Appeal granted for incorrect income assessment in wrong year, emphasizing statutory provisions over voluntary declarations.

The Tribunal allowed the appeal, ruling that the income erroneously offered in AY 2013-14 could not be assessed in that year. The decision emphasized that income must be assessed in the correct assessment year, and voluntary declarations cannot override statutory provisions. The Tribunal cited precedent to support its conclusion that income voluntarily offered but not legally assessable should not be taxed in that year, affirming that income from previous years cannot be assessed in a subsequent year.

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Issues Involved:
1. Non-consideration of return of income filed in response to notice under Section 148 of the Income-tax Act, 1961.
2. Rejection of the plea not to assess income, which was wrongly offered in the return of income.

Issue-wise Detailed Analysis:

1. Non-consideration of Return of Income Filed in Response to Notice under Section 148 of the Income-tax Act, 1961:

The assessee, engaged in the real estate business, faced survey operations under Section 133A of the Income-tax Act on 30.7.2013. Following the survey, the assessee voluntarily declared an amount of Rs. 4,14,42,864/- as income for the assessment years 2008-09 to 2013-14. The assessee filed a return of income on 02.10.2013 for AY 2013-14, declaring a total income of Rs. 2,60,41,500/-. The AO reopened the assessments for the years 2008-09 to 2013-14 by issuing notices under Section 148 of the Act. However, since the assessment for AY 2013-14 was pending, the AO withdrew the notice for that year. The assessee filed a return in response to the notice under Section 148, excluding the amount of Rs. 2,60,38,898/-. The AO did not consider this return due to the withdrawal of the notice and completed the assessment based on the original return.

2. Rejection of the Plea Not to Assess Income, Which Was Wrongly Offered in the Return of Income:

The assessee argued that the additional income of Rs. 2,60,38,898/- offered in AY 2013-14 was erroneously included, as these were advances received from customers in earlier years, shown as sundry creditors. The AO assessed sundry creditors as unexplained credits under Section 68 of the Act for AY 2008-09, but the first appellate authority deleted a significant portion of this addition. The assessee contended that these credits were genuine and should not be assessed again in AY 2013-14. The AO and the first appellate authority did not accept this plea, maintaining that the assessee voluntarily declared the income.

Judgment Analysis:

The Tribunal noted that the sundry creditors amounting to Rs. 2,60,38,898/- offered in AY 2013-14 were received in earlier years and could not be assessed as income in AY 2013-14. The Tribunal referenced the decision in the case of R. Natarajan vs. ACIT, where it was held that income voluntarily offered but not legally assessable in a particular year should not be taxed in that year. The Tribunal emphasized that there is no estoppel against the statute, and income pertaining to one year cannot be assessed in another year. The Tribunal concluded that the income of Rs. 2,60,38,898/- erroneously offered by the assessee in AY 2013-14 could not be assessed in that year, even if it was voluntarily offered.

Conclusion:

The appeal of the assessee was allowed, and it was held that the income of Rs. 2,60,38,898/- erroneously offered in AY 2013-14 could not be assessed in that year. The Tribunal's decision underscored the principle that income must be assessed in the correct assessment year, and voluntary declarations cannot override statutory provisions. The order was pronounced in the open court on 11th Jan, 2021.

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