Prakash Dipchand Kapadnis Vs ITO (ITAT Pune)
In the case of Prakash Dipchand Kapadnis Vs. ITO (ITAT Pune), the assessee, an individual, did not file a return for the Assessment Year 2013-14. The Assessing Officer (AO) used Form No. 26AS, which revealed commission income of Rs. 24,89,121 received by the assessee. Since no response was received from the assessee to the notices issued under section 148, the AO conducted a best judgment assessment under section 144, adding the entire gross commission income of Rs. 24,89,121 to the taxable income. The assessee appealed the decision to the National Faceless Appeal Centre (NFAC), but failed to comply with the hearing notice, resulting in the dismissal of the appeal.
The assessee then appealed to the Income Tax Appellate Tribunal (ITAT), challenging the addition of gross receipts instead of net income. The ITAT noted that the NFAC had dismissed the appeal without adjudicating on the merits as required under section 250(6) of the Income Tax Act. The Tribunal also observed that the AO had included the entire commission income as gross receipts rather than calculating the net income, which the assessee argued was the correct approach. The ITAT decided to remand the case back to the NFAC for fresh adjudication, granting the assessee another opportunity to present its case. The appeal was allowed for statistical purposes, and the NFAC was directed to carefully reconsider the issues after giving the assessee a chance to be heard.
