TaxTMI 
TaxTMI 
2014 (2) TMI 1131
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....ears subsequent to the search. In response to the notice, the assessee filed return of income before the AO. The AO, thereafter, issued notice u/s. 143(2) and 142(1) of the I.T. Act along with questionnaire for submission of details. The assessee submitted before the AO that books of account and other details were destroyed in the flood in the year 2005 and, therefore, the same could not be produced. Since the assessee failed to produce the books of accounts, the AO passed the order u/s. 144 r.w.s. 153A of the I.T. Act. The AO estimated the net profit of the assessee's proprietary concern, M/s. J. P. Exports @ 0.99% on the basis of net profit ratio of certain other persons who were engaged in a similar business as that of the assessee and thus made the additions accordingly to the total income of the assessee. The AO further disallowed the deductions under Chapter VI claimed by the assessee and also declined to give credit of tax paid for want of proof. 3. The CIT(A) upheld the action of the AO for passing the order u/s. 144 r.w.s 153A of the Income Tax Act. However he directed the AO to re-compute the net profit of the assessee by adopting the net profit of 0.14% and deleted th....
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.... parties have relied upon various case laws which we will also discuss along with the relevant points of arguments. 8. The learned DR has also filed written submissions. To stress his point that the return processed u/s. 143(1) cannot be said to be an assessment but a mere intimation, he has relied upon the judgment of Hon'ble Supreme Court in the case of "Rajesh Jhaveri Stock Brokers P. Ltd." (2007) 291 ITR 500 (SC). His contention has been that in the case in hand the assessment was not done originally u/s. 143(3) hence the estimation in question has been rightly made u/s. 153A of the Act by the AO. He has further contended that the principal laid down by the Special Bench of the Tribunal in the case of "All Cargo Global Logistics Ltd." 137 ITD 287 can be applied to the case where the original assessment was completed u/s. 143(3) of the Act and not to the case where the return was processed u/s. 143(1) of the Act. 9. We have considered the submissions of the learned DR. So far so the reliance placed by him in the case of "Rajesh Jhaveri Stock Brokers P. Ltd." (supra) is concerned, we may observe that the issue before the Hon'ble Supreme Court in that case was regarding the ....
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....n u/s. 143(1) the same can be assessed u/s. 143(3) by issue of notice u/s. 143(2) subject to its issuance within the limitation period of 12 months from the end of the month in which return is furnished as per the proviso to clause (ii) of section 143(2) [as was existing at the time of relevant assessment year]. Once the limitation period as prescribed vide proviso to clause (ii) of sub section (2) of section 143 is expired, it is not open to the AO to assess the income u/s. 143(3) of the Act and the return filed by the assessee u/s. 139 is deemed to be accepted, which however, can be re-opened u/s. 147 of the Act subject to the fulfillment of ingredients of section 147 and within the time period as prescribed u/s. 149 of the Act, as discussed in the preceding para. So under such circumstances if the return is processed u/s. 143(1) and not u/s. 143(3) and after the prescribed period of limitation, the same cannot be assessed u/s. 143(3) though it may be interpreted as mere intimation assessment or otherwise, but the same shall be deemed to be accepted by the AO and it will not have any different colour other than the return which is processed u/s. 143(3) of the Act. The only distin....
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....ng assessment) and 263( revision of orders) of the Act. The Hon'ble High Court has further observed that the words "assess" or "re-assess" have been used at more than one place in the section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of abated proceedings and 'reassess' has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only on the basis of the incriminating material found during the course of search or requisition of documents. The Hon'ble High Court while reproducing the proposition of law laid down by the Hon'ble Supreme Court in the case of "K P Varghese v. ITO" (1981) 24 CTR 358 "that it is recognized rule of construction that a statutory proviso must be so construed, if possible, that absurdity and mischief may be avoided" has observed that if the argument of the counsel for the assessee was to be accepted, it would mean that even in case where....
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....ame was distinguishable on the facts. In the case of "Gopal Lal Badruka Vs. DCIT" (Supra), incriminating evidence was found in relation to eight plots of land but no evidence was found in respect of 24 plots. Since incriminating material was found in respect of eight plots, Hon'ble Court held that the AO can estimate the income in respect of all 32 plots. The fact was that incriminating material was found in that case. The other judgment of the Hon'ble Delhi High Court in the case of "CIT vs. Chetan Dass Lachman Dass" [2012] 211 Taxmann 61, strongly relied upon by the learned DR, is also of no help to the revenue but to the assessee only. In the said case the Hon'ble Delhi High Court, in para 11 of the order, though has held that there is no condition in section153A that additions should be strictly made on the basis of evidence found during the course of search or other post search material or information available with the AO which can be related to the evidence found and that the seized material can be relied upon to also draw inference that there can be similar transactions throughout the relevant period, yet, at the same time it has been further observed that this however, doe....