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TMI Blog2022 (12) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... legal grounds and the additional grounds raised by the appellant are rejected being illogical and such situation amounts to putting the cart before the horse - no interference is required on this issue. Additions of the opening balance of capital and loans and advances appearing on the assets side of the balance sheet - The overall impression conveyed by the details is that the appellant is having taxable income but deliberately not filed the returns of income. He has confirmed the fact of non-filing the returns of income during the appellant proceedings but reasons were not made known except stating that the appellant did not understand the gravity of non-filing the return of income as he was illiterate and not aware of the consequences of non-filing. This plea of the appellant may look reasonable before conducting survey U/s. 133A of the Act. The same plea holds no water subsequent to survey operation due to the fact that the appellant appeared before lower authorities, filed details with the aid and service of professional, deposed statements and he was made aware of the consequences. Hence, the plea of ignorance is rejected and the conduct is contumacious to the authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o substantiate the investments and the additions. CIT(A) has also observed that the assessee was subject to tax audit u/s. 44AB of the Act for some years however has not produced any tax audit report before the Ld. Revenue Authorities. CIT(A) has therefore concluded that since the assessee neither substantiated nor explained the case with cogent evidences, it is deemed concealment of income and hence penalty order needs to be confirmed. Even before us, the assessee as not represented his case substantiating the reasons for non-filing of return of income. We therefore are inclined to uphold the order of the Ld. CIT(A) considering the facts and circumstances of the case and we hereby dismiss the grounds raised by the assessee. Appeals filed by the assessee are dismissed. - I.T.A. Nos. 579 to 585/Viz/2018 I.T.A. Nos. 586 to 592/Viz/2018 - - - Dated:- 30-11-2022 - SHRI DUVVURU RL REDDY , HON BLE JUDICIAL MEMBER And SHRI S BALAKRISHNAN , HON BLE ACCOUNTANT MEMBER Appellant by : None Respondent by : Sri MN Murthy Naik , CIT - DR ORDER PER BENCH : These appeals (I.T.A. Nos.579 to 585/Viz/2018) are filed by the assessee for the AYs 2006-07 to 2012-13 aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee raised various additional grounds of appeal before the Ld. CIT(A). The Ld.CIT(A) admitted the additional grounds as it was connected to the root of the matter. The Ld. CIT(A) sought remand report from the Ld. AO on the additional grounds raised by the assessee. The Ld. AO submitted his remand report covering all the issues. Subsequently, this remand report was forwarded to the assessee for a rejoinder. The assessee submitted its rejoinder to the Ld. CIT(A). The assessee also raised various legal grounds in his rejoinder to the remand report. Considering the submissions made by the assessee, the Ld. CIT(A) rejected the legal grounds raised by the assessee and partially allowed the appeal for the assessment years 2006-07 and 2007-08 while dismissing the appeals for the AY 2008-09 to 2012-13. Aggrieved by the order of the Ld. CIT(A), the assessee carried the matter before the Tribunal. 4. The assessee has raised 17 grounds before the Tribunal. However, from the file notings we find that the assessee has not pressed the Grounds No. 1, 2, 3, 4, 5, 6, 7, 8, 10, 12 17. The remaining grounds are extracted herein below for adjudication. 9. (i) Ld. CIT(A) failed to notice tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons stated that the assessee raised these grounds stating that the satisfaction as required U/s. 153C of the Act was not recorded by the Ld. AO. There is no representation and no counter arguments are placed by the assessee before us. The Ld DR supported the order of Revenue authorities. We find from records that similar ground was also raised before the Ld. CIT(A). The Ld. CIT(A) while adjudicating the grounds observed that in the remand report the Ld. AO has categorically mentioned the reasons for issue of notice U/s. 153C of the Act on being satisfying that the incriminating material found and seized at the time of search and seizure operations U/s. 132 of the Act are relating to survey operations conducted u/s. 133A of the Act in the group cases related to the assessee and hence notice U/s. 153C is to be issued to the assessee requiring him to furnish the return of income for the AYs 2006-07 to 2011-12. The Ld. CIT(A) in his findings in para 8.2(b) has considered the similar ground raised before him and is decided as follows: 8.2(b) I have carefully considered the plea of the Ld. Authorized Representative on the issue of satisfaction recorded by the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence rejected. In view of the above facts and circumstances, the legal ground raised by the appellant is rejected. The proceedings U/s. 153C initiated by AO is held as valid. 6. Since there is no representation by the assessee before us, based on the material available on record, we are of the considered view that the Ld. CIT(A) has rightly examined the facts in the present case and has rejected the legal ground raised by the assessee and therefore we found no infirmity in the order of the Ld. CIT(A) and hence no interference is required in the order of the Ld. CIT(A) on this issue. 7. With respect to Ground No.13 relating to commencement of six preceding assessment years, the assessee in his submissions stated before the Ld. CIT(A), the Ld. AO assumed jurisdiction u/s. 153C of Act not from the date of search but from the date on which the impounded material was received by the Ld. AO on 23/07/2013 and hence six years preceding shall be from 2007-08 only. The Ld DR supported the order of Revenue authorities. Before us, since there is no representation, based on the material available on record, we find that the Ld. CIT(A) has rightly examined the legal issue raised by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the gravity of non-filing the return of income as he was illiterate and not aware of the consequences of non-filing. This plea of the appellant may look reasonable before conducting survey U/s. 133A of the Act. The same plea holds no water subsequent to survey operation due to the fact that the appellant appeared before lower authorities, filed details with the aid and service of professional, deposed statements and he was made aware of the consequences. Hence, the plea of ignorance is rejected and the conduct is contumacious to the authority. 10. We are of the considered view that the Ld. CIT(A) has rightly considered the submissions of the assessee and adjudicated the issue and in the absence of any representation by the assessee before us, based on the material on record, we find no infirmity in the order of the Ld. CIT(A) and hence no interference is required on this ground. 11. Ground No.15 relating to restricting the agricultural income, we find from the order of the Ld. CIT(A) that the assessee has disclosed an agricultural income of Rs. 1.50 lakhs in the capital account filed before the Ld. AO. Therefore, the Ld. Revenue Authorities has considered the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 2. Notice u/s. 271(1)(c) did not specify whether it is for concealment of income or furnishing of inaccurate particulars of income. The Learned CIT(A) has failed to apply the ratio of the Judgement of the Andhra Pradesh High Court of Hyderabad dated 13 July 2017 in the case of Principal. CIT, Visakhapatnam vs. Baisetty Revathi in the matter of validity of proceedings u/s. 271(1)(c). (398 ITR 88). According to the judgment notice u/s. 271(1)(c) without specifying whether it is for concealment or it is for furnishing inaccurate particulars, is invalidation law. (Tax Effect - Rs. 18,47,175/-). 3. The assessment has been completed only on the basis of data furnished by the assessee without any further particulars, the Learned CIT(A) ought to have held that there was no mens rea on the part of the assessee. The formality of not filing a return, in the circumstances, should not have been held against the assessee by the Learned CIT(A). There is no concealment in substance. (Tax Effect - Rs. 18,47,175/-) 4. In the appellate order against the assessment order, Learned CIT(A) has failed to follow the Supreme Court judgment in the case of CIT vs. Sinhgad Technical Educati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not sufficient if the scized material in the course of search of any person provide information related to transactions with the other person/s but it must belong to the other person/s for its application. As the assessment proceedings are not valid in law, the penalty proceedings also are not valid in law. (Tax Effect - Rs. 18,47,175/-) 6. In the appellate order against the assessment order, Learned CIT(A) failed to notice that satisfaction as stated by the AO is on the basis of documents impounded / seized during search and surveys of several connected persons in business and not on the basis of material seized during search as belonging to assessee. Initiation of proceedings u/s 153C is therefore invalid. The penalty proceedings u/s. 271(1)(c) also are not valid in law. (Tax Effect - Rs. 18,47,175/-) 7. Penalty proceedings u/s 271(1)(c) also are not valid in law because initiation of proceedings u/s 153C and assessment order are invalid in law. This is because the assessment year 2006-07 is not a preceding assessment year. It falls beyond the period of 6 preceding assament years because under the first provisa to Sec. 153C the date of initiation of the searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of the assessee. The Ld. Departmental Representative argued that the assessee is a regular non-filer of the return of income which tantamounts to concealment of income, even though the return of income was filed after the issue of notice U/s. 153C of the Act. Therefore, the penalty levied by the Ld. Revenue Authorities be sustained. 19. We have heard the Ld. DR and perused the materials available on record and the orders of the Ld. Revenue Authorities. In the absence of any representation by the assessee before us, we proceed to adjudicate the grounds raised by the assessee based on the material available on record. 20. Admitted facts as seen from the record, we find that the assessee is a non-filer even though he had taxable income for the relevant assessment years. The assessee also failed to file the returns of income inspite of several notices and show cause notices issued. The Ld. AO also considering the details available from the seized material passed the assessment order u/s. 144 r.w.s 153C of the Act. The Ld. CIT(A) has also confirmed the additions in the quantum appeal. It is seen from the order of the Ld. CIT(A) the assessee has pleaded ignorance as he is an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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