I offered 8% under 44AD for consultancy work. Can the AO push me into 44ADA at 50%?
Yes, where the work is professional in character. Liaison services, coordination of statutory no-objection certificates and related facilitation were held to require specialised technical knowledge and so to amount to 'technical consultancy', a specified profession under s.44AA(1) read with s.44ADA — which made s.44AD unavailable and the 50% rate applicable.
Decided by the ITAT (ITAT Raipur Bench — Shri Partha Sarathi Chaudhury (Judicial Member)) on 2026-07-02, reported as ITA No. 480/RPR/2026 (unreported). It bears on section 44ADA, section 44AD, section 44AA of the Income Tax Act 1961, in Presumptive Taxation & Audit matters.
A revenue-side decision, in the library because it is what the department will cite when it recharacterises presumptive business income as professional receipts. The test applied is whether the work calls for specialised skill and knowledge, not the label attached to the receipts in the return, and the list of professions in s.44AA(1) was read widely rather than narrowly.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee was the proprietor of M/s Geophoenix and offered income of Rs. 6,92,100 under section 44AD, treating his activity as a business. His gross receipts for the year were Rs. 37,80,000. The Assessing Officer took the view that the receipts were for professional or technical services falling within section 44ADA, under which 50% of gross receipts must be offered, and made an addition of Rs. 14,17,500 representing the difference. The CIT(A) upheld the addition. Before the Tribunal the assessee contended that section 44ADA had no application to him because his work was not a 'profession' referred to in section 44AA(1).
The addition was upheld. The assessee's work — liaison services, coordination of statutory no-objection certificates and related facilitation — required specialised technical knowledge and therefore amounted to 'technical consultancy', a specified profession under section 44AA(1) read with section 44ADA. Section 44AD was not available to him.
The Tribunal read sections 44AA and 44ADA together and held that the list of professions in section 44AA(1) is to be given a wide, not a narrow, construction. 'Technical consultancy' is one of the callings expressly named there, and what determines whether an activity falls within it is whether the work calls for specialised skill and knowledge rather than the label the assessee attaches to his receipts. Obtaining statutory no-objection certificates and performing liaison and facilitation work of the kind the assessee undertook cannot be done by a person without the relevant technical training. The character of the receipts, not the description in the return, governs the choice between section 44AD and section 44ADA. Since the receipts were professional receipts, the presumptive rate of 50% applied and the difference between that and the 8% offered was rightly added.
These works cannot be done by a layman and it requires specific technical skill.
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Handle my notice → Ask a CA on WhatsAppYes, where the work is professional in character. Liaison services, coordination of statutory no-objection certificates and related facilitation were held to require specialised technical knowledge and so to amount to 'technical consultancy', a specified profession under s.44AA(1) read with s.44ADA — which made s.44AD unavailable and the 50% rate applicable. This was decided by the ITAT (ITAT Raipur Bench — Shri Partha Sarathi Chaudhury (Judicial Member)) and bears on section 44ADA, section 44AD, section 44AA of the Income Tax Act 1961. It is reported as ITA No. 480/RPR/2026 (unreported). A revenue-side decision, in the library because it is what the department will cite when it recharacterises presumptive business income as professional receipts. The test applied is whether the work calls for specialised skill and knowledge, not the label attached to the receipts in the return, and the list of professions in s.44AA(1) was read widely rather than narrowly. If it applies to you, the first step is this: Describe accurately what the receipts are for before choosing between s.44AD and s.44ADA, because the description in the return will not govern.
The assessee was the proprietor of M/s Geophoenix and offered income of Rs. 6,92,100 under section 44AD, treating his activity as a business. His gross receipts for the year were Rs. 37,80,000. The Assessing Officer took the view that the receipts were for professional or technical services falling within section 44ADA, under which 50% of gross receipts must be offered, and made an addition of Rs. 14,17,500 representing the difference. The CIT(A) upheld the addition. Before the Tribunal the assessee contended that section 44ADA had no application to him because his work was not a 'profession' referred to in section 44AA(1). The matter was decided on 2026-07-02 by the ITAT (ITAT Raipur Bench — Shri Partha Sarathi Chaudhury (Judicial Member)). On those facts the ITAT held as follows. The addition was upheld. The assessee's work — liaison services, coordination of statutory no-objection certificates and related facilitation — required specialised technical knowledge and therefore amounted to 'technical consultancy', a specified profession under section 44AA(1) read with section 44ADA. Section 44AD was not available to him.
The Tribunal read sections 44AA and 44ADA together and held that the list of professions in section 44AA(1) is to be given a wide, not a narrow, construction. 'Technical consultancy' is one of the callings expressly named there, and what determines whether an activity falls within it is whether the work calls for specialised skill and knowledge rather than the label the assessee attaches to his receipts. Obtaining statutory no-objection certificates and performing liaison and facilitation work of the kind the assessee undertook cannot be done by a person without the relevant technical training. The character of the receipts, not the description in the return, governs the choice between section 44AD and section 44ADA. Since the receipts were professional receipts, the presumptive rate of 50% applied and the difference between that and the 8% offered was rightly added. In the words reproduced by the source cited on this page: "These works cannot be done by a layman and it requires specific technical skill."
It was decided by the ITAT on 2026-07-02 and is reported as ITA No. 480/RPR/2026 (unreported). Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 44ADA, section 44AD, section 44AA, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The addition was upheld. The assessee's work — liaison services, coordination of statutory no-objection certificates and related facilitation — required specialised technical knowledge and therefore amounted to 'technical consultancy', a specified profession under section 44AA(1) read with section 44ADA. Section 44AD was not available to him. It arises in Presumptive Taxation & Audit matters, on section 44ADA, section 44AD, section 44AA of the Income Tax Act 1961, and was decided by ITAT Raipur Bench — Shri Partha Sarathi Chaudhury (Judicial Member). Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where the work is execution rather than consultancy, document the nature of the services — contracts, scope of work, deliverables — before the assessment stage. Model the exposure at 50% of gross receipts before opting for s.44AD in a borderline case.
Validity check could not be completed. The order could not be found in a subscription case-law database: searches on the proprietorship and on the party name return nothing for it, the only hit on the name being an unrelated forfeiture matter. There is no reporter citation to search on, the order being unreported, so no citator check is possible there; the order is weeks old and no later treatment exists to find. The particulars in this entry rest on a single published report. The provision question is now answered from the statute rather than from commentary. Section 58 of the Income-tax Act, 2025, as amended by the Finance Act, 2026, is the successor to sections 44AA, 44AB, 44AD, 44ADA and 44AE of the 1961 Act. Serial number 3 of its table charges 50 per cent of gross receipts for a specified profession as referred to in section 62(4), where gross receipts do not exceed fifty lakh rupees, or seventy-five lakh rupees where cash receipts do not exceed 5 per cent. Section 62(4)(a) lists the specified professions as legal, medical, engineering, architectural, accountancy, technical consultancy, interior decoration, information technology or company secretary. So the phrase 'technical consultancy' on which this order turns is carried into the 2025 Act, and an assessee within it is excluded from the business presumptive scheme, the definition of 'eligible assessee' in section 58(11)(a)(iii) excluding a person carrying on a specified profession. That finding was checked against a published source, which is linked on this page, on 2026-08-25. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Only one report of this order could be found, and the order could not be found in a subscription research database either: searches there on the proprietorship and on the party name return nothing for it, the single hit on the name being an unrelated forfeiture matter. There is no reporter citation to search on, the order being unreported. So the citation is unconfirmed against the order and no citator check is possible there; that absence is neutral for a Raipur single-member order of July 2026, and it is certainly not support for it. It follows that the sentence quoted in this entry has not been checked against the text of the order - it comes from the single report - so do not present it as the Tribunal's own words until the order is obtained. The single report also lists s.194J among the provisions in issue, which the section list here does not carry; with the order itself unavailable there is no way to tell whether the Tribunal dealt with s.194J or whether the report has imported it from elsewhere, so it has not been added, and a reader who needs to know whether the recharacterisation carried a withholding consequence will have to obtain the order. The assessment year is likewise still not stated on any available source, so the turnover-threshold limb of the holding cannot be assessed. One thing is now settled from the statute rather than from commentary: 'technical consultancy' survives into the new Act, being named in the list of specified professions in s.62(4)(a) of the Income-tax Act, 2025, to which the 50 per cent presumptive charge in s.58 refers, and a person carrying on a specified profession is excluded from the business presumptive scheme by the definition of 'eligible assessee'. Check the position before conceding a recharacterisation on the strength of this order. Only one report of this order could be fetched; a targeted search for 'Neeraj Dewangan' / 'ITA No. 480/RPR/2026' returned no second source. The assessment year is not stated on the fetched page. The corroborating URLs verify the statutory framework (s.44ADA and its link to s.44AA(1)) but not the facts of this case. The incometaxindia.gov.in section 44ADA page as served does not reproduce the provisos, so the list of professions in s.44AA(1) could not be quoted verbatim from a primary source. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The addition was upheld. The assessee's work — liaison services, coordination of statutory no-objection certificates and related facilitation — required specialised technical knowledge and therefore amounted to 'technical consultancy', a specified profession under section 44AA(1) read with section 44ADA. Section 44AD was not available to him.
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