Claim of exemption u/s 10(26) for Tribal Person remitted as PAN wrongly applied as Partnership

Claim of exemption u/s 10(26) for Tribal Person remanded when by ignorance PAN was wrongly applied in the name of Partnership Firm. 

In a recent judgment, ITAT Guwahati remitted the issue claim for exemption u/s 10(26) for Tribal Person when by ignorance PAN was wrongly applied in the name of Partnership Firm in place of Proprietorship Firm.

ABCAUS Case Law Citation:
4411 (2025) (02) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A), National Faceless Appeal Centre confirming the additions made in reassessment proceedings vide order passed u/s 147 read with section 144 of the Income Tax Act, 1961 (the Act).

The appellant assessee was proprietor of a firm named Lushai Engineers carrying on the business of Construction Contractor in Mizoram.  The assessee belonged to a Tribunal community and did not file the return of income u/s 139(1) of the Act. 

Based on the information available as per CIB/26AS, the Assessing Officer (AO) noticed that the assessee made significant transaction of cash withdrawal and/or deposit in bank account along with investment in mutual funds.

Statutory notice u/s 148 was served on the assessee after recording satisfaction and obtaining permission from the competent authority. Notices u/s 143(3)/142(1) were also served on the assesssee, however, there was no compliance by the assessee.  In the circumstances, AO completed the assessment after making various additions.

Aggrieved assessee preferred appeal before the CIT(A)/NFAC who vide impugned order affirmed the action of the Assessing Officer in making additions.

At the outset, the assessee submitted that there were certain additional evidences which the assessee intends to file before the Tribunal which goes to the root of the matter and an opportunity may be granted for going before the CIT(A)/NFAC for examining of the evidences.  It was also submitted that the CIT(A)/NFAC had treated the concern namely Lushai Engineers as a Partnership firm however it is a sole proprietary concern of the assessee who was a tribal person and eligible for exemption u/s 10(26) of the Act.

The Tribunal observed that the assessee claimed to be a Tribal person and was also contending from the beginning that due to his ignorance and wrong advice PAN was wrongly applied in the name of Firm Lushai Engineers as a Partnership Firm.

The Tribunal observed that the appellant stated that assessee was not well conversant with the procedure and income-tax laws and therefore was not aware of the notices of hearing. Thus, he could not participate in the proceedings which resulted in passing of ex parte orders.  The assessee submitted that he can file all the details along with evidences to substantiate his claims to the satisfaction of the Assessing Officer. 

Considering the facts and circumstances of the case, the Tribunal remitted the issue back to the file of NFAC for denovo adjudication after affording reasonable opportunities to the appellant, in accordance with law. The assessee was given liberty to file any evidence in support of his claim as deemed expedient.

Download Full Judgment Click Here >>

• Once ITR is filled in response to notice u/s 148 though late, notice u/s 143(2) is must – ITAT
• Petitioner was not disqualified in tender for giving EMD by way of FD not DD
• State Bank of India elects four Directors in its Central Board
• Declaration of additional income by increasing the WIP was not proper – ITAT
• Cash payment for purchase of land or property not violation of 269SS or 269T