Ex parte professional income assessment revised to 8% of receipts, with TDS credit and Chapter VIA deductions to be reconsidered.

Ex parte professional income assessment may be revised on a reasonable basis where the assessee's explanation and supporting material were not properly considered. The Tribunal noted that the assessee, engaged in professional consultancy, had placed written submissions and documents before the first appellate authority, but these were not duly examined; it therefore directed estimation of professional receipts at 8% of gross receipts. The Tribunal also directed a fresh assessment after allowing TDS credit and considering eligible deductions under Chapter VIA, so statutory credits and deductions are examined in the de novo proceedings.

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Issues: Whether the professional receipts of the assessee should be estimated at 8% for assessment year 2010-11 and whether the Assessing Officer should grant TDS credit and allow deductions under Chapter VIA while making a fresh assessment.

Analysis: The assessee had not appeared before the Assessing Officer because of ill-health and the assessment had been completed ex parte. In appeal, the Tribunal noted that written submissions and supporting documents were placed before the first appellate authority, but the matter was not properly considered. Since the assessee was engaged in professional consultancy with gross receipts of Rs. 6,34,765, the Tribunal found it to estimate income at 8% of the receipts. It also directed that the assessment be framed afresh after allowing credit for TDS and considering eligible deductions under Chapter VIA.

Conclusion: The addition was interfered with in part, the assessee's professional income was directed to be computed at 8% of gross receipts, and the Assessing Officer was directed to pass a de novo assessment after granting TDS credit and Chapter VIA deductions.

Ratio Decidendi: Where an assessee's explanation and supporting material are not properly considered in an ex parte assessment, income from professional receipts may be estimated on a reasonable basis and statutory credits and eligible deductions must be examined in fresh assessment proceedings.

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