1988 (2) TMI 120 - AT - Income Tax

Summary

Issues Involved:
1. Cancellation of ex parte assessment by the Commissioner of Income-tax (Appeals).
2. Treatment of offerings by pilgrims.
3. Justification of the addition sustained by the Commissioner of Income-tax (Appeals).
4. Compliance with notices and summons issued by the Income-tax Officer.
5. Ownership of the temple and assets.
6. Consideration of the audit report by the Income-tax Officer.
7. Request for remand of the case to the Income-tax Officer.

Detailed Analysis:

1. Cancellation of ex parte assessment by the Commissioner of Income-tax (Appeals):
The appellant argued that the Commissioner of Income-tax (Appeals) should have canceled the ex parte assessment due to the specific facts and circumstances of the case. However, the Tribunal noted that the appellant had failed to comply with multiple notices and summons issued by the Income-tax Officer, thereby justifying the ex parte assessment under section 144 of the Income-tax Act, 1961.

2. Treatment of offerings by pilgrims:
The appellant contended that the offerings by pilgrims were not for his benefit but were meant for feeding pilgrims and distributing sarees and gold Mangalsutras. The Tribunal found that the appellant did not provide satisfactory evidence to support this claim. The High Court had directed that strict accounts be maintained, which the appellant failed to do, leading to an adverse inference against him.

3. Justification of the addition sustained by the Commissioner of Income-tax (Appeals):
The Commissioner of Income-tax (Appeals) reduced the net income estimated by the Income-tax Officer from Rs. 1,60,000 to Rs. 1,00,000, providing a relief of Rs. 60,000. The Tribunal upheld this decision, finding no infirmity in the approach adopted by the lower authorities. The Tribunal noted that the appellant had not produced proper evidence of maintaining accounts as per the High Court's directions.

4. Compliance with notices and summons issued by the Income-tax Officer:
The Tribunal observed that the appellant consistently refused to accept notices and summons issued by the Income-tax Officer. This non-cooperation justified the Income-tax Officer's decision to proceed with the best judgment assessment under section 144 of the Act. The Tribunal emphasized that the appellant's failure to participate in the assessment proceedings indicated a lack of compliance with legal requirements.

5. Ownership of the temple and assets:
The appellant claimed ownership of the temple and its assets, but the Tribunal refrained from adjudicating this issue as it was still sub judice before another forum. The Tribunal noted that the appellant's contention before the High Court was that the temple was not a public temple, which influenced the treatment of the hundi collections.

6. Consideration of the audit report by the Income-tax Officer:
The appellant argued that he had sent an audit report to the Income-tax Officer, which was not considered. The Tribunal found that the audit report was received by the Income-tax Officer after the assessment was completed. The Tribunal also noted that the audit report lacked certification of the correctness of the expenditure claimed by the appellant. Therefore, the Tribunal concluded that the audit report did not improve the appellant's case.

7. Request for remand of the case to the Income-tax Officer:
The appellant requested a remand of the case to the Income-tax Officer for consideration of the audit report. The Tribunal rejected this request, stating that remanding back of cases is not a judicial ritual and should only be done in certain situations. The Tribunal found no material evidence that warranted a remand, especially given the appellant's persistent absence during the assessment proceedings.

Conclusion:
In conclusion, the Tribunal dismissed the appeal, upholding the decisions of the lower authorities. The Tribunal found that the appellant failed to comply with legal requirements, did not provide satisfactory evidence to support his claims, and did not justify a remand of the case. The net income of the appellant was rightly reduced to Rs. 1,00,000 by the Commissioner of Income-tax (Appeals).