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Showing contexts for: section 44af in Kanhaiya Lal Rai, Gautam Budh Nagar vs Ito, Ward- 2(1), Noida on 7 March, 2019Matching Fragments
7. That the order passed is further laconic and ironic in nature as there was no any requirement u/s 44AF of the Income Tax Act, 1961 to flic any Audit Report as alleged to be u/s 44A13 of the Income Tax Act, 1961.
8. That no reasonable and proper opportunity of being heard if any has ever been afforded by the Assessing Officer prior to conclude lump sum estimate of profit @ 35% of the gross receipts without the support of any material, arbitrarily, capriciously and due to his guess work only.
2. The brief facts of the case are that in this AIR information of cash deposits of Rs. 10,14,600/- in the saving bank account no.
07112010019700 maintained in the Oriental Bank of Commerce, Bhangel, Noida Gautambudhnagar by the assessee during the Financial Year 2008-09 relevant for the AY 2009-10 was received. The case of the assessee was reopened u/s. 147 of the Income Tax Act, 1961 (In short "Act") by issuing the notice u/s. 148 of the Act on 23.3.2016. Thereafter notice u/s. 142(1) of the Act dated 27.6.2016 alongwith questionnaire and notice u/s. 142(1) of the Act dated 10.9.2016, 26.10.2016 were issued. The Assessee submitted vide letter dated 1.12.2016 that earlier return filed on 22.4.2009 declared taxable income of Rs. 1,49,994/- may be treated as return filed in response to notice under section 148 of the Act. The AO on perusal of return, noticed that the assessee has declared the gross professional receipt of Rs. 14,12,520/- and declared the net profit of Rs. 2,38,810/- under section 44AF. The assessee was specifically asked to furnish the justification of applying the provision of u/s. 44AF of the Act, which is not applicable in the case of consultancy income and furnish the Audit Report u/s. 44AB of the Act as the professional receipts are above Rs. 10 lacs and date was fixed for compliance on 16.12.2016. In compliance the AR of the assessee submitted the written reply but could not furnish any justification of declaring the profit as per provision u/s. 44AF on professional receipts. Further the assessee could not submit any audit report u/s. 44AB of the Act and therefore, AO compute the professional income on estimation basis and made the addition of Rs. 2,55,572/- in the hands of the assessee by completing the assessment at Rs. 4,05,570/- u/s. 143(3) of the Act vide order dated 16.12.2016. Aggrieved with the assessment order, the assessee appealed before the Ld. CIT(A), who vide his exparte impugned order dated 28.6.2018 has confirmed the assessment order passed by the AO. Against the impugned order, assessee is in appeal before the Tribunal.
3. At the time of hearing, Ld. Counsel for the assessee has stated that the assessment order passed on 16.12.2016 u/s 143(3) of the Income Tax Act, 1961 by the Assessing Officer as upheld by the Ld. CIT(A) vide his order dated 28.06.2018, is perverse to the law and to the facts of the case, because of lump sum estimating the profit assessed @ 35% of the gross receipts of Rs. 14,12,520/-, though the appellant has declared GP @ 16.9% u/s 44AF of the I.T. Act, 1961. It was further submitted that Ld. CIT(A) has not granted any opportunity to the prior to dismiss the appeal for want of prosecution only. It was further submitted that Ld. CIT(A) did not adjudicate the appeal on merits and not afforded opportunity to the appellant to represent his case as the appellant has filed the request letter on 26.06.2018 against the first hearing fixed, which was not considered and summarily rejected in a casual manner. It was further submitted that Ld. CIT(A) is against the law and to the facts of the case, because of lump sum estimating the profit @ 35% of the gross receipts of Rs. 14,12,520/- thereby arriving the net profit of Rs. 4,94,382/-, without the support of any material either collected or ever placed upon records having nexus to the lump sum arriving the GP @ 35%. It was further submitted that Ld. CIT(A) has passed an illegal order by not accepting the GP declared @ 16.9%, though minimum profit required to be declared u/s 44AF comes to 5% of the gross receipts in the absent of any books of accounts required to be maintained. It was further submitted that there was any requirement u/s. 44AF of the Act to file any Audit Report as alleged to be u/s. 44AB of the Act. He further submitted that proper opportunity of being heard by the AO was not afforded prior to conclude lump sum estimate of profit @ 35% of the gross receipts without the support of any material, arbitrarily, capriciously and due to his guess work only. In view of above, he requested to quash the Ld. CIT(A) order and additions in dispute may be deleted. In support of his contention, he relied upon the various following case laws by which the issue in dispute is squarely covered:-