Sudarshan Yellaiah Pathipaka vs. ACIT, Central Circle- 3

Parties Involved

Facts Summary

The assessee filed return of income on 02/10/2010 for the assessment year 2010-11 declaring total income at Rs.41,33,397/-. The original assessment was made u/s. 143(3) on 26/03/2013 assessing the total income at Rs.55,82,400/-. Meanwhile in pursuance of the order of the Ld. CIT (A)-11, Pune dated 17/03/2015, the income of the assessee was recomputed at Rs.41,33,400/- vide order dated 11/07/2016. Subsequently, it was noticed by the Ld. AO that the deposits of capital nature amounting to Rs.33,10,000/- was incorrectly written off. Since, the above sum had escaped assessment; the case was reopened u/s 147 of the Act and notice u/s.148 dated 16/03/2016 was sent to the assessee with prior approval of Ld. Pr. CIT(C), Pune. The reasons for the reopening of case was also supplied to the assessee. However, the notice was issued and served on the assessee by way of ‘affixture’ and served on the watchman of the building. In response to the notice issued u/s. 148, the assessee filed a letter dated 12/05/2016 and requested the Ld. AO that return filed on 02.10.2010 may be treated as return of income filed in response to the notice issued u/s. 148 of the Act. The Ld. AO has noted in the assessment order dated 09/12/2016 that on perusal of the Profit & Loss A/c for the financial year ended on 31.03.2010, it was seen that the assessee has debited a sum of Rs.33,10,000/- towards deposit written off (included in the construction expenses of Rs.5.06 crores). The advances/deposits were not take…

Legal Issues

• 1. Whether the National Faceless Appeal Centre, Delhi (NFAC) erred in passing the Order under section 250 of the Act without observing the principle of natural justice?
• 2. Whether NFAC erred in conforming the order passed by the Assistant Commissioner of Income Tax, Central circle-3, Thane under section 143(3) r.w.s. 147 of the Act?
• 3. Whether NFAC erred in treating the amount of Rs.33,10,000/-so written off as expenses incurred on acquiring capital asset and as such not allowable under section 37 of the Act?
• 4. Whether the interest charged under section 234A, 2348 and 234C of the Act were unjustified and unwarranted?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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