2015 (2) TMI 62 - AT - Income Tax

Non-est return of income - CIT(A) treated assessment framed on its basis u/s. 144 as ab-initio void - annulling the assessment order by CIT(A) - A.O. did not accept the appellant's contention that the appellant HUF never existed and that the ROI was never filed by it - Held that - We find that CIT(A) after considering the submissions made by the Assessee has noted and given a finding that Assessee had never applied for PAN, the return of income was not verified and the return being not filed by the Assessee stand established and the return of income filed has to be treated as a scrap of paper filed by anonymous person reflecting fictitious income, assets and liabilities. He has further noted that the copy of statement of Shri Vinod Modi, ITP which was relied by the A.O for making the additions was never furnished to the Assessee nor the Assessee was afforded opportunity to cross-examine Shri Vinod Modi. Before us, Revenue has not brought any material on record to controvert the findings of ld. CIT(A). We therefore find no reason to interfere with the order of ld. CIT(A). - Decided against revenue.

Summary

Issues involved:
Appeals by Revenue and Assessee against CIT(A)'s order for A.Ys. 2003-04, 2004-05 & 2005-06; Treatment of return of income as non-est; Assessment order under section 143(3); Addition of unexplained cash credit u/s. 68; Disallowance of agricultural income; Validity of return of income; Assessment based on non-existent ROI; Opportunity for cross-examination; Dismissal of Revenue's appeal.

Analysis:

1. Common Submissions and Consolidated Order:
- Both parties agreed to have common submissions for 3 different years' appeals.
- All appeals were consolidated for convenience, starting with A.Y. 2005-06.

2. Assessment and Additions:
- Assessee, an HUF in grains business with agricultural income, filed a return showing total income of Rs. 47,520.
- Assessment under section 143(3) raised total income to Rs. 47,83,540.
- AO added unexplained cash credits under section 68, including capital balance and unsecured loans.
- Disallowance of agricultural income due to lack of justification or proof.

3. Validity of Return of Income:
- CIT(A) found the return peculiar with discrepancies in assets and liabilities.
- Assessee's explanations and evidence questioned the existence of claimed assets.
- CIT(A) concluded the ROI as non-est and the assessment void under section 144.

4. Appeal and Arguments:
- Revenue appealed the CIT(A)'s decision.
- Arguments centered on the non-existence of claimed income and assets by Assessee.
- Lack of opportunity for cross-examination highlighted regarding relied-upon statements.

5. Decision and Dismissal:
- Tribunal upheld CIT(A)'s findings, emphasizing the non-filing and non-verification of the ROI.
- Lack of new evidence from Revenue led to the dismissal of the appeal.
- Similar decisions made for A.Ys. 2003-04 & 2004-05 based on identical circumstances.

6. Conclusion:
- Revenue's appeals dismissed, along with Assessee's C.Os., due to lack of substantiated challenges to CIT(A)'s ruling.
- All appeals were concluded and dismissed in the open court on 30-01-2015.