TaxTMI 
TaxTMI 
2019 (12) TMI 1498
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....just and at any rate very excessive. 3. That disallowance of Rs. 1,55,680/- out of the various expenses had made by the AO is arbitrary, unjust and at any rate very excessive." 3. The assessee filed return of income on 10.08.2006 showing income of Rs. 1,67,342/-. The case was not selected for scrutiny by the Assessing Officer which is evident from the fact that no notice u/s 143(2) of Income Tax Act was issued by the Assessing Officer, the time limit whereof was available up to 30th September, 2007. However, notice u/s 148 of Income Tax Act read with Section 147 of IT Act was issued on 7th December, 2007. Assessment order u/s 143(3)/148 of Income Tax Act was passed on 12.12.2008 wherein an addition of Rs. 1,55,680/- was made to the returned income and the total income was assessed at Rs. 3,23,022/-. The aforesaid addition of Rs. 1,55,680/- was made by the Assessing Officer taking adverse view of absence of supporting vouchers for expenditure claimed as per profit and loss account. The assessment order has been passed in Hindi, but English translation of the assessment order is available on record. The relevant portion of the translated version of the assessment order is....
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....itted that reasons recorded by the Assessing Officer, if any, for coming to the belief that income had escaped assessment, are not available. The Ld. DR also admitted, that apart from the assessment order dated 12.12.2008, which was passed after the assumption of jurisdiction u/s 147 read with section 148 of I.T.Act; there was nothing else which can be produced to support the belief that income had escaped assessment. To a specific query from the Bench as to whether any proceedings were pending before the Assessing Officer at the time when inquiries were conducted by the Assessing Officer prior to issue of notice u/s 148 of Income Tax Act on 07.12.2007 ; Ld. DR further admitted that no proceedings were pending before the Assessing Officer prior to issue of notice dated 07.12.2007 u/s 148 of Income Tax Act. 9. We have heard both the sides patiently and perused the materials on record carefully. It is not in dispute that reasons recorded by the Assessing Officer for coming to the belief that income had escaped the assessment, was neither supplied by the Assessing Officer to the assessee ; nor the assessment records were produced before the Ld. CIT(A). The reasons so recorded, if a....
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....e assessment order, which refers to the inquiry made by the Assessing Officer before issue of notice u/s 148 of Income Tax Act on 07.12.2007. The Assessing Officer, in the absence of any proceedings pending before him, has no authority to conduct any inquiry, except when prior permission has been taken by the Assessing Officer for conducting the inquiry u/s 133 of I.T. Act from the competent authority specified in second proviso to Section 133 of I.T.Act. There is nothing on record to show that the Assessing Officer had obtained prior approval of the competent authority specified in second proviso to Section 133 of I.T.Act. to undertake such inquiry. As noted in foregoing paragraph no. 8 of this order, the ld. DR had admitted that no proceedings were pending before the AO prior to issue of notice u/s 148 of I.T.Act. Thus, we find that the Assessing Officer has conducted inquiries without authority of law before issue of notice u/s 148 of I.T.Act. Thus, the assumption of jurisdiction by the AO u/s 147 of I.T.Act read with section 148 of I.T.Act is based on inquiries conducted without the authority of law. We are of the firm view that assumption of jurisdiction u/s 147 r.w.s. 148 of ....
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....tten that latter dated 20-03-2007 was issued by the company and on 28-07-2007, company did not issue any latter and thus this latter does not pertain to company. On 24/04/07, notice 271B was issued to the assessee for 02/05/2007, which was served on 24-04-2007 through speed post no. 206. In the response to the notice, the assessee attended himself on 03-05-2007 and adjourned for 14-05-2007 but on the date fixed 14-0-2207, no body attended nor filed any adjournment application. On 06-08-2007, notice u/s 271B was issued for 17-08-2007. In response to the notice, on 17-08-2007 explanation of the assessee was received and after that on penalty u/s 271B of the IT Act was imposed at Rs.9,735/- by passing the order on 13/09/2007. During the year, assessee was in receipt of profession/ technical fee of Rs. 19,47,136/- Assessee has filed his return of income by computing income u/s 44AD, where as the income of the assessee falls u/s 194J. A notice u/s 148 of the Act 1961 was issued on 07/12/2007, by forming of belief that income of Rs.19,47,136/- has escaped assessment. Notice was served on 10/12/2007 through speed post No.2656. In response to....
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....assessee's counsel attended and case adjourned for 22-12-2008 for justify the expenditure as claimed in profit & loss account. On fixed date 22-12-2008, assessee counsel attended and filed written submission in respect of vouchers relating to expenditure that he has reflected the actual expenditure and the same have only been shown in his Profit & Loss A/c. It is clear from the Bank A/c of the assessee that the total receipts are entered/credited in the bank A/c and further withdrawals from the bank A/c are in fact for the purpose of meet out the expenditure as claimed in Profit & Loss A/c. Case was discussed. During the course of discussion, the counsel of the assessee agreed for disallowance of expenditure and make an addition to the income of the assessee for not producing the vouchers as per details below; 1. Office Expenditure Rs.66,000, 2.Office Rent Rs. 60,000, 3.Printing And Stationary Rs.22,500. 4.Repair and Maintenance Rs.12,000, 5.Misc. Expenses Rs.17,365. The total sum of Rs.17,787/- i.e. 10% of total aforesaid expenditure of Rs.1,77,865/- may be disallowed and add to the total income of the assessee. Also, assessee agreed to ....
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....of the assessee. Document 6 2.2 The facts of the case are that a return of income declaring total income at Rs. 1.67.342 was filed on 10.08.2006 and processed on 03.01.2007. The assessee had declared professional/technical fee of Rs. 19,47,136 and declared income U/s 44AD at 8% of this amount. The AO proceeded to make verification of the Form 16A and in response received two letters from the payer of the aforesaid fee. In one letter, the nature of payment was stated to be professional/technical fee whereas in the other it was stated to be contractual payment. On further enquiries, it was confirmed by the party concerned that the letter in which the payment was shown as contractual had not been issued by company. The AO noted that the provisions of Section 44AD were not applicable to the assessee. Section 194J was the provision applicable to the assessee. Therefore, on 07.12.2007. a notice U/s 148 to be issued to the assessee for having concealed income of Rs. 19,47.136. Subsequently, notices U/s 142(1)/143(2) were issued. It appears that a return of income was filed during the re-assessment proceedings. Notices U/s 143(2)/142(1) were issued.....
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....roviding contractual services under an agreement with M/s ONGC and maintained day to day register, bills and vouchers. The net profit was declared @ 8%. With regard to the disallowance of expenses, it was stated that the assessee had produced youchers "partly and also justified the claim of aforesaid expenses by way of Bank Withdrawals". It has been stated that the assessee was not able to produce complete voucher before the AO. 3.2 In order to verify the assessment records, a requisition for the same was made to the ITO Ward- 2(1), Meerut vide letter dated 26.06.2013. In response, a letter dated 27.06.2013 was received stating that the assessment records are not readily available. Another letter dated 01.07.2013 was addressed to the AO requesting him to make available the assessment records to this office by 14.07.2013 and, if not provided by that: Document 8 date, it will be assumed that the AO has not been able to produce the records for verification. However there has not been any response to this letter. Resultantly, no verification could be carried out by this office about the tampering of the original TDS certificates, as alleged i....
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....ofessional/technical fee and not contractual payment. It has also been admitted that no voucher for express were available. Surprisingly, it is now claimed that even the TDS certificate is not available with the assessee. Apart from the above, a specious argument has been made that a TDS certificate cannot be made the basis for invoking the provisions U/s 148 as TDS provisions are machinery/procedural provisions. 3.5 The facts of the case have been considered. Theoretically, a person may be in receipt of professional/technical fee but may not have incurred any expense in earning such fee. The fee may have been received in consideration of some special skill/competency, for which no expense may have been incurred. In the case under consideration, it appears that the assessee is not forthcoming about the exact nature of the services rendered for which he is in receipt of technical/professional fee. According to Section 44AA, every person carrying on business or profession, if the gross receipt exceeds Rs. 10 lakh, is required to keep and maintain such books of account and other documents as may enable the AO to compute his total income in acc....
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....vague and not in fact reason to believe as contemplated u/s 147/148 of the Act. Latchmani In the case of ITO vs. Eakmi Mewal Dass in 103 ITR 437, the Supreme Court held: (a) (b) The reason to believe must have a material bearing on the question of escapement of income. It does not mean a purely subjective satisfaction of the AO; the reason must be held in good faith and cannot merely be a pretence. The reason to believe must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of AO and the formation of belief regarding escapement of income. Document 13 12. 13. 14. 15. 16. For the formation of "reason to believe", some tangible material must have come to notice of AO after the completion of assessment even if assessment is completed u/s 143(1) of the Act. 354 ITR 536 (Del) CIT vs. Orient Craft Ltd. 366 ITR 115 (Del) Mohan Gupta (HUF) vs. CIT 362 ITR 693 (Del) CIT vs. Atul Kumar Swami 218 CTR 264 (Raj) CIT vs. Smt. Jyoti Devi If the material....