Presumptive taxation under section 44AD upheld where return filed in response to unproved notices; tax addition deleted

Presumptive taxation under section 44AD was held available where the return filed in response to a notice was treated as valid and timely because the assessing officer failed to establish service of earlier assessment notices. The tribunal found that notices (other than the one triggering the filed return) did not bear recipient identification and could not be treated as served; consequently the return could not be treated as belated. Operative effect: benefit of presumptive taxation granted and the impugned addition deleted, restoring the assessee's tax position.

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Issues: Whether the return filed on 09.01.2023 can be treated as filed in response to the notice under section 148/147 and, accordingly, whether the assessee is entitled to claim presumptive taxation benefit under section 44AD despite initial non-filing.

Analysis: The Court examined the record of issued notices and the material on service. The assessment proceedings were initiated by reopening under section 147/148 based on specific information. Apart from the notice dated 04.01.2023 (to which the return of 09.01.2023 was a response), the file did not contain evidence of valid service of earlier notices; a purported notice dated 29.03.2022 lacked the recipient's name and could not be treated as served. The Court applied the statutory requirement that entitlement to presumptive taxation under section 44AD depends on compliance with conditions, including the filing of return; where a return is filed in response to a valid notice, it cannot be treated as belated for the purposes of section 44AD. Considering these facts, the Court accepted the return of 09.01.2023 as filed in response to the notice and within time for claiming section 44AD.

Conclusion: The return filed on 09.01.2023 is valid as a response to the notice under section 148/147 and the assessee is entitled to the benefit of section 44AD; the addition made by the assessing authority is deleted and the appeal is allowed in favour of the assessee.

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