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

ITAT Jaipur partially allowed the appeal regarding addition of commission receipt in a reassessment under sections 147 read with 144B and 148. The tribunal accepted the assessee's explanation and documents concerning the plus and minus entries of similar amounts in Form 26AS, directing deletion of the addition related to those entries. However, as other entries in Form 26AS were not addressed by the AO or the assessee, the matter was remanded for verification whether these remaining entries were reflected in the return. The AO was directed to assess income correctly based on this verification.

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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.

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