TaxTMI 
TaxTMI 
2015 (11) TMI 1140
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....ssessee did not respond to intimation sent to him under Section 139 (9) of the Act, this return was lodged. Subsequently, in response to a notice issued under Section 142 (1) of the Act, the Assessee filed his return of income on 19th January 1993 declaring again a total income of Rs. 22,400. This was accompanied by a computation of taxable income and statement of affairs as on 31st March 1992 and an income and expenditure account for the year ended on 31st March 1992. 3. In the assessment order dated 31st March 1994 the Assessing Officer ('AO') noted that in the assessment proceedings, notices were issued on 18th November 1992 and 29th December 1992 to the Assessee under Sections 143 (2) and 142 (1) of the Act. One Mr. Mahender Mahajan, Chartered Accountant (CA) appeared on behalf of the Assessee and filed replies dated 21st January 1993 and 8th February 1993 respectively to the aforementioned notices. Subsequently, notices were issued under Sections 143 (2) and 142 (1) of the Act along with a questionnaire dated 29th December 1993. However, no response was given by the Assessee to the said notices. 4. In response to another notice issued under Section 143 (2) of the Act, on....
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.... course of search on 26th February 1992 the Assessee admitted the fact of the money received in his bank accounts and further that the money belonged to him and that it represented his unaccounted income. 8. The assessment order then proceeded to set out the Assessee's statement recorded on 26th February 1992, during the course of search, as under: "Regarding deposit of Rs. 12.914 crores Q.1: Shri Vinod Kumar Khatri - you are proprietor of M/s. Trinity International Corporation, having current account No. 9958 in Bombay Mercantile Cooperative Bank Ltd., Daryaganj, New Delhi. In the account money worth Rs. 12.89 crores have been received out of which at present you have a balance of Rs. 10,17,340. From the statement of account it is understood that large sums of money have been withdrawn in cash as well as by transfer through DDs. In this respect statement of yours was recorded on 17th February 1992 what do have to say in respect of this money which has come to your bank account. Ans. As already stated in my statement under Section 131 of IT Act, 1961 dated 17th February 1992 I am not in the knowledge about the details of the money received and the purp....
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....ounts totalling to Rs. 13.314 crores thereby claiming immunity from penalty and prosecution proceedings. By a letter dated 27th February 1992 addressed to the Commissioner of Income Tax, New Delhi ['CIT, New Delhi'], the Assessee requested that the seized amount should be adjusted towards his existing liability on account of advance tax on the amount declared by him under Section 132 (4) of the Act. In the said letter he had worked out his advance tax liabilities to the extent of Rs. 7,45,43,028. He had also enclosed the advance tax challan to the said amount. Subsequently, during the proceedings under Section 132 (5) of the Act, the Assessee retracted from his earlier admission of unaccounted income declared under Section 132 (4) made by him on 26th and 27th February 1992. The Assessee now claimed that the said amount of Rs. 12.91 crores, which have been received from Russia through official banking channels represented 100 % advance money for supplying, by way of export, a certain number of nickel and cadmium batteries to a party in the USSR for which TIC had entered into a contract. The AO further noted that the Assessee could not substantiate the above claim and had in fact sur....
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....was dismissed by the CIT (A) on 19th April 2004. Against both the aforementioned orders, the Assessee filed ITA Nos. 764 & 2795/Del/2004 before the ITAT. Appeals before the ITAT 14. The ITAT first took up ITA No. 764/Del/2004 for consideration. Of the five grounds urged in the appeal, the Assessee pressed only the following two: "3. The CIT (A) has erred on facts as well as in law in holding the amount of Rs. 2,91,42,945 as taxable only because the Appellant had shown it in revised return under the pressure of the department. 5. The CIT (A) has erred on facts as well as in law in holding amount of Rs. 40,00,000 received from Shri Radha Krishnan is as unexplained even though the same was against money paid to him from withdrawals from the bank even though there is no increase in funds of the Appellant by this amount." 15. The ITAT dismissed the appeal after holding that the revised return was filed voluntarily by the Assessee on 30th March 1994 on the basis of the surrender of the amount declared by him in the statement recorded under Section 132 (4) of the act during the course of search. The Assessee had been unable to explain the source of this re....
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.... not available in the records, its existence was never denied by the Assessee in the course of assessment proceedings. The ITAT declined to accept the contention of the Assessee that no such statement under Section 132 (4) of the Act was recorded. The ITAT referred to Rule 10 of the Income Tax (Appellate Tribunal) Rules, 1963 ('ITAT Rules') in terms of which an affidavit had to be filed stating clearly and concisely about an alleged fact which cannot be borne out by, or is contrary to, the records. No such affidavit had been filed by the Assessee. The ITAT observed that "the onus is on the person retracting to demonstrate that the amount surrendered was not an income rather than the duty of the AO to bring evidence for accepting the admission made." The ITAT noted that "till today the Assessee has never supplied any such goods nor refunded the amount. This shows the conduct of the Assessee and also demonstrates that the amount received was never for supply of goods under the so called contract. These are merely an eye wash." 19. Referring to the sequence of events, the ITAT noted that apart from the fact that there was no material to substantiate the Assessee's allegations that ....
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....it clear that if that writ petition is allowed and based thereupon the impugned order of the Tribunal also needs revision, if would be open to the Assessee to seek revival of this appeal." 22. Subsequently on 3rd September 2012 an order was passed by the Court noting that after dismissal of the writ petition challenging the order of the ITAT, the Assessee's fresh application under Section 254 (2) of the Act was dismissed on technical grounds. The said second rectification application was dismissed on 16th March 2012. The Court noted that the Assessee's appellate remedy under Section 260A of the Act had not been exhausted. It accordingly directed that the present appeal ITA No. 132 of 2008 be restored to file. 23. Consequent upon the above order dated 3rd September 2012, the present appeal was revived. On 28th January 2013, the following questions were framed for consideration: "1. Whether the return filed on 30th March 1994 is a valid revised return? 2. If the answer to question (1) above is in the negative, whether the surrender made in that return dated 30th March 1994 can be regarded as a piece of evidence? 3. Whether the Income Tax Appellate Tri....
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....ill have to be borne in mind. A report will then have to be called for from the concerned authority, in this instance the AO, and thereafter a decision taken on whether such a plea can be accepted. In the present case, the Assessee has failed to discharge the onus of showing even prima facie that he was compelled to make a statement during the search or to file a revised return in the assessment proceedings. The record of the assessment proceedings show that adjournments were granted as and when requested by the Assessee. Apart from the fact that he was represented in the assessment proceedings by a CA or an AR, he also had sufficient time and opportunity to reflect on what had been stated by him during the search proceedings. The Court accordingly rejects the plea that the Assessee did not voluntarily make the statement attributed to him in the course of search or that he was coerced during the assessment proceedings to file the revised return. Neither the original nor the revised return was non-est 26. The Court has examined Section 139 (1) (b), Section 139 (4) and Section 139 (5) of the Act. As already noted the return originally filed was found to be defective. A notice w....
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....vance to Mr. Radha Krishnan of Rs. 40 lakhs. As regards receipt of advance from the Russian party for the export, he relied on certain copies of bank documents. However, as noted by the ITAT these were only photocopies and not originals. 30. A further aspect that requires to be noted is that even before the CIT (A) the Assessee did not urge that documents produced by him were not considered. A perusal of the order of CIT (A) dated 30th January 2004 reveals that initially the appeal, filed on 13th October 1994 against the assessment order dated 31st March 1994 contained the following grounds: "(1) Learned Assessing Officer has erred on facts as well as in law in making addition of Rs. 40 lacs as unexplained income in spite of the fact that this amount is the return of the amount given earlier by the Appellant. (2) Learned Assessing Officer has erred on facts as well as in law in estimating the income from business at Rs. 1,00,000 against Rs. 22,400 declared by the Assessee. (3) Learned Assessing Officer has erred on facts as well as in law in making the addition of Rs. 40,95,120 as notional interest, which is neither permissible under the Act nor has th....
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....at there is a division of opinion of the High Courts on the issue whether the filing of a revised return obliterates the original return, or whether the revised return only rectifies the deficiency in the original return, but did not obliterate it. The Gauhati High Court in Sunanda Rak Deka v. CIT (1994) 210 ITR 988 (Gau) and the Calcutta High Court in CIT v. India's Hobby Centre (P) Ltd (1995) 78 Taxman 377 (Cal) have held that the revised return substitutes the original return. On the other hand, the decisions in Deepnarain Nagu & Co. v. CIT (1986) 157 ITR 37 (MP), CIT v. Girish Chandraharidas (1992) 196 ITR 833 (Ker) and Pyramid Saimira Theatre Limited v. CIT (2009) 316 ITR 75 (Mad) emphasise that a revised return can be filed only if an "omission or wrong statement in the original return" is discovered by the Assessee. 35. There is merit in the contention that the revised return should relate back to the return originally filed, minus the omissions and wrong statements. Even if the revised return replaces the original return, the assessment proceedings leading up to the revised return do not get obliterated. The decisions in CIT v. Chitranjali (1986) 159 ITR 801 (Cal), F.C. ....