2007 (1) TMI 132

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....otice under section 148 of the Income-tax Act, 1961 (for short "the Act") was issued to the assessee in March, 1985. The assessee did not file any return. Accordingly, the Assessing Officer issued notice under section 142(1) of the Act and the reassessment was done by making addition of Rs. 3,10,000 on account of cash credits appearing in the books which is as follows:                                    Rs. (i) Shri Prakash V. Thakkar      1,50,000 (ii) Ambica Corporation          1,00,000 (ii....

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....he Assessing Officer again made the same additions and the Income-tax Appellate Tribunal again by its order dated August 13, 2003, set aside the assessment and directed the Assessing Officer that he shall complete the assessment in accordance with the order of the Tribunal dated August 24, 1994. Consequent to this, a notice under section 142(1) of the Act was issued to the assessee to establish the genuineness of the credits and accordingly, the Assessing Officer again made the addition as unexplained loans for Rs. 3,10,000 and assessment stood completed at an income of Rs. 2,22,650. The assessee filed appeal before the Commissioner of Income-tax (Appeals) who upheld the addition for the reason that the Assessing Officer could make en....

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.... Under the peculiar facts and circumstances of the case, since the loans were not taken directly by the assessee, the helplessness shown by him to produce these parties or tell their present whereabouts could not be termed as non-co-operation, particularly, when the matter was more than 20 years old. Any remissness on the part of the Assessing Officer has to be at the cost of the national exchequer and must necessarily result in loss of revenue. On this point, a reference be made to the case of Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC) the relevant portion of which reads as under: "It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with ....