2013 (9) TMI 756 - HC - Income Tax

Determination of liability / expenses in the absence of books of accounts - ITAT had remanded back the order - Books of accounts were destroyed due to flood and could not be produced Held that - Books of account were destroyed, the same cannot be produced before the Assessing Officer - Assessee is at liberty to submit supporting documents to verify his claim like another copy of audit report after obtaining from his C.A. etc - Directed the AO to make the assessment denovo by ignoring the direction issued by the Tribunal. As the matter is too old, so, the Assessing Officer is expected to complete the assessment within a period of three months soon after the receipt of a certified copy passed by this Court along with the record.

Summary

Issues involved: Appeal under Section 260A of the Income-Tax Act, 1961 against the judgment and order dated 30.05.2012, passed by the Income Tax Appellate Tribunal, Allahabad for the assessment year 1994-95.

Analysis:

1. Background and Assessment Process:
The appellant, a civil contractor operating as a partnership firm, filed an appeal against the order of the Income Tax Appellate Tribunal, Allahabad for the assessment year 1994-95. The appellant's books of account were audited, but due to severe floods in District Gorakhpur, the records were destroyed. Consequently, the Assessing Officer completed the assessment based on an income higher than the return income, leading to the appellant's appeal.

2. Appeal Proceedings and Tribunal Directions:
The CIT(A) provided partial relief, but the Tribunal remanded the matter back to the Assessing Officer for further verification. The Tribunal directed that if the appellant could provide original books of account, audit reports, and confirmations from creditors, no addition would be made. However, if the appellant failed to produce these documents, the addition would be sustained. The appellant moved miscellaneous applications claiming a mistake in the Tribunal's direction, which were dismissed.

3. Court's Observations and Decision:
The High Court observed that the Tribunal's order was not appealable as it was a recall order, not a modification or rectification. Considering the circumstances, where the books of account were destroyed, the Court upheld the Tribunal's decision to restore the matter to the Assessing Officer. However, the Court directed the Assessing Officer to conduct a fresh assessment disregarding the Tribunal's directions due to the unavailability of the destroyed records. The Court instructed the Assessing Officer to complete the assessment within three months and granted the appellant the right to appeal before the first appellate authority if necessary.

4. Conclusion:
The Court disposed of the appeal at the admission stage, modifying the Tribunal's order and providing directions for a fresh assessment. The decision aimed to address the challenges faced by the appellant due to the loss of records while ensuring a fair assessment process within a specified timeframe.

This detailed analysis covers the key aspects of the legal judgment, including the background, appeal proceedings, court's observations, and the final decision rendered by the High Court.