2023 (6) TMI 522 - AT - Income Tax

Assessment u/s 153A - AO treated the cash found and seized from the assessee as undisclosed income of the assessee u/s 69A - Hurried assessment on the very next day of issuing notice as getting barred by limitation - HELD THAT - Assessee filed returns of income for the above assessment year declaring NIL income on the assumption that the income were below tax limit inadvertently, but the assessee rectified the mistake by making revised returns showing factual income of every year and furnished well before the proceedings initiated u/s 143(2) - AO has not considered the revised returns filed by the assessee. Assessee was asked to produce details of PAN, ID and other particulars of his brother which was complied with and accepted by the AO. AO has not recorded any statement from the person(s) whose details were furnished before the AO. AO has stated that the assessee has not furnished the details such as break up details of brokerage commission, name and address of persons from whom received brokerage commission and proof for money received from his mother as called for vide this office notice u/s 142(1) on 27.03.2015. The notice issued under section 142(1) of the Act on 27.03.2015 being Friday and the Assessing Officer hurriedly concluded the assessment on the very next working day on 30.03.2015 for the reason that the assessment was getting barred by limitation, which appears to be legally not correct. Having co-terminus power, atleast the ld. CIT(A) should have called for the details from the assessee before concluding the appellate order, which was not done. We set aside the orders of authorities below and delete the addition made u/s 69A of the Act. Decided in favour of assessee.

Summary

Issues involved: Appeal against order of Commissioner of Income Tax (Appeals) for assessment year 2012-13.

Issue 1: Cash seized under section 132 of the Income Tax Act, 1961.

The assessee was found in possession of cash during surveillance, which was seized by state authorities and requisitioned by the Income Tax Department. Notices under section 153A of the Act were issued for assessment years 2006-07 to 2011-12. The assessee failed to provide satisfactory explanation or evidence for the seized cash. The Assessing Officer treated the seized cash as undisclosed income under section 69A of the Act.

Issue 2: Assessment for the year 2012-13.

The assessee filed a return of income admitting NIL income, later revised to show total income. Despite providing some details, the Assessing Officer rejected the fund flow statement due to lack of credible evidence. The assessee failed to furnish specific details requested by the department. The CIT(A) confirmed the assessment order.

Judgement:

The Tribunal heard the case in the absence of the assessee and reviewed the materials on record. The assessee rectified the mistake of filing NIL income returns by submitting revised returns before proceedings under section 143(2) of the Act. The Assessing Officer did not consider the revised returns and hastily concluded the assessment without proper verification. The Tribunal found discrepancies in the assessment process and set aside the orders of the authorities, deleting the addition made under section 69A of the Act.

The appeal filed by the assessee was allowed, and the addition under section 69A of the Act was deleted. The Tribunal pronounced the order on 9th June 2023 in Chennai.