In a recent ruling, the Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) remanded the matter with Rs. 5000 due to non-compliance with the notices by the assessee.
In this case, the assessee, the Academy of General Education, had filed Income Tax Returns for the assessment year ( AY ) 2018-19, declaring a total loss of Rs. 31,43,615.
The assessee’s case was selected for scrutiny, regarding the deductions claimed under income from other sources under Section 57 of the Income Tax Act, 1961. Although statutory notices and various opportunities were granted to the assessee by the Assessing Officer ( AO ), the assessee failed to respond adequately.
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At first, a draft assessment order was passed to disallow a deduction of Rs. 1,55,02,561 under Section 57 of the Income Tax Act, 1961, to which the assessee submitted a response. The AO, after considering the submissions, assessed a total income of Rs. 42,22,369.
The assessee, who was aggrieved by the above order, approached the First Appellate Authority ( FAA ) for relief.
The FAA dismissed the appeal based on available material due to the non-compliance of the various notices sent to the assessee. The assessee later on approached the ITAT.
The assessee submitted that the reason for non-compliance to the notices was due to poor handling of the case by its auditor and a lack of familiarity with the online tax portal. Through an affidavit, the assessee submitted that its auditor had failed to submit necessary responses during both the assessment and appeal stages.
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The ITAT bench, comprised of Keshav Dubey (Judicial Member) and Laxmi Prasad Sahu (Accountant Member), remanded the matter back to the AO for reconsideration, subject to the payment of Rs. 5,000 in costs.
The bench directed the assessee to update its communication details and cooperate fully with the proceedings.
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