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2022 (11) TMI 188 - AT - Income TaxRectification of the mistake committed in the return of income - Assessment of the returned loss - taxable income whilst processing us 143(1) of the Act - Deduction of remuneration partner from the presumptive income - Non maintaining the books of accounts - as argued notice under section 139(9) had been served upon the assessee within the due time - 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 - mistake committed by the assessee 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. HELD THAT:- 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. High Court in the case of Devendra Pai [2021 (12) TMI 1218 - KARNATAKA HIGH COURT] held that AO not supposed to take advantage of assessee’s ignorance to collect tax more than legitimate tax. Keeping in view of the above principles, and in the interest of justice, we are hereby restoring the file to the assessing officer to grant a fresh opportunity of hearing to the assessee, and if the assessee is able to substantiate its claim as stated before us, then an opportunity may be granted for the assessee to rectify the inadvertent mistake made by the assessee in filing the return of income, which could not be rectified since notice under section 139(9) of the Act could not be served on the assessee within time so as to enable the assessee to rectify the mistake which had been done in the return of income. Appeal of the assessee is allowed for statistical purposes
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