9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (4) TMI 59 - AT - Income TaxReopening of assessment u/s 147 - proceedings are pending u/s 143 - Revised return is pending before ld AO - HELD THAT - Provision of section 143 (2) does not make any distinction between return of income filed u/s 139(1) or U/s 139 (5) of the act. If the return filed u/s 139 5 is a valid return then the notice u/s 143(2) of the act can be issued to the assessee within expiry of six months from the end of the Financial Year in which revised return of income is filed. In this case, Revised return is filed on 12/2/2013, so 143 (2) notice could have been issued to the assessee on or before 30/9/2013. Therefore, the assessment proceedings were pending before ld AO. AO issued notice u/s 148 of the act on 15/04/2013, i.e. when the original assessment proceedings were pending as time limit for issue of notice u/s 143 (2) did not expire. Section 142(1) and Section 148 of the Act cannot operate simultaneously. There is no discretion vested with the Assessing Officer to utilize any one of them. The two provisions govern different fields and can be exercised in different circumstances. If income escapes assessment, then the only way to initiate assessment proceedings is to issue notice under Section 148 of the Act. In fact, the proceedings are pending u/s 143 of the act, it looks in appropriate to call for a return under Section 148 of the Act because income cannot be said to have escaped assessment when the assessment proceedings are pending. Same is also the mandate in KLM ROYAL DUTCH AIRLINES 2007 (1) TMI 138 - DELHI HIGH COURT where in it has been held that Where an assessment has not been framed at all, it is not possible to posit that income has escaped assessment. When the revised return is pending before ld AO, Time limit for picking that return for scrutiny is pending u/s 143 (2) of the act, the ld AO could not have multiplied the proceedings and initiated proceedings u/s 148 of the act. Addition u/s 68 - unexplained cash deposits - HELD THAT - Various questions referred to Indo statement the director has clearly referred to the name of Assessee Company stating that it is carrying on business in computer accessories and peripherals. The address of the Godown of the company was also mentioned. The company maintains eight bank accounts as per question number seven out of which one was found to be out of books. The director of the company has also given reference to the turnover of this company and mentioned the names of the suppliers. It was also stated that assessee has not dealt with the above concerns for the last one and half years. On reading of question number 11 it is apparent that the amount of cheques issued to Messer s Atul traders and Vicetex International and Shri Dev Narain Shukla s transactions were asked for by the investigation wing. Assessee submitted their mobile number as well as the addresses. The source of cash deposit was also stated by the assessee. The assessee in fact gave details with respect to four different other suppliers in response to question number 13 and mentioned the major brands dealt with by it. All the four parties mentioned in question number 13 remains unquestioned; the turnover of the assessee other than the undisclosed bank account also remained undisturbed. Furthermore, the learned CIT A has upheld the addition u/s 68 of the act itself on the peak balance in the bank account of the assessee - no infirmity in the order of the learned and CIT A.
Issues Involved:
1. Legality of the deletion of addition under Section 68 of the Income Tax Act, 1961. 2. Justification of the deletion of addition on account of cash deposits in the bank account. 3. Admissibility of additional evidence under Rule 46-A of the Income Tax Rules, 1962. Issue-wise Detailed Analysis: 1. Legality of the Deletion of Addition under Section 68 of the Income Tax Act, 1961: The primary contention was whether the Commissioner of Income Tax (Appeals) [CIT(A)] was justified in deleting the addition of ?59,303,873 under Section 68 of the Income Tax Act, 1961. The Assessing Officer (AO) argued that the assessee failed to discharge its initial onus to prove the genuineness of the source of cash deposits in the bank account. The CIT(A) found merit in the assessee's submission that the AO was not justified in making the addition of the entire cash deposits, noting that the deposits were made in small amounts over a period of time and from various locations. The CIT(A) concluded that the AO should have considered the subsequent cheque payments from the same bank account and that income tax is a tax on real income, not on turnover. 2. Justification of the Deletion of Addition on Account of Cash Deposits in the Bank Account: The CIT(A) observed that the AO failed to appreciate the additional commission income offered by the assessee in the revised return. The CIT(A) applied the peak theory, determining that the peak amount as on 15/4/2011 was ?6,329,851, and directed the AO to accept the revised return of income for the assessment year 2011-12 and to make a lump-sum addition of ?70 lakhs for the assessment year 2012-13, after considering the transactions as running and composite. The Tribunal upheld this view, noting that the AO did not provide evidence that the cheque payments were received back by the assessee, and that the AO's approach of adding the entire turnover as income was incorrect. 3. Admissibility of Additional Evidence under Rule 46-A of the Income Tax Rules, 1962: The AO contended that the CIT(A) admitted additional evidence without providing an opportunity to the AO to be heard, violating Rule 46-A. However, the Tribunal found that the CIT(A) did not discuss any additional evidence in their order, and the Departmental Representative could not show any specific additional evidence admitted by the CIT(A). Consequently, this ground of appeal was dismissed. Conclusion: The Tribunal concluded that the AO could not have initiated proceedings under Section 148 when the revised return was pending, as income cannot be said to have escaped assessment when assessment proceedings are pending. On the merits, the Tribunal found no infirmity in the CIT(A)'s order, which considered the peak balance in the bank account and the nature of the transactions. The appeal by the AO was dismissed, and the order of the CIT(A) was upheld.
|
