Case Law Details
J. Doshi & Co. Vs ITO (ITAT Rajkot)
ITAT Rajkot held that department cannot take away rights of the assessee just by inadvertent mistake committed by the assessee at the time of return filing.
Facts- The assessee’s claim of interest and remuneration paid to partners was disallowed on the mistake committed by the assessee. The mistake committed was that at the time of filing return of income was that though the assessee was not required to maintain the books of accounts since the return was filed under section 44AD of the Act, however in the return form the assessee had made inadvertently stated “yes” in the option asking whether the books of accounts are required to be maintained or not by the assessee. As a follow-up step, the assessee was required to enter the details of the profit and loss account and balance sheet in the return of income. However, the contention of the assessee is that since the notice under section 139(9) of the Act was not served on the assessee within time, he was unable to revise / rectify the mistake committed by it in the return of income within the due permissible time.
CIT(A) dismissed the assessee’s appeal. Being aggrieved, the present appeal is filed.
Conclusion- We observe that in the instant set of facts, the demand is arising on the assessee owing to the fact that at the time of filing return of income, the assessee inadvertently made certain errors as a result of which the remuneration and interest paid to partners was not allowed to the assessee. It is not the claim of the Department that the assessee was not eligible to be assessed to tax under section 44AD of the Act or that the interest and remuneration paid to partners did not find support from the terms of the partnership deed, however, the Ld. DR has suggested that the assessee is open to pursuing alternate remedy under section 154 of the Act. We also note that the DR has not challenged the fact that notice under section 139(9) of the Act had not been served upon the assessee within the due time.
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