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TaxTMI 
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2016 (11) TMI 1629
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.... both the appeals by a consolidated order for the sake of convenience. However, we proceed with narrating the facts for assessment year 2003-04. 3. Assessee is a partnership firm stated to be engaged in the business of sale of Naphtha and Superior Kerosene Oil (SKO). Assessee filed its return of income for A.Y 2003-04 on 31.10.2003 declaring total loss of Rs. 96,69,741/-. The return of income was initially processed u/s 143(1) of the Act. Subsequently, on the basis of information received from Joint Commissioner of Sales- Tax, Economic Intelligence Unit, Mumbai through DDIT(Inv), Nagpur, it came to the knowledge of the AO that assessee had indulged in business of sale of Naphtha, Superior Kerosene Oil etc and during investigation by the Sales-Tax Department it came to its knowledge that the parties to whom the assessee had sold goods did not exist and further the sale of petrol products though actually sold in Maharashtra State but were shown to have been sold out of Maharashtra State and thus there was evasion of differential amount of sales-tax at 16% which was evaded by assessee and the amount of Rs. 3,40,....
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....TR (Del) 98/233 CTR (Del) 69; CIT vs. Shri Rajastan Syntex Ltd. (2009) 212 Taxation 275 (Raj); DCIT vs. Rainee Singh (2009) 125 TTJ (Del) 846; CIT vs. Atul Jain (2007) 164 Taxman 33 (Delhi) & CIT vs. Smt. Paramjit Kaur (2008) 168 Taxman 39 (Punj &. Har), The appellant has filed the objection on 08-062010 to issue of issue notice u/s.148. However, the learned A.O did not dispose off the objections and proceeded further and completed the assessment. As the assessment order is passed without disposing off the appellant's objection, it is bad in law and void ab initio and liable to be annulled. The learned AO is bound to dispose of the objections filed by the appellant by speaking order. As A.O. failed to do so, the assessment order passed is, therefore, bad in law. The impugned notice u/s.148 was issued after four years from the end of that assessment year, without recording reasons to believe that income has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. It was also argued that the sanction given by the authority for issue of notice under Sec....
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....d as to how this is undisclosed income of the appellant. In remand report also the AO has not enlightened anything in this regards and not adduced any evidence to established as to how it is undisclosed income of the appellant. I further noted that it is not a case of Sales tax department that the assessee had collected more amount as Sales tax from customers than shown in the books. So also there is no finding of the A.O with any supporting evidence, that the appellant has collected more sales tax than shown in the books. Further, I find from the record that the only, question that arises is of the rate of calculation of Sales tax payable on sales reflected in books of account. Even if the sales tax department raised, such additional demand on the sales shown in the books the appellant, that represents legal liability on entries in the books, there is nothing on record that the appellant has not recorded any sales in the books of accounts. Further, I find that the report of Sales tax department that there was additional liability of Sales tax to the extent of Rs. 2,60,05,953/-,on the sales shown by the appellant in the books, does not constitute le....
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....d his mind to arrive at a belief that income has escaped assessment, the proceeding cannot be considered as validly initiated. This view is supported by the decision of Hon'ble Delhi High Court in the case of Commissioner of Income Tax V/s Sfil Stock Broking Ltd (2010) 41 DTR (Del) 98/233 CTR (Del) 69. In this case, it is held that" It was clear that the Assessing Officer referred to the information and the two directs as 'reason' on the basis of which he was proceeding to issue notice under section 148. These could not be the reasons for proceedings under section 147 /148. From so-called reasons, it was not at all discernible as to whether the Assessing Officer had applied his mind to the information and independently arrived at a belief that, on the basis of the material, which he 'had before him, income had escaped assessment. Therefore the reassessment was not valid." Further, though the appellant has filed the objection on 08-06-2010 to issue of issue notice u/s.148, the A.O has not disposed off the objection and proceeded further and completed the assessment. As the AO has failed to do so, the assessment order passed i....
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....e Ex Parte assessment cannot be upheld. 3. On the facts, in law and in the circumstances of the case the ld. CIT(A)-I, Nashik has erred in deleting the addition of Rs. 2,60,05,953/- on account undisclosed income of evasion of Sale Tax. 4. On the facts, in law and in the circumstances of the case the ld. CIT(A)-I, Nashik has erred in deleting the addition/disallowance of Rs. 1,77,96,741 (Rs. 81,26,860/- plus Rs. 96,69,741/-) on account of business income estimated @ 5% on total sales. 5. On the facts, in law and in the circumstances of the case the ld. CIT(A)-I, Nashik has erred in deleting the addition of Rs. 2,13,19,380/- on sales of goods in the market with profit margin of Rs. 3/- per liter. 6. On the facts, in law and in the circumstances of the case the ld. CIT(A)-I, Nashik has erred in deleting the addition of Rs. 1,12,163/- on account income from other sources. 7. On the facts, in law and in the circumstances of the case the ld. CIT(A)-I, Nashik has erred in deleting the interest u/s. 234A and u/s. 234B of the I.T.Act. 8. It is therefore, prayed that the order of the Ld. CIT(A)-I, Nashik may be vacated and that of the Ass....
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.... prejudice to the assessee. He further submitted that Hon'ble Apex Court in the aforesaid decision has held that while applying the principles of natural justice, the authorities must always bear in mind that the ultimate objective of principles of natural justice is to ensure a fair hearing and to ensure that there is no failure of justice. He also placed reliance on the decisions of Hon'ble Gujarat High Court in the case of Principal Commissioner of Income-Tax-2, Vadodara Vs. Sagar Developers (2016) 72 Taxman.com 321 (Guj), Commissioner of Income Tax Vs. Sumantbhai C. Munshaw (1981) 128 ITR 142(Guj), Superintendent (Tech.1), Central Excise & Others Vs. Pratap Rai (1978) 114 ITR 231 (SC), Guduthur Bros Vs. ITO (1960) 40 ITR 298 (SC). He therefore after relying on the aforesaid decisions submitted that the order of ld.CIT(A) holding that the assessment order without disposing the objections of the assessee to be bad-inlaw and void ab initio, be set aside and that the matter be remitted to AO with necessary directions. On the merits of the addition that were made by AO and deleted by ld.CIT(A), he submitted that the facts o....
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....pass a further / fresh order as it would lead to unnecessary harassment of the assessee. With respect to the ld.DR's reliance placed on the decisions in the case of State Bank of Patiala Vs. S.K. Sharma (supra), he submitted that it was a case with respect to the proceedings under labour law and therefore the facts were different and therefore the ratio of that decision would not be applicable to the present facts. He further submitted that the reliance placed by the ld.DR on the other decisions also could not be applied to the present case because the facts of those cases are distinguishable from the facts of the present case. On the issue of ld.DR's reliance placed on the decision in the case of Shriram Petroleum Industries (supra), for the merits of addition, he submitted the facts of the case in case of Shriram Petroleum (supra) are distinguishable as in that case it was an ex-parte decision and assessee had accepted to go back. He therefore submitted that the decision in the case of Shriram Petroleum Industries (supra) cannot be applied to the present facts. He further submitted that the limitation period ....
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....the Tribunal had set aside the orders and restored the assessment to the AO to pass fresh orders after disposing of the objections to re-opening, the Hon'ble High Court observed as under: "8. We note that once the impugned order finds the assessment order is without jurisdiction as the law laid down by the Apex Court in GKN Driveshafts (supra) has not been followed, then there is no reason to restore the issue to the Assessing Officer to pass a further/fresh order. If this is permitted, it would give a licence to the Assessing Officer to pass orders on reopening notice, without jurisdiction (without compliance of the law in accordance with the procedure;, yet the only consequence, would be that in appeal, it would be restored to the Assessing Officer for fresh adjudication after following the due procedure. This would lead to unnecessary harassment of the Assessee by reviving stale / old matters." 9. Before us Revenue has not placed any contrary binding decision in its support. The decisions relied upon by the ld.DR are distinguishable on facts and are therefore not applicable to the facts of the present case. I....