Tribunal emphasizes Assessing Officer's duty to verify entries independently in undisclosed receipt case

The Tribunal found that the Assessing Officer failed to adequately investigate a disputed entry regarding an undisclosed receipt based on a TDS discrepancy. It emphasized the officer's duty to verify the genuineness of entries independently and not shift the burden to the assessee. The Tribunal directed a fresh examination of the matter, instructing the officer to locate the company and its directors for verification. It set aside previous orders and remitted the issue for reevaluation, stressing the importance of ensuring a just outcome based on accurate information and legal provisions. The appeal was allowed for statistical purposes.

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Issues:
Assessment of undisclosed receipt based on TDS discrepancy.

Analysis:
The appeal pertains to the assessment year 2011-12 where the assessee, engaged in laying cables, received a sum from a company, which the company claimed to have paid a higher amount in the TDS return compared to what the assessee received. The assessee contended that the discrepancy was due to a wrong entry by the company and that the amount was not actually received, hence should not be considered as income. On the other hand, the Revenue argued that since the company did not rectify the TDS return despite communication attempts, the amount shown in Form 26AS should be considered correct. The Assessing Officer treated the difference as an undisclosed receipt by the assessee.

The Tribunal observed that under the Income-tax Act, the assessee is expected to pay tax after assessment completion, with provisions for advance tax payment and TDS. It emphasized that if the assessee disputes a credit entry, the Assessing Officer must verify its genuineness, especially when the other party is a registered taxpayer. The Tribunal noted that the burden of proof initially lies with the assessee, but the Assessing Officer must also independently verify disputed entries. It highlighted that the Assessing Officer's role is crucial in determining the authenticity of transactions and cannot shift the burden to the assessee based on the other party's unavailability.

Consequently, the Tribunal held that the Assessing Officer failed to adequately investigate the disputed entry and directed a fresh examination of the matter. It instructed the Assessing Officer to locate the company and its directors to ascertain the veracity of the credit entry and make a decision in accordance with the law. The Tribunal emphasized that the Assessing Officer must fulfill his duty to ensure a just outcome and set aside the previous orders, remitting the issue back to the Assessing Officer for reevaluation.

In conclusion, the Tribunal allowed the appeal for statistical purposes, emphasizing the Assessing Officer's responsibility to thoroughly investigate disputed entries and make decisions based on accurate information and legal provisions.

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