2019 (7) TMI 1056 - HC - Income Tax

Estimation rate (for the additions with respect to the partially disclosed bank accounts in connection with the non-operative finance) - HELD THAT - Ends of justice would be met if the matters are remitted to the Tribunal for deciding the issue as regards the uniformity of the estimation rates for addition regarding the partially disclosed bank account in connection with the non-operative finance afresh. In view of the aforesaid, the Appeals are allowed in part. The impugned orders passed by the ITAT are hereby quashed and set-aside. The matter is remitted to the ITAT for fresh consideration of the issue as discussed above. We also permit the department to request the Tribunal to take up the Miscellaneous Applications preferred by the Revenue and hear both the sets of appeals together.

Summary

Issues involved:
The judgment involves the issue of additions made by the Assessing Officer in connection with partially disclosed bank accounts in relation to non-operative finance for the Assessment Years 1998-99 to 2002-03.

Analysis:

1. The Tribunal was criticized by the Revenue for remanding the issues to the Assessing Officer due to the non-uniform estimation rate for the additions related to partially disclosed bank accounts. The Revenue argued that this finding was erroneous and contrary to the evidence on record.

2. In the Assessment Year 1998-99, only one partially disclosed bank account was found, resulting in a disallowance. However, for the subsequent years, it was discovered that the assessee had two partially disclosed bank accounts, leading to additional disallowances. The Revenue contended that the Assessing Officer did not adopt a non-uniform rate for these additions.

3. The counsel for the Revenue proposed that the matters be sent back to the Tribunal to reevaluate the issue of uniformity in estimation rates for the additions concerning partially disclosed bank accounts in connection with non-operative finance.

4. Regarding other additions related to undisclosed bank accounts, the CIT(A) had deleted the additions made by the Assessing Officer, which were later dismissed by the Tribunal due to low tax effect. However, the department filed Miscellaneous Applications seeking revival of the appeals based on CBDT's Circular. The department requested the Tribunal to hear both sets of appeals together.

5. After hearing arguments from both sides, the Court decided to remit the matters to the Tribunal to reconsider the issue of uniform estimation rates for additions concerning partially disclosed bank accounts. The Appeals were allowed in part, the impugned orders were quashed, and the matters were sent back to the Tribunal for fresh consideration.

6. The Court also permitted the department to request the Tribunal to hear the Miscellaneous Applications alongside the appeals filed by both the assessee and the department regarding issues of non-operative finances. Finally, all Tax Appeals were disposed of accordingly.