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2021 (9) TMI 968
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....een balance in account as per the books and the balance as per bank statement. 2. The appellant craves leave of Your Honour to add to, alter amend and/or delete all or any of the foregoing grounds of appeal." 3. The facts in brief are that the assessee filed his return of income on 30.11.1990 declaring an income of Rs. 34,90,090/-, without accompanying with it the balance Sheet and P & L account for the year. When this fact was pointed out to the assessee, the assessee filed a fresh return of income on 12.11.1991 declaring his income at Rs. 34,94,650/-. In the meanwhile, a search action u/s 132(1) of the Act was carried out on the assessee by the Investigation Wing, Mumbai on 28.02.1992. During the course of search, various incriminating materials were found and seized including some share certificates and documents relating to investments in shares etc. Subsequently, a search action in this case was also carried out by the Central Bureau of Investigation on 04.06.1992 and some documents/records were seized by them also. The assessment u/s 143(3) r.w.s. 145(2) of the Act was completed by the AO on 26.03.1993 at an assessed income of Rs. 1,90,67,99,460/- after rejecting ....
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.... bank statement of Uco Bank, Harnam Street Branch by observing and holding as under: "4.6 From the aforesaid submissions, it is observed that the assessee claims that certain transactions of sale of securities were undertaken on behalf of SB! on 27.03.1990, however, subsequently these transactions were cancelled and the entries reversed, it is pertinent to note that this plea now being taken that the said payments of Rs. 5,51,63,286/- relates to proposed transactions of sale of securities for SBI which were subsequently cancelled was never taken either before my Ld. Predecessor or even before the Hon'ble ITAT. Therefore, the onus was on the assessee to substantiate this new claim made in the present proceedings along with proper supporting evidences. The assessee vide order sheet noting dated 17.09.2018 was specifically asked to furnish necessary supporting evidences in respect of the payments claimed to have been made to SBI for an aggregate amount of Rs. 5,51,63,286/-. However, other than submitting the client's constituent ledger account from his own books, the assessee has not submitted any other evidence. It is pertinent to point out that this client constitue....
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....efore, the cheques issued to them were not deposited in the client's bank account Thus, the assessee also does not dispute that the said payments of Rs. 5,51,63,286/- have not been debited in his bank account since the said cheques were never deposited by its client. Since this fact is not disputed, no purpose will be served if the material collected by the AO from UCO Bank on the basis of which he concluded that the said cheques have not been debited in the bank account, is not made available to the assessee since the assessee also accepts that the said cheques were never deposited by its client. Moreover, it is also observed that the various other discrepancies pointed out by the AO in the remand report in the reconciliation statement is after verification of the assessee's own books of accounts. The only external evidence used by the AO to draw an adverse inference was the enquiry carried out from UCO Bank which revealed that the said cheques have not been debited in the account of the assessee and this fact is now not being disputed by the assessee. 4.8 In view of the aforesaid discussion, the following observations are made in respect of the reconciliation sub....
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....tes claimed for the various transactions, the mode of payment and the payee. These discrepancies have been attributed by the assessee to typographical mistakes. However, the fact remains that in the first round of proceedings before my Id. Predecessor as well as the present proceedings, these discrepancies have not fully been addressed. 4.9 In view of the aforesaid discussion, it is apparent that despite sufficient, opportunities, the assessee has not been in a position to substantiate with proper supporting evidences the said reconciliation statement explaining the difference in the balance in its account with UCO bank as per the bank statement and as per the regular books of the assessee especially related to the claim of payments for an aggregate amount of Rs. 5,51,63,286/- to SBI on 27.03.1990 for the alleged transaction for sale of securities for SBI which got subsequently cancelled. Accordingly, an amount of Rs. 5,51,63,286/- is considered for addition to the total income of the assessee for the relevant year. Accordingly, the said addition made by the AO of Rs. 5,60,33,309/- is restricted to an amount of Rs. 5,51,63,286/-." 5. After hearing both the parties and p....
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....ted in the bank account of the assessee even in the subsequent year. We have also seen the books of accounts of the assessee and found that on 27.03.1990 the assessee has made payments of Rs. 5,51,59,650/- and Rs. 3,636/- against the purchase of 40.95 lakh units 1964 scheme and 2.70 hundred units, 1964 scheme. The extract of the account of SBICA which stands for SBI Capital Market Ltd. are extracted below for the month of March 1990 and April 1990 as under: 7. We have also examined the books of accounts of the assessee in respect of subsequent year and found that in the month of April these entries were reversed by the assessee in his books of accounts. The Ld. CIT(A) confirmed the addition on the ground that assessee has failed to produce the bank statements to corroborate these entries by overlooking the fact that AO has given a finding in the remand report that these cheques were never encashed and presented in the bank. Therefore, we are not in concurrence with the views of the Ld. CIT(A) on this issue. In fact, the bank statement relates to the year 1993 and therefore we find merit in the contention of the Ld. A.R. that it is rather impossible to produce the statement belon....
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....urce which is trading in securities for which the assessee is following mercantile system of accounting. Accordingly, the AO held that when the assessee is following mercantile system of accounting in respect of trading in securities it would be not be correct on the part of the assessee to follow cash system of accounting in respect of interest income of Rs. 34,92,079 which is from the same source. The AO also added Rs. 13,11,332/- as accrued interest on NLC bonds which was again not offered by the assessee on the ground that assessee is following cash system of accounting. In the set aside proceedings, the Ld. CIT(A) deleted the addition by observing and holding as under: "4.12 The Hon'ble ITAT has directed that this issue be adjudicated in line with its decision in the case of the assessee himself for A.Y. 1989-90. From the order of the Hon'ble ITAT for A.Y. 1989-90, it is observed that the Hon'ble ITAT noted that for the preceding year i.e. A.Y. 1988-89, the assessee had not maintained his books of accounts and therefore, the issue was decided against the assessee. It was further noted by the Hon'ble ITAT that its decision for the preceding year cannot ....
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....urities on the stock exchange. The assessee filed the return of income on 30.11.1990 declaring an income of Rs. 34,90,090/- but the same was not accompanied with the balance sheet and P&L account and therefore was treated as invalid. Therefore, the assessee filed the revised return of income declaring an income of Rs. 31,94,650/-. The assessment was completed under section 143(3) read with section 145(2) of the Act vide order dated 26.03.1993 determining the total income of the assessee at Rs. 190,66,99,460/- which was challenged before the first appellate authority. The Ld. CIT(A) vide order dated 28.10.1994 allowed partial relief to the assessee. While the additions deleted by the Ld. CIT(A) were accepted by the department and no second appeal was filed, the appellant challenged the said order before Hon'ble Tribunal in ITA No. 8025/Mom/1994. The Tribunal vide its order dated 25.09.2008 disposed off the appeal partly deleting the additions made by the A.O. as well as partly confirming the same. Further, some of the issues were set aside by Hon'ble Tribunal to the file of Ld. A.O. as well as to the file of Ld. CIT(A). In the meantime, while the said appeal was pending befo....
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.... Date 1. Due Date as per the first limb of section 275 (l)(a) of the Act 31.03.1993 2. Due Date as per the second limb of section 275 (l)(a) of the Act (presuming that the order of the Ld. CIT(A) was served in November 1994) 31.05.1995 17. In light of the above, the A.O. ought to have passed the penalty order u/s. 271(l)(c) of the Act on or before 31.05.1995. Since the penalty order has been passed on 28.04.2006, the same was beyond the limitation period and hence void ab initio. The ld AR defense of his arguments relied on the followings decisions: ACIT v. Jasbir Singh [124 Taxman 124 (Mag.)] J. Srinivasan v. ACIT [404 ITR 51 (Mad.) 18. Alternatively and without prejudice ,the ld AR submitted that the notice issued by the A.O. is also not in accordance with the provisions of the Act and therefore invalid as it has been issued in standard format and without application of mind. The perusal of the notice issued by the A.O. on 26.03.1993 showed that the irrelevant limb in the said notice has not been struck off by the A.O. As such, the notice has not been issued in accordance with law and after due application of mind. The ld AR contended t....
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....the Act which are extracted below: "275(1) No order imposing a penalty under this Chapter shall be passed (a) in a case where the relevant assessment or other order is the subject matter of an appeal to the Deputy Commissioner (Appeals) or the Commissioner (Appeals) under section 246 or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the Deputy Commissioner (Appeals) or the Commissioner (Appeals) or. as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever period expires later; ....... ......." 21. Upon close and careful perusal of the above provisions, we find that the order imposing penalty has to be passed either (a) before the end of the financial year in which proceedings during the course of which action for imposition of penalty have initiated are completed or (b) before 6 months from the end of the month in which the order of the Ld. CIT(A) or Tribunal is passed whichever i....
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....itation. As per section 275(l)(a)(ii), penalty in such a case could be imposed within six months from the date of receipt of order of the Commissioner (Appeals). Though the Assessing Officer could have waited till the receipt of the order of the Tribunal, but once this course had not been adopted, the order must have been passed within six months from the date of receipt of the order of the first appellate authority. Accordingly, the penalty order was barred by limitation." b) Identical view was also rendered in the case of J. Srinivasan v. ACIT [404 ITR 51 (Mad.)] Considering the facts of the instant case in the light of provisions of section 275 of the Act and decisions cited by the ld AR, we are inclined to hold that the penalty order passed beyond the time limit permissible u/s. 275(l)(a) of the Act and is invalid and void ab initio. Consequently the same is quashed. Since we have allowed the appeal of the assesse on limitation, the other without prejudice and alternative contention is not being decided. 23. The appeal is not argued on merits and therefore not being adjudicated. 24. Accordingly, the appeal of the assessee is allowed. 25. Since we have allow....