2013 (8) TMI 560 - AT - Income Tax

Tribunal upholds assessment order, dismisses appeal, confirms additions.

The Tribunal dismissed the assessee's appeal in full, upholding the assessment order under Section 143(3) and confirming additions based on documents ... Best judgement assessment - Failure to furnish statement - Applicability of Sub-clause (a) of section 144(1) - Survey under section 133A of the Income Tax Act - Assessee has been avoiding the service of notice & non-cooperating in completing the assessment – Held that:- Assessee had tried to find one excuse or the other for not complying with the notices/show cause notice/explanation sought by the authorities of Income Tax - This is the case of Survey, where the documents found from the possession of the assessee were only identified by putting marks on the said documents and copies of the same were taken by the survey team and original were available with the assessee. Despite show cause notices issued to him, there was no compliance and originals of the said identified documents/books were not produced before the Assessing Officer in the original and set aside proceedings. The plea of the assessee that the alleged documents were never confronted to him and/or photo copies of the same not provided are baseless, as the identified documents and the alleged parallel books of account found during survey were at variance with the books of account, on the basis of which return of income was filed and which were always available with him - This is case of survey and not search and seizure operation where documents and books of account found are impounded. There is no recourse to impounding of documents/books during the survey. Despite the same, the Assessing Officer gave notice to the assessee time and again to collect the photocopies of the said documents, were not complied with by the assessee, though he claims to have received the said notices belatedly. Such defaulters cannot take shelter under the provisions of non-allowance of opportunity or non-confrontation of the alleged documents – Ground was dismissed – Decided against the Assessee. Completion of assessment under section 143(3) or section 144 of the Act – Held that:- Provisions of section 144(1)(a) of the Act are not applicable to the instant case - Sub-clause (a) of section 144(1) of the Act which are to be applied where the assessee had failed to furnish any return of income. In the facts of the present case the assessee had furnished return of income on 1.3.1993 declaring loss of Rs.15,700/-, which was processed on 29.2.1993. Thereafter survey under section 133 of the Act was conducted at the business premises of the assessee on 3.2.1992 and four documents marked as B-1 to B-4 were found and identified and the copies of the documents were taken by the survey team - Clauses (b) and (c) of section 144(1) of the Act are applicable where the assessee fails to comply with all the terms of notice issued under sections 142(1), 142(2A) or 143(2) of the Act - in the facts of the present case, first after filing the return of income, survey was conducted at the business premises of the assessee and survey investigation was carried out and comparison was made to the regular books of account maintained by the assessee and thereafter original assessment was made - No merit in the plea of the assessee that the assessment made under section 143(3) of the Act in the present set of facts is invalid – Decided against the Assessee. Separate addition for each figure of alleged uchanti loose paper and books – Held that:- Assessee failed to put forward any contention in support of the merits of the case - Addition of Rs.53,32,425/- has been made in the hands of the assessee on account of various entries in the parallel set of accounts and documents marked as D-1 to D-4 found during the course of survey. The assessee has failed to controvert the findings of the Assessing Officer in this regard and has even failed to bring on record any evidence explaining or justifying its stand as to why the said addition should not be made in the hands of the assessee, except the plea of peak investment in support of which no calculation has been filed - The assessee has failed to discharge the onus cast upon him - No merits in the issue raised by the assessee of calculation of peak investment/credit based on the loose papers/books - In the absence of any explanation by the assessee justifying the nature of entries in the said documents found during the course of survey, no merits in the alternate ground of appeal raised by the assessee. Issues Involved:1. Jurisdiction of the Assessing Officer.2. Assessment under Section 143(3) vs. Section 144.3. Non-supply of documents/papers to the assessee.4. Additions based on documents found during the survey.5. Charging of interest under Section 234A and 234B.Detailed Analysis:1. Jurisdiction of the Assessing Officer:The assessee challenged the jurisdiction of the Assessing Officer (AO) in passing the order. However, this issue was not pressed by the assessee during the appeal as it had already been decided by the Hon'ble Supreme Court in the assessee's own case. Consequently, this ground was dismissed.2. Assessment under Section 143(3) vs. Section 144:The assessee contended that the assessment should have been completed under Section 144 (best judgment assessment) instead of Section 143(3). The Tribunal noted that the AO had issued multiple notices under Section 143(2) and 142(1), which the assessee failed to comply with. The AO completed the assessment under Section 143(3) after considering the evidence available. The Tribunal upheld this approach, stating that the assessment under Section 143(3) was valid and in conformity with the intent and purpose of the Act. The provisions of Section 292B were invoked to validate the assessment despite the procedural contention raised by the assessee.3. Non-supply of documents/papers to the assessee:The assessee argued that the AO failed to supply copies of the documents/papers on which the assessment was based. The Tribunal found this claim to be ill-founded. It was noted that the documents were found during a survey, and copies were taken by the survey team while the originals remained with the assessee. The AO had repeatedly asked the assessee to collect the photocopies, but the assessee did not comply. The Tribunal dismissed this ground, emphasizing the non-cooperative attitude of the assessee.4. Additions based on documents found during the survey:The AO made additions totaling Rs. 53,32,425/- based on entries in a parallel set of accounts and documents found during the survey. The assessee failed to provide any explanation or evidence to counter these findings. The Tribunal upheld the additions, noting that the assessee had not discharged the onus of explaining the nature of the entries. The plea for calculating peak investment/credit was also dismissed due to lack of supporting calculations or evidence from the assessee.5. Charging of interest under Section 234A and 234B:The assessee contested the charging of interest under Sections 234A and 234B. The Tribunal noted that these were consequential in nature and dismissed the ground.Conclusion:The appeal of the assessee was dismissed in its entirety. The Tribunal upheld the assessment order passed under Section 143(3) and confirmed the additions made by the AO based on the documents found during the survey. The issues of jurisdiction, non-supply of documents, and the method of assessment were all decided against the assessee. The charging of interest under Sections 234A and 234B was deemed consequential and upheld.