AD

Judgement Text

" आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ “एकल” चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “SMC” CHANDIGARH Įी संजय गग[, ÛयाǓयक सदèय BEFORE: SH. SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 494/CHD/2025 Ǔनधा[रण वष[ / Assessment Year : 2018-19 Shri Vishal Kumar, H.No. C-7-287, Gandhi Dham, Jagadhri. बनाम The ITO, Ward-5, Yamuna Nagar. èथायी लेखा सं./PAN NO: AVJPK7057K अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Ǔनधा[ǐरती कȧ ओर से/Assessee by : Shri Shrawan Kumar Gupta, Advocate राजèव कȧ ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr.DR सुनवाई कȧ तारȣख/Date of Hearing : 03.11.2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 04.11.2025 HYBRID HEARING आदेश/ORDER The present appeal has been preferred by the assessee against the order dated 25.04.2024 of the Commissioner of Income Tax (Appeals) NFAC, Delhi [in short ‘the CIT (Appeals)] pertaining to 2018-19 assessment year. 2. The appeal is time barred by 215 days. A separate application-cum-affidavit has been filed for condonation of delay. After considering the submissions made in the said Printed from counselvise.com ITA 494/CHD/2025 A.Y. 2018-19 2 affidavit, delay in filing the present appeal is hereby condoned. 3. The assessee in this appeal is aggrieved by the action of the CIT (Appeals) in confirming the addition of Rs.2,55,016/- made by the Assessing Officer (in short ‘the AO’) by assessing the business income of the assessee u/s 44AD of the Income Tax Act. 4. The brief facts of the case are that the assessee filed his return of income declaring income of Rs.2,75,320/- which included the income of Rs.2,55,016/- taken under the head ‘Business & Profession’ and offered u/s 44AD of the Income Tax Act. However, later on, it came to the knowledge of the assessee that the tax consultant of the assessee had wrongly included the aforesaid income of some other person into the return of the assessee. The assessee, immediately filed revised computation wherein the income from remuneration of partnership firm was shown at Rs.10,04,782/- and interest income of Rs.3013/- and further income from other sources of Rs.17,304/-, totaling Rs.10,25,100/-. The assessee also deposited the self-assessed tax on the said income and pleaded before the AO that the assessee did not have any business income of Rs. 2,55,016/- which was wrongly offered by the tax consultant u/s 44AD of the Income Tax Act. It Printed from counselvise.com ITA 494/CHD/2025 A.Y. 2018-19 3 was, therefore, requested to the AO not to add or assess the aforesaid business income of Rs.2,55,016/-, However, the AO did not agree with the contention of the assessee. He not only assessed the income offered by the assessee of Rs.10,04,782/- as remuneration received from partnership, Rs.3013/- as interest of partner’s capital and further Commission Income at Rs.17,304/- but also included aforesaid income of Rs.2,55,016/- in the same and assessed the total income at Rs.12,80,120/-. 5. Being aggrieved by the said order of the AO, the assessee preferred appeal before the CIT (Appeals), but remained unsuccessful. 6. I have gone through the record carefully. This case, apparently, is an example of misuse of the authority by the Income Tax Authorities. The assessee initially had offered income of Rs.2,72,320/- only. The assessee later on realized that the tax consultant had declared the income which did not belong to the assessee. The assessee, thereafter, offered almost five times of the income earlier declared by his consultant at Rs.10,25,100/- and also paid the due taxes. This was enough for the assessee to show his bonafide. However, not only the AO but also the ld.CIT (Appeals) included the amount of Rs.2,55,016/- into the income of the Printed from counselvise.com ITA 494/CHD/2025 A.Y. 2018-19 4 assessee despite the assessee being time and again pleading that the said amount was not the income of the assessee. It has been time and again held that Income Tax Authorities should charge legitimate taxes from the taxpayers and instead of punishing the assessees for their bonafide mistakes, they should rather assist the assessees in offering and assessing their correct income. However, the AO in this case has miserably failed to perform his duties and in assessing the true and correct income of the assessee, rather punished the assessee for his bonafide mistake. Under the circumstances, the impugned addition made by the AO is not sustainable and the same is ordered to be deleted. 7. In the result, appeal of the assessee stands allowed. Order pronounced on 04th November,2025. Sd/- ( संजय गग[) (SANJAY GARG ) ÛयाǓयक सदèय/ Judicial Member “Poonam” आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File Assistant Registrar Printed from counselvise.com "