TaxTMI 
TaxTMI 
2017 (1) TMI 1649
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....e Act on 18.12.1997, requiring the assessee to file a return. No return was, however, filed even belatedly within the time limit provided u/s.139(4) of the Act. Since the AO had reasons to believe that the income chargeable to tax for the relevant assessment year had escaped assessment, he had issued a notice u/s.148 on 7.2.2000 which stood duly served on the assessee on 12.2.2000. As there was no compliance in response to the notice u/s.148 of the Act, several reminders were issued by the AO requiring attendance compliance from assessee's side. On 29.10.2001, the assessee's authorized representative had attended before the AO and promised to file the return by 10.11.2001 and accordingly, the case was adjourned by the AO till 16.11.2001. Again, there was non-compliance on 16.11.2001. Vide letter dated 28.12.2001, the assessee's representative had intimated the then CIT, Central-II that in view of the relevant books of accounts and other records being seized by the Enforcement Directorate and due to the closure of the assessee's business activity, the assessee was not able to finalize its account and has requested the Enforcement Directorate to furnish copies of the seized records s....
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....Act on a total income of Rs. 5 lakhs, as a result of which an additional demand of Rs. 6,12,750/- was raised against the assessee which included interest levied u/s.234A and 234B of the Act and surcharge levied in accordance with the prevalent rate. Penalty proceedings u/s.271(1)(b) and 271(1)(c) of the Act were also separately initiated by the AO and the AO has made the following additions/disallowances: a) cash deposit in the assessee's bank account amounting Rs. 5 lakhs was treated as the assessee's undisclosed income for the year in absence of any explanation for the source of the deposit. b) the business loss amounting to Rs. 45,73,744/- declared in the return was disallowed by the AO in absence of the corroborate evidences in support of the claimed loss. Aggrieved, the assessee went in appeal before the CIT(Appeals), who confirmed the finding of the A.O. Against this, the assessee is in appeal before us. 4. The ld. A.R. submitted that the dispute in this appeal is in respect of addition of Rs. 5 lakhs being the amount received from Excellent 2 Publicities as "undisclosed income". He submitted that Excellent 2 Publicities had paid the assessee, a sum of Rs. 5 lakhs in res....
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....ubmitted that the assessment is void ab initio. 5. On the other hand, the ld. DR, submitted that in the course of assessment proceedings, the AO found a credit of Rs. 5 lakhs on 26.6.96 in the assessee's current account C A 015934 with State Bank of Mysore, T. Nagar Branch. When asked to explain, the assessee merely stated that the deposit represented realization from the earlier years' sundry debtors. This was found to be a vague and unacceptable explanation. This was also not supported by any documentary evidence. The AO therefore treated the sum of Rs. 5 lakhs as income from undisclosed sources. Before the CIT(A), the assessee gave details of two parties from whom the realizations had been made. The assessee contended that sufficient opportunity was not given by the AO to furnish the requisite evidences. The confirmation dated 18.11.2004 from Excellent 2 Publicities was furnished. 5.1 The ld. DR, submitted that since the confirmation was additional evidence filed before the CIT(Appeals), a report was called for from the A.O. The AO in his report has pointed out that though Excellent 2 Publicities claimed to have collected cash from the two parties in respect of services ....
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....996. The A.O called for explanation regarding source of credit. The assessee submitted before the lower authorities that it was a realization of debtors relating to earlier years. The assessee explained before the AO this amount has been received from Excellent 2 Publicities, who in turn collected the said amount from following two companies. Date of collection Name of Company Amount in INR 22.06.1996 Tara Creations Rs.3/- lakhs 23.06.1996 Unique Communications Rs.2/- lakhs Total Rs.5/- lakhs The assessee also filed confirmation from Excellent 2 Publicities vide letter dated 18.11.2014 wherein confirmed that they had arrear advertisement charges for telecast in the assessee's channel. This was not accepted by the AO in the remand proceedings called by the Ld.CIT(A) vide his remand report dated 14.05.2007. According to AO, Excellent 2 Publicities claimed to have collected cash from above named two parties, in connection with the services rendered by the assessee bout eight years back, it has not furnished any documentary evidence in the form of copies of accounts maintained in respect of two concerns. In order to ascertain veracity of the claim of Excellent....
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.... ground that (i) it was time barred, (ii) holding that the assessment was not barred by limitation and (iii) sustaining the additions of Rs. 9,09,81,425/-. 2. He should have appreciated that the appeal had been heard on several occasions including on 16.5.2007, 30.11.2007 and 10.12.2007 and, at no point of the hearing, any doubt was raised reg. admissibility of the appeal. 3. The appellant submits that the fact that the appeal had been heard on several occasions, without the question of limitation being raised, would indicate that the appeal had been admitted. 4. Notwithstanding this, the CIT(Appeals) erred in holding that it was barred by limitation. 5. He overlooked that the alleged service of notice on 13.4.2006 was on someone, who was not authorized to receive and that the appellant had received copy of the order much later. 6. Even otherwise, he should have held that the last day for filing the appeal was 13.5.2006 (i.e. 17 days in April 2006 and 13 days in May 2006) and 13th and 14th May, 2006 being holidays (i.e. Saturday and Sunday), the last day for filing the appeal was 15.5.2006 on which date, the appeal has been filed. 7. The appellant, therefore, submits ....
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....5.02.1999. The AO also by another petition dated 05.03.1999 - requested the CIT (Appeals) that the Return of Income filed should be treated as a invalid one. The CIT (A), by his Order dated 16.03.99 reiterated his finding that the return filed was a valid one. Hence, the ld.A.R pleaded that these Orders had become final and, consequently, the return originally filed was held to be a valid return. The ld.A.R submitted the particulars of the dates of (i) filing the return (ii) completion of original assessment, etc. are set out below:- (i) Filing the Return of Income 24.03.98 (ii) Original assessment u/s.144 30.03.98 (iii) CIT (A)-I setting aside the assessment 21.12.98 (iv) Receipt of the Order of CIT(A) by CIT (Admn.) 05.02.99 (v) Misc. Petition by AO requesting the return might be treated valid 05.03.99 (vi) CIT (Appeals) rejecting the request of A.O. 16.03.99 (vii) Receipt of the said Order of CIT(A)-I by CIT (Admn.) before 20.09.04 (viii) The Assessment Order under appeal 30.03.06 8.1 Further, ld.A.R submitted that this appeal is against the Assessment Order dated 30.03.2006 made in pursuance of the First Appellate Order, setting aside the assessment. According ....
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....der dated 21.12.1998 and subsequent Amendment Orders there was no legal requirement on the part of the AO to issue a notice u/s.143(2) before proceeding to finalise the re-assessment Order. ii. The reassessment Order had clearly mentioned that various incriminating documents were seized by the. Enforcement Directorate Officials from the premises of the appellant and that the appellant company was not privy to the records which were seized by the Enforcement Directorate from its own premises and the additions were sustained on merits. 8.3 The ld. AR submitted that having held that the provision of sec.153(2A) is not applicable, the CIT(A) should have allowed the appeal. According to the ld. AR, the CIT(Appeals) had no power to travel on a ground, which was not the subject matter of appeal. Further, the ld. AR, submitted that the CIT(Appeals) erred in holding the provisions of sec.153(3) are applicable to this case, particularly when the CIT(A) had originally held that it was a valid return and normal procedural aspects of assessment should have been gone into and no specific finding or direction have been given. According to him, as the assessment has been completed u/s.143(3), w....
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....y of being heard to explain the above figures. So on these three issues, and with regard to the estimate of income at Rs. 20,00,000/- I set aside the assessment. The AO made the additions of Rs. 61,70,000/-, Rs. 2,24,00,000/-, Rs. 2,65,000/- and Rs. 17,650/- on a protective manner ..............." 9.1 The ld. DR, further submitted that on the application dated 12.1.1999 made by the then AO, CIT(Appeals) has passed corrigendum dated 5.2.1999 to the appellate order dated 21.12.1998, in which the CIT(Appeals) has stated as : "The Assessing Officer by his letter dt. 12.1.1999 had brought to my notice that there is an error in the above narration, in as much as the addition of Rs. 61,70,000/- was not made in a protective manner, but in a substantive manner. I find it to be a fact. For all other substantive additions, I have set aside the issues for reconsideration by the Assessing Officer. Therefore, this item of Rs. 61,70,000/- will come in that category of reconsideration and not in the category of protective assessment ............" 9.2 On 05.03.1999 the then AO has filed another miscellaneous petition before CIT(Appeals), praying for an amendment to the appellate order as below ....
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....ssment was given. Therefore, it was claimed that in the absence of any direction, reassessment cannot be done. On this contention, it is also brought to the attention of the assessee, the corrigendum dt. 05.02.1999 to the appellate order dt. 21.12.1998 passed by the CIT(A) in which it was clearly stated that the substantive additions are set aside for reconsideration by the Assessing Officer. The directions of the CIT(A) is already reproduced in Para No.4, Moreover, the intention of the CIT(A) in the original order dt. 21.12.1998 is also very clear that the additions were set aside only for giving more opportunities to the assessee. (c) The Assessee's AR has stated that since the order of the CIT(A) was passed on 21.12.1998, the time available for making an assessment u/s 153(2A) lapses on 313.2000, therefore, the assessment is barred by limitation of time. 9.5 According to the ld. DR the first order of the CIT(Appeals) dated 21.12.1998 has got merged with the order passed by CIT(A) on 16.3.1999 with reference to the Misc. Petition filed by the AO. Hence, the argument of the assessee's counsel has no merit. 9.6 Regarding whether the assessment order was set aside by CIT(A) wi....
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.... of being heard to explain the above additions and CIT(A) vide his Corrigendum order dated 05.02.1999 held that "For all other substantive additions, I have set aside the issues for reconsideration by the assessing officer." Thus, the CIT(A) set aside the assessment with direction to reconsider the issue afresh after providing opportunity to the assessee, therefore, the question of annulment does not arise in this case." Further, the ld. DR submitted that as specific direction given by the CIT(A), provision sub-sec.(3) of sec.153 squarely applicable to the facts of this case and there is no time limit to complete such assessment. 9.9.1 Regarding additions, the ld. DR, submitted that the additions made by the AO are on protective and substantive basis. However, the AO issued a detailed questionnaire dated 21.10.2005 and various details were called for from the assessee. Further, the AO vide letter dated 5.12.2005, provided various seized documents to the assessee and called for its objection. The assessee has not replied to the addition of estimation of business income. On advance out of unaccounted income of Rs. 61.7 lakhs, the assessee admitted that it is scrap of paper and it ....
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....otice, the assessee called to file return of income on or before 24.01.1996. There was no response to this notice. Vide letter dated 27.01.1996, the Authorised Representative of assessee Shri N.V.Balaji,C.A filed a letter requesting a month time to file full and correct return of income for assessment year 1995-96. This was said to be not fulfilled by the assessee. Subsequently, a letter was issued by the AO, namely ACIT, Central Circle -II(5) on 06.11.1996 intimating the assessee change in jurisdiction. Again on 27.08.1997 another letter was issued by the then ACIT, Central Circle-II(4), Chennai and the notice u/s.142(1) requesting the assessee to file return of income. Again another notice u/s.142(1) was issued on 01.10.1997 and there was no response from the above mentioned letter and then ACIT, Central Circle -II(4), Chennai issued another letter dated 20.03.1998 enclosing draft assessment order. In the meantime, the Managing Director of assessee Shri V.Baskaran filed return of income admitting 'Nil' income. The return was treated by the AO as invalid return vide his order sheet entry. Finally the assessment order was passed u/s.144 of the Act on 30.03.1998 declaring the income....