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1994 (12) TMI 103 - AT - Income TaxAdvance Tax, Amnesty Scheme, Assessing Officer, Interest Payable By Assessee, Late Filing, Revised Return
Issues Involved:
1. Justification of the revised return under the Amnesty Scheme. 2. Validity of the addition of Rs. 79,118 by the AO. 3. Principles of natural justice and procedural fairness. 4. Charging of interest under sections 139(8) and 215. 5. Applicability of the Amnesty Scheme to the case. Issue-wise Detailed Analysis: 1. Justification of the Revised Return under the Amnesty Scheme: The assessee filed a revised return under the Amnesty Scheme, surrendering an amount of Rs. 80,730. The CIT(A) held that this revised return was not covered under the Amnesty Scheme. The assessee argued that the revised return was filed before the finalization of the assessment and met the conditions laid down in the Board's Circular No. 451 dated 17-12-1986. The Tribunal noted that the purpose of the Amnesty Scheme was to encourage assessees to disclose their undisclosed income voluntarily and in good faith. The Tribunal concluded that the assessee's revised return should be considered under the Amnesty Scheme, as it was filed before the finalization of the assessment and was accompanied by the payment of due taxes. 2. Validity of the Addition of Rs. 79,118 by the AO: The AO added Rs. 79,118 as income from undisclosed sources, related to unexplained expenditure incurred during the marriage of the assessee's daughter. The assessee contended that the addition was illegal and unwarranted, as it was based on documents and statements that were not provided for cross-examination. The Tribunal observed that the assessee was not given an opportunity to cross-examine the Accounts Assistant of the Taj Hotel, whose statement was relied upon by the AO. The Tribunal emphasized that procedural fairness and the principles of natural justice were flouted, making the addition of Rs. 79,118 questionable. 3. Principles of Natural Justice and Procedural Fairness: The assessee argued that the AO did not supply copies of documents and statements relied upon and did not make the person making the statement available for cross-examination. The Tribunal agreed that the assessee was denied the opportunity to cross-examine the Accounts Assistant of the Taj Hotel, which violated the principles of natural justice. The Tribunal noted that the detection of concealment should involve a process of patient enquiry and rebuttal, which was not followed in this case. 4. Charging of Interest under Sections 139(8) and 215: The AO charged interest under sections 139(8) and 215, holding that the case was not covered under the Amnesty Scheme. The Tribunal referred to various circulars issued under the Amnesty Scheme, which aimed to encourage voluntary disclosure of income. The Tribunal concluded that the assessee should not be denied the benefits of the Amnesty Scheme, including the non-charging of interest under sections 139(8) and 215, as the revised return was filed voluntarily and in good faith before the finalization of the assessment. 5. Applicability of the Amnesty Scheme to the Case: The Tribunal emphasized that the Amnesty Scheme was intended to encourage assessees to come forward with their undisclosed income. The Tribunal referred to the Board's Circulars, which clarified that the benefit of the Amnesty Scheme should be available to assessees who disclosed their income voluntarily before the detection of concealment. The Tribunal interpreted the term 'detection' as a process requiring patient enquiry and concluded that the department had only a prima facie belief of concealment, not a complete detection. Therefore, the assessee's case was covered under the Amnesty Scheme. Conclusion: The Tribunal allowed the appeal to the extent that the interest charged under sections 139(8) and 215 was directed to be deleted. The Tribunal held that the revised return filed by the assessee was covered under the Amnesty Scheme, and the procedural fairness was not adhered to by the AO, making the addition of Rs. 79,118 questionable. The appeal was allowed to the extent indicated, providing relief to the assessee.
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