https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=770320 https://www.taxtmi.com/caselaws?id=770320 Validity of the assessment done u/s 143(3) - assessment based on revised return - additional receipts shown in the revised return as income from other sources due to lack of verifiable documentary evidence and non-reflection in Form 26AS and bank accounts - HELD THAT:- The order u/s 143(1) is not considered to be an assessment, within the meaning of section 139(5), that would prevent an assessee from filing a revised return, after the return of income originally filed, being processed u/s 143(1). It may not be out of place to mention that the provisions of section 143(1) had been revised w.e.f. 1.04.2008 and now the revised section 143(1) refers to the, 'processing' of the return and does not use the word assessment at all. Thus, it is quite clear that the processing of the return u/s 143(1) is not the assessment as envisaged in section 139(5) and therefore, the plea of the assessee that its return is invalid and non-est and could not be the subject of a valid assessment order, much less a valid appeal order, is found to be without any basis and is accordingly rejected. The additional ground i.e. ground no. 5 is accordingly dismissed. Undisclosed receipts - AO was not able to find out any evidence whatsoever of the assessee indulging in any transactions over and above the transactions that had been declared by it in its return of income. AO has recorded that the assessee has neither shown these so called, 'receipts' in any of its bank accounts, nor has it described the mode of receipts. The assessee has also not submitted any details, that would enable the ld. AO to verify that it had actually indulged in construction of residential houses and supply of materials, that resulted an excess turnover without any corresponding change in its return of income. It is true in the first instance, the assessee did not point out the issue of its filing of a false return before the ld. AO, but subsequently during remand proceedings, it has furnished the details of the proceedings before the Vigilance authorities of NTPC, Vindhyachal and Rihandnagar that prompted it to file its return in the manner that it has. Thus, the assessee has effectively retracted upon the return that it has filed, and in such circumstances, it is for the ld. AO to prove that the retraction was unwarranted. This, the ld. AO has not been able to prove. On the contrary, the assessee has brought sufficient material on record in the form of inquiry letters and reports of the NTPC, to demonstrate that the return that was filed by it may not represent its true state of affairs, but was a return filed to meet certain qualification criteria in the NTPC tender. Now that the assessee has confessed before the ld. CIT(A)and before us that it had, in fact, filed a false return for this specific purpose, it is our view that the ld. AO should consider the said report of the NTPC, Vigilance authorities and the findings of the tender committee of the NTPC, before proceeding to hold that the turnover reflected in the second balance-sheet that was filed before the income tax authorities along with the return dated 1.08.2015, represented the true receipts of the assessee or that the balance figure of Rs. 7,08,32,552/- represented undisclosed income of the assessee. The ld. AO should also consider whether this enhanced turnover is in any way reflected in the hands of the assessee which would justify it being treated as the assessee's undisclosed income. Thus, matter be restored to the file of the ld. AO for a fresh assessment, after considering these aspects, so that the true income of the assessee may be determined and the Department may take appropriate action for the determination of the true income of the assessee and consequent action if it finds that the assessee has acted in violation of section 277 of the Act. Appeal of the assessee is partly allowed the appeal of the Department is held to be allowed for statistical purposes. Case-Laws Income Tax Tue, 31 Dec 2024 00:00:00 +0530