9911796707
TMI Blog2009 (8) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit and loss account is sufficient ground to issue notice under section 148 – order of ITAT upheld X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The department carried that order on further appeal to the Tribunal. The assessee filed cross objections against the finding that the reopening of assessment is correct. The Tribunal allowed the appeal filed by the department by observing that it is incumbent on the assessee to explain by way of proper reconciliation and documentary evidence the reason for the discrepancy and remitted the matter to the file of the assessing officer for proper reconciliation of the difference between income as per TDS certificate and that taken for profit and loss account. The cross objection filed by the assessee has also been dismissed on the premise that the reopening on the basis of the factual error pointed out by the audit party is valid in law. The disclosure by the assessee must not only be true but should also be fully explained. In respect of the assessment years 1999-2000 to 2002-03, the Tribunal held that there was only processing under section 143(1) of the Act and any intimation under the provision cannot be treated as assessment order and for that purpose, the Tribunal relied on the decision of the apex Court in ACIT v. Rajesh Jhaveri Stock Brokers P. Ltd., (2007) 291 ITR 500. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the regular assessment under section 143(3) of the Act for the assessment year 1997-98 was completed on 25.02.2000. Subsequent to the completion of the assessment, it was noticed that the operational income credited to the profit and loss account is less than the income as per the TDS certificate. 9. It is further contended that the assessing officer observed that the assessee, after deducting the operational expenses from the gross receipt is taking the net figure to profit and loss account. By netting the expenses, the assessee has not furnished the actual picture of transaction carried out by the company and thereby the true state of financial affairs of the assessee company have not been reflected properly in the return of the income filed. Hence, there is escapement of income to the extent of variation between the income admitted and the income as per the TDS certificate available on record. From the above observation, it is evident that the materials are available before the assessing officer while he was making the assessment under section 143(3) of the Act in respect of the assessment years 1999-2000 to 2002-03. In that case there cannot be any discrepancy. When there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(1) accepting the returned income Date of notice u/s 143(2) of the Act Date on which reconciliation was sought between income as per P & L a/c & gross receipt as per TDS certificate Recon-ciliation filed on 1996-97 20/9/96 192790 28.01.97 18.02.97 19.03.97 08.09.98 11.09.98 1997-98 30/09/97 282890 27.05.98 03.07.98 25.02.00 -- 1998-99 18.04.98 61290 22.01.99 22.11.99 20.02.01 -- -- 1999-00 06.12.99 58,140 21.08.00 17.07.00 -- -- -- 2000-01 30.11.00 132400 22.06.01 -- -- -- -- 2001-02 31.10.01 127460 18.10.02 -- -- -- -- 2002-03 124500 21.2.03 -- -- -- -- Date of notice u/s 148 Date on which copy of reasons for reopening were sought Date on which only gist of reasons were furnished Date on which objections for reasons were filed Date on which order against the reasons for reopening was passed Date on which detailed objections for reassessment were filed together with clarification on variation between gross receipts as per TDS certificate and income as per P & L account. Date of re-assessment order Addition made on reopening u/s 147 (Rs.) 26.03.03 -- -- -- -- 19.12.03 29.03.04 2122223 29.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... econciliation of the difference between the receipt in TDS Certificate and amount credited in Profit and Loss Account and there is no material available on record to consider the matter. Therefore, the Tribunal set aside the order on merits and remitted back the appeal filed by the Revenue and held as follows: "We have heard both the counsels and perused the relevant records. We find that it is not disputed in this case that gross receipt as per TDS certificate did include some expenditure reimbursement. In such circumstances, it is incumbent upon the assessee to explain and prove by way of proper reconciliation and documentary evidence the reason for the discrepancy. The reliance upon Hon'ble Apex Court decision referred above will be taken into account only after factual details are established. Mere theoretical explanation of the nature of the case will not suffice. Hence, it is the duty of the assessee to make a proper reconciliation of the amount of difference between the receipt as per TDS certificate and that as per Profit & Loss Account. Hence, in the interest of justice, we remit this issue to the file of the Assessing Officer to give an opportunity to the assesee to subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21 ITR 538 had held that the disclosure by the assessee for avoiding re-assessment must not only be true but it should also be fully explained. Fact that Income Tax officer could have investigated the truth of the assertion does not relieve the assessee of his obligation. Considering the present case on the prism of aforesaid, we find that no explanation as to reconciliation of the difference between the receipt in TDS certificate and amount credited in Profit & Loss Account had been provided by the assessee, Hence, the contention of the assessee that all materials were already disclosed is not tenable in the background of this precedent. Again, we find that in assessment years 1999-2000 to 2002-2003 there was only processing under Section 143(1) and as held by the Hon'ble Apex Court in the case of ACIT Vs. Rahjesh Jhaveri Stock Brokers P. Ltd (2007) 291 ITR 500 (SC), such intimation cannot be treated as assessment order and re-assessment was held to be valid in such cases and hence the argument of change of opinion would not apply. As regards the issue of lack of communication of information regarding reasons recorded for re-opening, we find that the assessee in the appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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