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TMI Blog2011 (9) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... the view that the deletion of the same by CIT(A) is on a right footing. Addition on account of the difference between the Balance Sheet filed along with the return and the Balance Sheet found in the course of the search - return filed late in reponse to notice issued u/s 153A - Held that:- Return filed late by the assessee in response to the notice u/s 153C read with section 153A is an invalid return and the same cannot be rescued to be treated as a valid return, this comparison itself would fail. Accepting that the return filed can be considered as information, still as the investments shown in the Balance Sheet seized being higher, no addition on this count can be made because there is no Balance Sheet which is filed and which can be considered for making the addition. All the additions made on the basis of the comparison with such invalid return stand deleted - Decided against the Revenue. - IT Appeal Nos. 717 to 719 (Mds.) of 2008 & others - - - Dated:- 21-9-2011 - Dr. O.K. Narayanan, George Mathan, JJ. N. Devanathan and B.S. Purshotham for the Appellant. Shaji P. Jacob for the Respondent. ORDER George Mathan, Judicial Member ITA No. 891/Mds/2008 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed issues, all the ten appeals and the four cross objections are disposed of by this common order. 2. Shri Shaji P. Jacob, learned Sr. DR represented on behalf of the Revenue and Shri N. Devanathan, Advocate along with Shri B.S. Purshotham, CA represented on behalf of the assessee. 3. The cross objections filed by the assessee are taken up for disposal first as they contained legal issues in regard to the assumption of jurisdiction under section 153C of the Income-tax Act, 1961 ('the Act' for short). However, in the course of arguments it was specifically alleged by the learned DR that the cross objections filed by the assessee were barred by limitation of 346 days and the assessee has not filed any reason for the delay in filing the cross objections. The learned authorised representative replied that he had filed the affidavit praying for condonation of delay along with the cross objections. The records of the Tribunal were verified and it was noticed that no affidavit or application for condonation of the delay has been filed. Consequently, the four cross objections filed by the assessee are dismissed in limine . 4. It was further submitted by the learned authorised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pages 11 to 17 of the Revenue's paper books. The order sheet notings are identical. However, for the sake of better appreciation the same for assessment year 2000-01 is extracted herein below : "Action u/s 153C of the Income Tax Act : In the course of the search u/s. 132 of the Income Tax Act on 12/08/2004 in the case of Sri T.R. Pachamuthu (SRM Group) and allied concerns/persons, the following information has been received in respect of Sri P. Sathyanarayana S/o Sri T.R. Pachamuthu. Relevant materials have also been seized and the same is received on transfer from the Investigation Wing. Information 1. Sri P. Sathyanarayana is the Director of SRM Systems Software (P) Ltd. 2. As per seized materials Ann/SKM/B D/S-10 (Page 40) which refers to his Balance Sheet as at 31/03/2000, there are Unsecured loans to the extent of Rs. 47,54,340/- which remains unexplained till date. 3. He has made gifts amounting to Rs. 15,00,000/- in AY 2001-02. The source remains unexplained. 4. In addition to the above, he has made substantial investments in SRM Systems Software (P) Ltd., SRM Radiant Software (P) Ltd., SRM Hotels (P) Ltd. and other SRM concerns. But the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther submission that a reading of the order sheet recording of the Assessing Officer in the assessee's case clearly showed that there was no recording of satisfaction either in the case of Shri T.R. Pachamuthu or in the case of the assessee. It was the submission that the order sheet noting was clearly points noted for the sake of ready reference. It was the submission that as the reasons had not been recorded, in view of the decision in the case of Manish Maheshwari ( supra ), the notice issue u/s. 153C read with section 153A of the Act was liable to be treated as bad in law and the consequential assessment annulled. 7. We have considered the rival submissions. A perusal of the decisions quoted by the learned DR in the case of Covanta Samalpatti Opting Operating (P.) Ltd., ( supra ) as also in the case of Malladi Project Management P. Ltd., ( supra ), clearly shows that in those cases the Hon'ble jurisdictional High Court was deciding on the questions of law. It was because there was no finding of the Tribunal the Hon'ble High Court refused to entertain a question of law on the issue. Here, it should be understood that the facts themselves being not available a substant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the invalidity of the notice under section 153C read with section 153A of the Act. The decision of the co-ordinate Bench of this Tribunal in the case of P. Ravi would have no bearing to this decision insofar as the decision of the Hon'ble Supreme Court in the case of Manish Maheshwari ( supra ) as also the recording of the satisfaction was not the issue therein before the Tribunal nor discussed in this regard. Here we may also hasten to clarify that the assessments for the assessment years 2000-01, 2003-04 and 2004-05 only are annulled as this legal issue which has been raised in the cross objections for the assessment years 1999-2000, 2001-02, 2002-03 and 2005-06 have been dismissed insofar as the cross objection itself has been dismissed on account of limitation. Consequently, the appeals of the assessee in ITA Nos. 717, 718 and 719/Mds/2008 stand allowed. As we have annulled the assessments for the assessment years 2000-01, 2003-04 and 2004-05, the Revenue's appeals in ITA Nos. 892, 895 and 896/Mds/2008 become infructuous and consequently the same are dismissed. 9. In regard to the Revenue's appeals in ITA Nos. 891, 893, 894 and 897/Mds/2008 for the assessment years 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative vehemently supported the order of the learned CIT(A). It was the submission that the issue of agricultural income was only for the assessment years 2000-01, 2003-04 and 2004-05. 12. We have considered the rival submissions. A perusal of the order of the co-ordinate Bench of this Tribunal in the case of Smt. P. Easwari ( supra ), clearly shows that this issue of inadequacy of drawings had been considered and it has been held that the drawings of all the family members must be considered. It is also noticed that it has been accepted that the assessee is staying in a joint family. Once it is accepted that the assessee is staying with the joint family, obviously the drawings of all the family members would have to be considered and as it is noticed that the drawings of all family members put together are more than the estimate made by the Assessing Officer, we are of the view that the deletion of the same by the learned CIT(A) is on a right footing and does not call for any interference. 13. In regard to the issue of the addition representing agricultural income, it is noticed that the same relates to the assessment years 2000-01, 2003-04 and 2004-05. It is also notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Balance Sheets found in the course of search were prepared by taking into account the market value of the investments of the assessee during the relevant period. It was further submitted that the Balance Sheets filed along with the Returns showed the investments at their cost price which was the figure liable to be considered for the purpose of assessment. It was submitted that the assessee having filed his return it was the return which was filed along with the Balance Sheet which was liable to be considered. It was the submission that the co-ordinate Bench of this Tribunal in the case of Smt. P. Easwari ( supra ), in para 34 of the order has held that once the revised return is filed it effaces the original return. On a specific query from the Bench in regard to the Balance Sheet for the assessment year 2000-01 which did not show the asset being the investment in Janaki Nagar property being the land and building, it was fairly replied by the learned authorised representative that it was a mistake insofar as the investment had not been shown in the Balance Sheet filed along with the return. It was the submission that only the Balance Sheet filed along with the return w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The provisions of section 139(4) would not come to the rescue of an assessee insofar as the time limit is fixed on the basis of the end of the relevant assessment year. The assessment year cannot be tinkered with. Consequently, there is no provision for the filing of a belated return. We must also keep in mind that the provisions of section 153A are absent in section 139. Even sec. 139(9) which provides for rectification of any defect cannot come to the rescue of an assessee insofar as a return which is not filed in the time specified by the Assessing Officer in the notice u/s 153A is not a defect. It makes the return invalid. Obviously, the information available in the return would very much be available to the Assessing Officer for use in the assessment. But in the present case the Assessing Officer has compared the Balance Sheet found in the course of search with the Balance Sheet filed along with the belated return and the differential has been brought to tax by the Assessing Officer. As we have already held that the return filed by the assessee in response to the notice u/s 153C read with section 153A of the Act is an invalid return and the same cannot be rescued to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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