2017 (8) TMI 272 - AT - Income Tax

Tribunal emphasizes evidence verification and proper adjudication in income and penalty appeals

ITO, Ward 36 (1), New Delhi Versus Harsh Sidana

The tribunal directed the Assessing Officer to verify all details and ascertain the correct income, emphasizing the need for proper documentation and ... Acceptance of Income as reflected in form 26-AS (TDS statement) - assessee submitted that, it is merely a detail of TDS credit in the account of the assessee and any wrong information fed in the TDS return could distort the data. - Held that:- It is observed that assessee had filed a lot of details before the authorities which deserves to be verified in detail. However neither Ld. CIT(A) had called for remand report, nor did Ld. AO conduct any enquiry to verify the correct income of assessee. Under such circumstances it is difficult to accept the income as reflected in form 26 A-S. We are therefore inclined to set aside the issue back to the files of Ld. AO to verify all the details and to ascertain the right income of the assessee. It cannot be ignored that mistakes could creep into form 26 A-S, which needs to be corrected in the event of proper documentation and proof being submitted by the assessees. We accordingly direct Ld. AO to give ample opportunity to assessee to file all necessary relevant documents to establish his claim and Ld. AO may take necessary steps as per law. Appeal filed by the assessee stands allowed for statistical purposes. Issues:1. Quantum appeal against addition to returned income.2. Quantum appeal against delay in filing appeal.3. Quantum appeal against addition without proper verification.4. Quantum appeal regarding Form 26AS and additional evidence.5. Penalty appeal against penalty imposed under section 271(1)(c).6. Penalty appeal against dismissal of grounds without opportunity.7. Penalty appeal against simultaneous judgment with quantum appeal.8. Penalty appeal challenging legality of orders.9. Quantum appeal and penalty appeal interplay.Quantum Appeal - Addition to Returned Income:The appellant challenged the assessment order for adding a specific amount to the returned income without proper adjudication or opportunity. The CIT(A) upheld the addition without considering the appellant's submissions judicially. The appellant argued that the Form 26AS is not conclusive, and the assessment should align with the accounting method. The tribunal directed the AO to verify all details and ascertain the correct income, emphasizing the need for proper documentation and proof.Quantum Appeal - Delay and Additional Evidence:The appellant contested the delay in filing the appeal and the CIT(A)'s refusal to condone it. Additionally, the appellant raised concerns about the CIT(A) not admitting additional evidence under Rule 46A. The tribunal noted the contradictions in the CIT(A)'s order and emphasized the importance of giving the appellant an opportunity to present evidence.Penalty Appeal - Penalty Imposed under Section 271(1)(c):The penalty appeal challenged the legality of the penalty imposed under section 271(1)(c) without proper opportunity for the appellant. The CIT(A) upheld the penalty without hearing the appellant separately from the quantum appeal. As the quantum appeal was set aside for verification, the penalty appeal was deemed infructuous by the tribunal.Interplay Between Quantum and Penalty Appeals:The tribunal highlighted the interplay between the quantum and penalty appeals, noting that the penalty appeal became infructuous due to the quantum appeal being set aside for verification. The tribunal dismissed the penalty appeal accordingly. The judgment emphasized the need for proper verification and opportunity for the appellant in both quantum and penalty proceedings.This detailed analysis covers the issues raised in the quantum and penalty appeals, addressing the challenges faced by the appellant regarding additions to income, delay in filing appeals, the significance of Form 26AS, and the interplay between quantum and penalty proceedings.