2025 (8) TMI 27 - AT - Income Tax

ITAT allows partial relief on commission receipt addition under Sections 147, 144B, and 148, remands for further verification

Prashant Singh Versus ITO, Ward-1 (3), Jaipur

ITAT Jaipur partially allowed the appeal regarding addition of commission receipt in a reassessment under sections 147 read with 144B and 148. The ... Addition on account of commission receipt - fresh reassessment order u/s 147 r.w.s. 144B has been passed in respect of the same assessment year - in this case an another notice u/s 148 was issued to the assessee wherein the returned income was accepted by the AO. assessee submitted the fresh form no. 26AS wherein the income in name of Future Maker Life Care Private Limited shows plus (+) and thereby minus (-) for an amount HELD THAT:- Notice u/s 143(2) and 142(1) has been issued to the assessee on 26-09-2022 alongwith questionnaire. In response to these notices, the assessee filed written reply alongwith the documents received on 18-10-2022 through eproceedings. The reply as well as the documents filed by the assessee has been gone through carefully vis-à-vis the information on the basis of which the notice u/s 148 has been issued to the assessee and income returned by the assessee is accepted. Atleast for the plus and minus entry of the similar amount there is a force in the argument of the ld. AR of the assessee and therefore, that amount is directed to be deleted. But there is no discussion in the report of the ld. AO or that of the submission of the assessee on the other entries reflected in the form no. 26AS. Therefore, we set aside the matter for verifying that the fact that remaining entries income is considered by the assessee or not while filling the ITR. Based on that verification ld. AO shall charge the correct income in the hands of the assessee. Appeal of the assessee is partly allowed. ISSUES: Whether reopening of assessment under section 147 read with section 144B of the Income Tax Act, 1961 is valid in the absence of disclosure of commission income by the assessee.Whether the addition of commission income of Rs. 16,33,400/- is justified when the assessee failed to file return or comply with notices issued under sections 148 and 142.Whether a subsequent reassessment order under the same provisions for the same assessment year renders the earlier assessment order null and void (non est).Whether the assessee discharged the statutory onus to prove that the commission income was offered to tax and properly disclosed.Whether the principle of natural justice was violated by not providing reasonable opportunity to the assessee during the appellate proceedings.Whether the entries in Form 26AS matching the commission income received from the company justify deletion of the addition made by the Assessing Officer. RULINGS / HOLDINGS: The reopening of assessment under section 147 r.w.s. 144B was valid as the assessee did not disclose commission income of Rs. 16,33,400/- and failed to comply with notices issued under sections 148 and 142, justifying reassessment.The addition of Rs. 16,33,400/- on account of undisclosed commission income was upheld because the assessee exhibited 'callous indifference' by not filing return or submitting explanations despite multiple opportunities, resulting in an ex parte best judgment assessment under section 144.The subsequent reassessment order dated 06/03/2023 accepting the returned income does not render the earlier assessment order dated 17/09/2021 null and void as both orders are based on different information and independent proceedings; hence, the contention that the earlier order is 'rendered non est' is not accepted.The assessee failed to discharge the statutory onus to prove that the commission income was offered to tax, as no specific details, workings, or evidences were furnished despite repeated opportunities, leading to dismissal of the appeal against the addition.The claim of violation of natural justice due to lack of reasonable opportunity was rejected as multiple opportunities were afforded to the assessee during assessment and appellate proceedings.The portion of commission income corresponding to the plus and minus entries of Rs. 11,49,360/- in Form 26AS was directed to be deleted as it indicates withdrawal of income by the payee, but the remaining entries require verification to determine if they were disclosed in the return; accordingly, the matter was remanded for verification and correct charging of income. RATIONALE: The Court applied the provisions of the Income Tax Act, 1961, specifically sections 143(1), 147, 148, 142, and 144B, governing reopening of assessments, filing of returns, and best judgment assessments.The principle that reopening under section 147 requires credible information about escaped income was upheld, and non-compliance with statutory notices justified reassessment and addition of undisclosed income.Precedent and statutory interpretation confirm that multiple assessments under section 147 for the same assessment year can coexist if based on different information; thus, a subsequent order does not automatically invalidate a prior order.The statutory onus on the assessee to prove that income has been offered to tax was emphasized, with failure to produce evidence or submissions leading to adverse inference and upholding of addition.The Court noted that multiple opportunities were provided to the assessee, negating claims of denial of natural justice.The unique aspect involved examination of Form 26AS entries showing both positive and negative amounts for commission income, leading to partial deletion of addition and remand for further verification, reflecting a nuanced approach to evidence and income disclosure.