2023 (7) TMI 737 - AT - Income Tax

Reopening of assessment u/s 147 - assessee has not filed his return of income and gross receipts of the assessee were very high - HELD THAT - Because the assessee has not filed his return of income and because the gross receipts of the assessee were very high, the AO assumed jurisdiction u/s 148 of the Act and initiated reassessment proceedings. There is no error or infirmity in this action of the AO. This ground taken is dismissed. GP estimation - When the bench pointed out that let the AO verify and examine the reconciliation, the assessee reluctantly once again showed his inability and insisted the bench to decide the quarrel here itself. Considering the history of the assessee, we are left with no choice but to accept the gross receipts shown in Form No. 26AS as true and correct as on such receipts, payers have deducted tax at source and the assessee has claimed the same as prepaid taxes. Applying the profit rate of 8%, profit to be calculated. AO is directed to frame assessment at these incomes and allow the claim of deduction under Chapter VIA, details of which shall be provided by the assessee. AO is also directed to give credit of TDS as per Form 26AS.

Summary

Issues involved:
The judgment involves the following Issues:
1. Reopening of assessment for multiple Assessment Years.
2. Determination of income based on gross receipts and profit rate.

Reopening of assessment for AYs 2009-10 and 2010-11:
The Assessing Officer initiated reassessment proceedings based on the assessee's failure to file returns and high gross receipts. The Tribunal upheld the jurisdiction of the Assessing Officer under section 148 of the Act, dismissing the assessee's contention. The bench accepted the gross receipts as per Form 26AS, applying a profit rate of 8% to determine the income. The Assessing Officer was directed to frame assessments at the calculated incomes and allow deductions under Chapter VIA, along with crediting TDS as per Form 26AS.

Reopening of assessment for AY 2011-12:
Similarly, for AY 2011-12, the Assessing Officer reopened the assessment based on the total receipts reflected in Form 26AS. The Tribunal found the reopening justified, considering the information provided and the gross receipts. The income was determined at 8% of the gross receipts as per Form 26AS, with directions to allow deductions under Chapter VIA and credit prepaid taxes.

Assessment for AY 2013-14:
For AY 2013-14, the gross receipts as per Form 26AS were considered, and a net profit rate of 8% was applied to calculate the income. The Assessing Officer was directed to assess the gross receipts accordingly, add any other income, allow deductions under Chapter VIA, and credit prepaid taxes as per Form 26AS.

Conclusion:
In conclusion, all four appeals by the assessee were partly allowed, with the Tribunal directing the Assessing Officer to assess the incomes based on the gross receipts and profit rates determined for each respective Assessment Year.