Ashok Ghelabhai Patel vs. Income Tax Officer, NFAC, Delhi

Parties Involved

Facts Summary

The assessee, Ashok Ghelabhai Patel, filed his return of income for the Assessment Year 2018-19, admitting a total income of Rs.9,14,570/-. The case was selected for complete scrutiny due to low income compared to large commission receipts. The Assessing Officer (AO) issued notices under sections 143(2) and 142(1) of the Act. During the assessment proceedings, the AO called for evidence of large commission of Rs. 1,85,43,071/-, salary of Rs.10,08,000/- debited to P&L A/c, and a GST penalty of Rs.2,100/-. The assessee failed to furnish any evidence regarding these expenditures. The AO disallowed all three expenses and passed the assessment order under section 143(3) r.w.s. 144B of the Act, assessing the total income at Rs. 2,04,64,741/-. The assessee appealed to the Commissioner of Income Tax (Appeals) (CIT(A)), who dismissed the appeal. The assessee then appealed to the Tribunal.…

Legal Issues

• 1. Whether the AO erred by finalizing the assessment without issuing a draft assessment order?
• 2. Whether the CIT(A) erred in disallowing the expenses of Rs. 10,08,000/- towards salary and Rs. 1,85,43,071/- towards commission?

Judgment Outcome

Decided in favour of Assessee.

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