- (1.) This order shall dispose of ITA Nos. 400 and 555 of 2009 as learned counsel for the parties are agreed that they raise identical issues. For brevity, the facts are being taken from ITA No. 400 of 2009.
(2.) This appeal has been filed by the revenue under section 260A of the Income-tax Act, 1961 (in short ''the Act'') against the order dated 27.11.2008 passed by the Income Tax Appellate Tribunal, Chandigarh Bench ''A'', Chandigarh, (hereinafter referred to as ''the Tribunal'') in ITA No. 433/Chandi/2008, relating to the assessment year 2001-02, raising the following substantial question of law:- Whether on the facts and in the circumstances of the case the Hon'ble Tribunal was right in law in scaling down of net profit rate to 5 per cent against 8 per cent on the work done by the assessee?
(3.) Put shortly, the facts necessary for adjudication as narrated in the appeal are that upon notice under section 148 of the Act dated 26-3-2003, the assessee-company filed its return on 30-10-2003 declaring an income of Rs. 1,98,380, whereas it was required to file the same within a period of 30 days from the date of service but as the assessee failed to do so, notice under section 142(1) of the Act was issued on 22.10.2003. The assessment was completed by applying the provisions of section 44AD of the Act in the case of a Civil Contractor computing the profit at the rate of 8 per cent of the total receipt for the work done by the assessee at Rs. 4,56,880. Feeling aggrieved by the assessment framed, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) [in short ''the CIT(A)''] who vide order dated 4-3-2008 dismissed the appeal. On further appeal by the assessee, the Tribunal vide order dated 27-11-2008 directed the Assessing Officer to apply the rate of 5 per cent as against 8 per cent applied by it. Hence, the present appeal by the revenue.;