Whether, National e-Assessment Centre New Delhi is also not properly equipped and trained? Or just work is being shown by UN-necessary re-collection of documents and information.

[DEV KUMAR KOTHARI]

Ease of doing assessment By AO:

For ease of doing assessment and disposal of appeals authorities must have access online of all related documents available for assessee and others having dealing with assessee.  In my earlier article I had discussed about Regional E-Assessment Unit (ReAC Unit).

It appears that even the National e-Assessment Centre, New Delhi  is also not prepared and is burdening assessee with long requisitions asking for documents and information which are already with the department. This is causing lot of wastage of valuable  time of tax authority and assessee both.

Long requisitions and list of documents for submission:

In one of case the matter was referred to me for drafting of appeal against assessment order passed by National e-Assessment Centre, New Delhi.

From the proceedings it appears that without looking into at documents available with department including documents filed electronically like E-ITR, TDs returns, prescribed forms etc.   Ld. AO asked for many documents, explanations etc. which were totally avoidable.

This has caused lot of harassment of assessee and wastage of time of tax authorities also.

The matter relates to a Society running a school duly registered u/s 12A and 80G long ago an with renewals from time to time.

Requisitions issued by Ld. AO shows complete lack of trust and faith in assessee. It appears that requisitions are issued with a pre-set mind and prejudice in all respect.

Ld.  AO  must have some good faith and belief and must not doubt about everything and every aspect of assessee. Ld.AO should not act as an investigation agency doubting every aspect. Particularly so when the assessee is a very old established institution , duly registered and filing various documents prescribed under law from time to time.

Herein below, excerpts from  some of notices and requisitions issued by Ld. AO are mentioned with some  observations of author:

From notice u/s 143.2

Scrutiny (Computer Aided Scrutiny Selection)

return of Income has been selected for scrutiny and such issues initially are as under:

Accumulation of Income by Trust

4. In course of assessment proceedings, if required, specific questionnaire(s) or requisition(s) for information/document may be issued subsequently.

Observations of author:

In a computer added selection, author believe that main area that required enquiry are picked by system as important. Other aspects which are usual and for which comparable figures of earlier years are available are not important for enquiry.

However, it appears that the subsequently Ld. AO has wanted to make enquiry about each and every item of Income and Expenditure and balance Sheet and transactions for the whole year in a thorough manner.

From notice and observations marked in italic and bold / underlined

First notice us 142.1

ANNEXURE 1.

1.Please furnish copy of deed of trust and amended deed if any. – already on record.

 2. Please furnish copy of approval under section 12A or 80G of I.T.Act . – already on record.

 3. Please furnish a note on activities undertaken by the trust during the period relevant to the assessment year 2018-19 – already on record.

4. Please furnish copy of total income for the year along with audit report, Income and expenditure account and Receipts and payments account for the financial years 2017-18 and 2016-17 – already on record.

5. Please furnish details of all sources of income of the society .Please furnish details and nature of donations/contributions ie corpus, voluntary contributions received by the trust during the year along with the names of persons from whom received. Furnish copies of receipts of corpus donations if any received by the trust.

 – already on record in prescribed and broad manner.

 6. Please furnish copy of registration under FCRA and copy of annual return filed before MHA in respect of foreign donations received by the trust.

– information already on record.

7. Please furnish bank statements of all the bank accounts held by the trust during the relevant period. – summary of transactions is  already on record what purpose bank statemetns will serve is not known?

8. Please furnish details of application of income claimed in the Income and expenditure account explaining how the same are charitable in nature  evidences in support of such expenditure like ledgers ,registers etc may please be furnished.

If summarised and prescribed  statements are not  considered and understood   days are not far away when  assessee may be asked  to furnish entire books of account and supporting documents.

 9. Please furnish copies of rental agreements in respect of rents claimed by the society. (There was no claim on consideration of account of HO the school ) .

 10. Please furnish the details of payments of salaries, rent or any other income to the trustees and justify the genuineness and reasonableness of the same.

      – information was  already on record in prescribed manner.

 11. Please furnish details of accumulation of income and justify the continuous accumulation of income under section 11(2) of I.T.Act, by the trust over the last five years.             – information was  already on record in prescribed manner, there is no justification in Ld. AO asking justification of accumulation in view of facts and information already on record and past records.

 12. Please furnish the evidence of furnishing Form 10 for the year under consideration on 05.09.2018 as claimed by you in your submission dt. 04.10.2019

                  Why not to check own records first?

Observations:

Most of  above are not directly related with the initial purpose for which selection was made by  CASS.  

Many of documents and details were already on record in form of e-records and returns. Ignoring the same Ld. AO asked assessee to furnish them. Some items are not relevant, and in any case reply to them are already found in E-ITR and E-forms submitted in due course.

Second notice us 142.1  dt. 27.01.21

ANNEXURE

 In continuation of this office notices it is further requested to furnish the following.

1.  Please furnish the details of tuition fees received of Rs.       /- with strength of students class wise, fee structure class wise. Please furnish break up and details of other fees of Rs.          /- received.
2. Please furnish details of rent paid along with copy of rental agreements. Please furnish whether TDS is made and if so furnish details.

 (There was no rent payment in totality of HO and school)

                  Describing amount as huge is without application of mind the amount was miniscule in view of size of operations.

 

3. Please furnish details of academic improvement fund, Development fund and admission fee fund collected during this year with a brief note and explain why these are directly taken to balance sheet for accumulation without routing through Profit and Loss account. Furnish receipts of the same for verification.

details were already on record, the receipts are capital receipts and are accounted for as such as per correct method and past practice. The enquiry is made just to find some technical defects, if any and to make addition.

 5. Please furnish details of caution money received and explain the purpose of collecting the same.

 6. Please furnish the details of advances given by the society.

7.  Please re submit the statement of computation of total income and explain how the figures are arrived.

8. Please furnish detailed reasons for setting apart huge income of Rs.    by the trust and justify continuous accumulation of income.

    It is requested to kindly note that this is time barring assessment and to treat the matter as urgent. You may also note that no further time can be granted and in case of non compliance, the assessment will be completed as per the information available on record in accordance with the provisions of Income tax Act.

Observations of author:

As can be seen ld. AO has made enquiry about many items and asked for documents, including admittedly with a request to re-submit,

Audited accounts and Tax audit report and TDS returns, past records , figures for earlier years in annual accounts etc,  were ignored.

Some amounts are described as huge, whereas in view of size of organisations these are very small.

After making so much enquiry assessment has been made with a prejudiced mind and huge addition has been made.

This will force assessee to indulge into litigation to save from huge demand raised.

Is it a way to show to show ot of work done:

As in case of physical hearings, Ld. AO used to aske assessee furnish all docuemtns agains and again without making his office effecient, it appears that even in case of e-proceedins un-necessary work is being done or being shown as done by piling of documents againt and again ignoring records already available.

Discussions to this article

[DR.MARIAPPAN GOVINDARAJAN]

This is the procedure is followed in all tax matters which complicated the entire legal proceedings and endless litigations are there.