VST ASSOCIATES ,BANGALORE V. INCOME TAX OFFICER, WARD-2(2)(2), BENGLAURU

ITA 2507/BANG/2024

AI Insights

The case involves VST Associates appealing against an ex-parte order from the CIT(A) which confirmed an intimation under section 143(1) of the Income Tax Act, 1961, regarding the assessment year 2017-18. The assessee had initially declared income under section 44AD, which was later adjusted under section 44ADA by the CPC. A rectification under section 154 was subsequently passed, reverting the income back to the assessee's declared amount but did not address the TDS issue. The CIT(A)'s dismissal of the appeal was contested due to non-consideration of the rectification order. The Tribunal, acknowledging the oversight, directed the JAO to re-evaluate the case in light of the rectification order and to apply the TDS benefit accordingly.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470460 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE; STANDING
• Assessee Lawyers: GANESH S.
• Keywords: Condonation of delay; Set aside; Revised return; TDS; Rectification of order
• Section: 154; 143(1); 44AD

Judgement Text

"ITA No.2507/Bang/2024 VST Associates, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “SMC’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No. 2507/Bang/2024 Assessment Year: 2017-18 VST Associates, 81 Sri Balaji Nilaya, 5th Cross Bapuji Layout Off Subbanna Garden, Vijayanagar, Bangalore North, Vijayanagar East SO, Bangalore Karnataka India 560 040. PAN NO : AAAFV9377K Vs. ITO, Ward 2(2)(2), Bangalore. APPELLANT RESPONDENT Appellant by : Sri Ganesh S., A.R. Respondent by : Sri Ganesh R Ghale, Standing counsel for department Date of Hearing : 04.02.2025 Date of Pronouncement : 11.02.2025 O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: Present appeal of the assessee is arising from the order of ld. Addl/JCIT(A)-5, Chennai dated 25.1.2024 having DIN & Order No. ITBA/APL/S/250/2023-24/1060099813(1) for AY 2017-18. 2. At the outset, I note that there was a delay in filing the appeal by the assessee for 270 days. The assessee has filed a condonation petition supported by the affidavit explaining the reasons for the delay which are detailed as under: ITA No.2507/Bang/2024 VST Associates, Bangalore Page 2 of 5 1. Only one notice intimating the date of hearing was given by the ld. CIT(A) and that too at the wrong e-mail ID, which could be verified from Form 35 filed in the memo of appeal. 2. There was death in the family. 3. The wife was suffering from certain medical illnesses. 2.1 In view of the above, the ld. A.R. submitted that there was sufficient cause which prevented the assessee to file the appeal within the stipulated time. 2.2 It was also pointed out that in the absence of any communication from the ld. CIT(A), the assessee could not appear during the appellate proceedings. Therefore, the ld. CIT(A) passed ex-parte order to the assessee. Accordingly, it was prayed to condone the delay and decide the issue on merit. 3. Considering the reasons for the delay, the ld. D.R. did not raise any objection for condonation of delay in filing the appeal by the assessee. 4. After considering both the sides and perusal of the records, I note that there was sufficient cause which prevented the assessee from filing the appeal within the stipulated time. Accordingly, I condone the delay and proceed to adjudicate the issue on merit of the case. 5. Before I dwell upon the issue on merit, it is necessary to take a note about the history of the case, which goes as follows: 5.1 The assessee filed the revised return of income in ITR-4 dated 31.5.2018 declaring income on presumptive basis u/s 44AD of the Income Tax Act, 1961 (in short “The Act”). The income declared by ITA No.2507/Bang/2024 VST Associates, Bangalore Page 3 of 5 the assessee was Rs.18,87,077/- which was computed by the CPC u/s 44ADA of the Act at Rs. 45,71,651/- vide intimation dated 15.12.2019. The assessee against said intimation filed a rectification application dated 2.1.2023. While the rectification application was in pending, the assessee filed the appeal before the ld. CIT(A) dated 27.1.2023. In the meantime, a rectification order was passed u/s 154 of the Act dated 21.6.2023 accepting the income of the assessee u/s 44AD of the Act as declared by the assessee in the return of income. As such, the grievance of the assessee was resolved in the rectification order passed u/s 154 of the Act dated 21-06-2023. However, in the rectification order, the benefit of TDS claimed by the assessee was not granted. 5.2 Subsequently, the ld. CIT(A) dismissed the appeal of the assessee vide order dated 25.1.2024 ex-parte to the assessee confirming the intimation generated u/s 143(1) of the Act dated 15.12.2019. Thereafter, an order giving effect (OGE) was passed by the AO in consequence to the order of ld. CIT(A) dated 25.1.2024, wherein the income of the assessee was determined u/s 44ADA of the Act but after giving the benefit of TDS via order dated 19.11.2024. As such, the order was passed by the ld. CIT(A) without considering the rectification order passed by the CPC u/s 154 of the Act dated 21.6.2023, wherein the income of the assessee was determined u/s 44AD of the Act as claimed by the assessee in the return of income. 6. The ld. A.R. appearing on behalf of the assessee before me made a limited contention that the issue may be restored back to the jurisdictional AO (JAO) to decide afresh in the light of rectification order passed u/s 154 of the Act dated 21.6.2023 and after allowing the benefit of TDS, which was originally allowed by the CPC u/s 143(1) of the Act dated 15.12.2019. ITA No.2507/Bang/2024 VST Associates, Bangalore Page 4 of 5 7. On the contrary, the ld. D.R. fairly admitted that the issue may be set aside to the file of JAO for giving necessary effect. 8. I have heard the rival submissions and perused the materials available on record. From the preceding discussion, I note that the grievance of the assessee has already been resolved by the CPC by passing an order u/s 154 of the Act dated 21.6.2023, which has not been taken into consideration by the ld. CIT(A) and therefore, the issue as discussed above has cropped up. Nevertheless, I am inclined to set aside the issue to the file of the JAO with the direction to take a note of the rectification order passed by the CPC u/s 154 of the Act dated 21.6.2023 and also grant the benefit of TDS to the assessee as per the provisions of law. Hence, the ground of appeal of the assessee is hereby allowed for statistical purposes. 9. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 11th Feb, 2025 Sd/- (Waseem Ahmed) Accountant Member Bangalore, Dated 11th Feb, 2025. VG/SPS ITA No.2507/Bang/2024 VST Associates, Bangalore Page 5 of 5 Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "