AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 1054
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....ereinafter called "the Act") for assessment year 2009-10 , second dated 28.12.2016 passed by AOunder Section 144 r.w.s. 147 of the 1961 Act for assessment year 2010-11 . We have heard both the partiesin Virtual Court through Virtual hearing mode. 2. The grounds of appeals raised by assesseein memo of appeals filed with Income Tax Appellate Tribunal, Circuit Bench, Varanasi (hereinafter called "the tribunal") for assessment year 2009-10, reads as under: "1. Because the Learned CIT(Appeals) has erred in law as well as on facts in dismissing the appeal without appreciating or considering the merits of the appeal. 2. Because the Learned CIT(Appeals) has erred in law as well as on facts in not appreciating that the entire assessment on the assessee is due to a financial fraud by using the assessee's name where the assessee is totally unaware and uninvolved. 3. Because the Learned CIT(Appeals) has failed to appreciate that the entire assessment has been framed without giving proper opportunity of being heard and also without confronting the assessee with the incriminating material used against her. 4. Because the Learned CIT(Appeals) has erred i....
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.... notice issued by AO u/s 148, but the assessee did not comply with the aforesaid notice and no return of income in pursuance to notice u/s 148 was filed by the assessee. The AO issued non compliances letters dated 06.07.2016 and 10.11.2016 , but the assessee did not reply to said letters also. The AO issued Show Cause Notice(SCN) u/s 144 and notice u/s 142(1) r.w.s. 129 , dated 02.12.2016 to the assessee through speed post , which was returned unserved. Then the notice was served by AO through affixture on 10th December, 2016. The assessee did not comply even to this notice .Thus, the AO observed that the assessee has no explanation to offer with respect to these credit receipts, hence the AO treated the entire amount of Rs. 1,37,00,000/- as unexplained money , and deemed the same to be the income of the assessee under Section 69A of the Act whichstood added by the AO to the income of the assessee, vide assessment order dated 29.12.2016 passed by AO u/s. 144 r.w.s. 147 of the 1961 Act 4. Aggrieved by the assessment order dated 29.12.2016 passed by AO u/s 144 r.w.s. 147 of the 1961 Act, the assessee filed first appeal with ld. CIT(A) . The assessee appeared in person before ld. C....
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....ne in her name. The appellant has filed an online FIR against the said company a copy of which is submitted before your honor for perusal. An affidavit duly sworn by the appellant and Notarized by court is also submitted before your honour for perusal and doing justice with the appellant. In the circumstances of the case your honor is very humbly requested to delete the addition and cancel the assessment as appellant has never filed any return for the year under appeal. 4b. The assessee submitted before ld. CIT(A) , an affidavit explaining that she is an household lady and have not done any type of business during previous years relevant to A.Y. 2009-10 and A.Y. 2010-11 and as such income is not chargeable to tax . The assessee also claimed before ld. CIT(A) that she has not filed return of income and that she has no taxable income during those years. It was submitted that no notice was served upon the assessee as claimed by the AO. The assesseefurther submitted that notice under Section 143(2) was not issued by the AO, and hence assessment order passed by the AO is invalid void ab-initio and against the provisions of law. 4c. The learned CIT(A) forwarded submissions of the a....
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.... discuss her case but no one appeared nor any reply was submitted Even a show cause notice dated 02.12.2016 was totally ignored by the assesseee. Left with no option the notice dated 02.12.2016 was thereupon affixed on 10.12.2016. Scanned copy of the said notice is as under:- No compliance were made by the assessee for verification during the course of assessment proceeding, hence order u/s 144 r.w.s. 147 was made against the income of Rs. 1.37 Crore as unexplained money and deemed to be the income of the assessee u/s 69A of the Act. 4. The assessee preferred an appeal before the Ld. CIT(Appeal), Varanasi against the addition of Rs. 1.37 Crore. The written submission consist of statement of facts of appeal and submission before Hon'ble Commissioner of Income Tax(Appeal) stating that she is a house-wife having no source of income. She has not done any business in A.Y. 2009-10 on or before and never filed any return for the A.Y. 2009-10. In her submission she says that the ICICI bank account (031001518299) is not pertaining to her and she is not aware for that account and also stated that once she had applied for a job in M./s Ovam Commerce Private Ltd., 56/2 Ki....
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....ve been received by an assessee is on him/her. When the nature and sources of a receipt, whether is to be of money or other property and no explanation was made by the assessee, it is open to the revenue to hold that it is the income of the assessee and no further burden lies on the revenue to show that the income from any particular source. Roshan Di Hatti Vs. CIT (SC) 107 ITR 938. 8. In view of the above it is submitted that the theassessee's involvement in whole matter is only gain some commission and assessee is completely aware from all transactions. The explanation given by the assessee is not satisfactory, hence the ground is not acceptable." 4d. The learned CIT(A) called for the response of the asseseeto the Remand Report filed by the AO, which is reproduced hereunder: "Sir, the appellant is a house wife and she has neither filed any return of income nor received any statutory notices issued from the department. It is submitted that appellants marriage was performed through court as the parent of the appellant were not happy and opposed for this marriage. The relation with appellant and her parent were not good and as such after the marriage the app....
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....illed and not conversant about business activities, Sir, the living standard and financial position of appellant is very miserable and cannot afford to pay such huge illegal demand. In view of above facts and in the circumstances of the case your honor is humbly prayed to delete the addition and save the poor appellant in the interest of justice." 4e. The learned CIT(A) considered the facts of the case as wellsubmissions of the assessee and material on record. The learned CIT(A) observed that the AO has issued a notice under Section 148 which was duly served on the assessee's address. The ld. CIT(A) also observed that notices under Section 142(1) were also issued by AO which were also served on the assessee's address available on record. There was no compliance on the part of the asssessee to notices issued by the AO u/s 148 as well notices issued by the AO u/s 142(1) . The assessee never filed any return of income in response to notice issued by AO u/s 148. The AO issued Show Cause Notice(SCN),dated 02.12.2016. So far as contention of the assessee, that no notice u/s 143(2) was issued and served upon by the AO and hence assessment u/s 144 is bad in law, the ld. CIT(A) observed ....
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....ention that the bank account was opened fraudulently by M/s Oven Commerce Pvt. Ltd. remained unproved. It was also observed by learnedCIT(A) that the amountsweredeposited in the bank account of the assessee over a period of time which have been transferred to the bank account of the company M/s Oven Commerce Pvt. Ltd. . The learned CIT(A) observed that since the amounts have been deposited in the bank account of the assessee, the onus lies upon the assessee to explain the nature and source of these deposits , and the assessee failed to discharge its onus. The learned CIT(A) held that the AO's action in treating the deposits in the bank account of the assessee maintained with ICICI Bank as unexplained deposit u/s. 69A of the 1961 Act was proper and justified. Thus, the ld. CIT(A) sustained the additions to the income to the tune of Rs. 1,37,00,000/- as was made by the AO for ay: 2009-10, and ld. CIT(A) dismissed the appeal filed by the assessee,vide appellate order dated 11.07.2019. 5. Aggrieved by dismissal of the appeal filed by ld. CIT(A), the assessee has filed second appeal with the tribunal. The Ld. Counsel for the assessee submitted that the assesseeis a housewife. Our att....
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....mmerce Pvt. Ltd. . It was submitted that even the assessee filed an application under RTI Act, with department. 5b. The Ld. Sr. DR submitted on the other hand submitted that the assessee has duly filed return of income under Section 139 of the Act , on 26th April, 2011 for assessment year's 2009-10 as well as 2010-11 , the copies of which are placed at page No. 30-31 of the paper-book. It was also submitted that the assessee claimed refund of TDS amount of Rs. 17,66,512/-out of total TDS of Rs. 24,02,503/-, for ay: 2009-10. It was also submitted that the assessee efiled income tax return in ITR-4, which is a return of income for declaring business income. The ld. Sr. DR submitted that the assessee did not participated in the assessment proceedings. 5c.At this point, the Ld. Counsel for the assessee submittedthat the assessee denies to have filed any return of income with department, for ay: 2009-10 as well 2010-11. 5d. The Ld. Sr. DR drew our attention to reasons recorded by the department, before opening of the assessment (placed on record in file) u/s 147/148 of the1961 Act. It was submitted that ld. PCIT, Varanasi recorded satisfaction on 22.03.2016 , that it is a fit c....
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....d that even legal notices were also issued by Advocates on behalf of the assessee, to said M/s Oven Commerce Private Limited. It was submitted that the amounts which stood credited in this bank account in her name with ICICI bank were not the transactions of the assessee. It was submitted that the assessee applied for a job with Oven Commerce Limited and submitted her photograph, educational documents, Aadhar Card etc. , which was later misused by that company. It was submitted by ld. Counsel for the assessee that although she applied for the job with Oven Commerce Private Limited, but she was never offered job by said company. It was submitted that the assessee applied for obtaining reasons for reopening of assessment , on 17.03.2022 , but the same were not provided. The assessee even filed application under RTI on 17.3.2022 , to get reasons recorded for reopening of the assessment, but the same was not furnished. The ld. Sr. DR has placed on record reasons for reopening of assessment , for both the years. It was submitted by ld. Counsel for the assessee, that the reasons were not properly recorded , as Sanction u/s 151 was not proper. On being asked by the Bench, the Ld. Counsel ....
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.... which was approved by the competent authorities finally by learned Principal Commissioner of Income-tax, Varanasi on 22.03.2016. The said approval granted by ld. PCIT, Varanasi is reproduced hereunder: The assessee has raised challenge that the said approval was not valid as the relevant competent authority has not approved the same. Reference is drawn to the provisions of Section 151 of the 1961 Act, as was in force at the relevant times , which reads as under: Sanction for issue of notice 151. (1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a f....
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....lt in the satisfaction recorded /approval granted by ld. PCIT, for reopening of the concluded assessment.The reliance of the ld. Counsel for the assessee on the decision of Mumbai-tribunal in the case of Bharti Axa Life Insurance Company Limited (supra), is misconceived and is hereby rejected. Thus, this contention of the assessee is rejected. We order accordingly. The reopening of the assessment was done by the AO by issuing notice dated 29.03.2016 u/s 148, while the impugned assessment year is ay: 2009-10, thus reopening of the concluded assessment was done after four years but within six years from the end of the assessment year, and further that original return of income was processed u/s 143(1) and no assessment was originally framed by Revenue u/s 143(3). Thus , first proviso to Section 147 is not applicable. Further , the income of the assessee allegedly escaping assessment was Rs.1,37,00,000/- based on the information received by AO from ADIT(Inv.) , Kolkatta , and the AO had reasons to believe that the income of the assessee to the tune of Rs.1,37,00,000/- for the impugned assessment year 2009-10 has escaped assessment, which led AO to initiate invocation of provisions ....
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....e been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax ; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return ; [(ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E;] (c) where an assessment has been made, but- (i) income chargeable to tax has been underassessed ; or (ii) such income has been assessed at too low a rate ; or ....
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....iod commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: Provided further that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and (b) subsequently a notice has been served under clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section 143, but before the expiry of the time limit for making the assessment, reasses....
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....efore ld. CIT(A) .The ld. CIT(A) after considering submissions of the assessee dismissed the appeal of the assessee, both on legal grounds as well on merits of the issue's raised by the assessee in her appeal. We have elaborately discussed proceedings before the ld. CIT(A) in preceding para's of this order, and the same are not repeated here. The crux of the arguments of the assessee is that , firstly that she never received any of the notices issued by the AO during reassessment proceedings. Secondly , she never filed any return of income on 26.02.2011 with department, for the impugned assessment year . Thirdly, that so far as credits in the bank account in her name with ICICI Bank , Sigra, Varanasi is concerned, the said bank account was opened fraudulently by M/s Oven Commerce Private Limited by misusing her photo, ID, Aadhar Card etc. and all these transactions in this ICICI Bank account opened in her name relates to and pertains to M/s Oven Commerce Limited , and the assessee has nothing to do with it. The assessee submitted in her defense that she got married to Mr. Luvkush Choudhary in 2004 , against the wishes of her parent through court marriage , and both of them are livi....
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....om delay and latches, and then not persuing them to bring to logical conclusion, does not support the stand of the assessee. On being asked by the Bench, the ld. Counsel for the assessee admitted during the course of hearing that her husband was working for M/s Oven Commerce Private Limited , but was working as a Class IV employee with said company. The Revenue has claimed that the husband of the assessee was working as Manager of Varanasi Branch of M/s Oven Commerce Private Limited, and the said company was engaged in business as corporate insurance agent. The Revenue claim is that this bank account no.031001518299 was opened with ICICI Bank at Varanasi in the name of the assessee, and was operated by husband of the assessee. It is the claim of the Revenue that the assessee was in full knowledge of this bank account. The said account was a salary/agent account in the name of the assessee which was opened on the recommendation/ authentication of Mr. Nikhil Kulshrestha , CCE and Mr. Shailendra Saksena , ABSM(CDA) of Reliance Life Insurance Company Limited (page 42/paper book). The KYC of the said bank account was done by one Mr. Ajay Seth of ICICI Bank(employee no. 30289) on 30.04.2....
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....hil Kulshrestha , CCE and Mr. Shailendra Saksena , ABSM(CDA) of Reliance Life Insurance Company Limited who authenticated the aforesaid ICICI bank account as salary/agent account nor asked department to produce them for their cross examination by her. The assessee never disputed the correctness of the facts recorded in the said ICICI bank account opening form such as her name, address, PAN, date of birth , Mobile number etc, but only contention is that it was fraudulently opened by M/s Oven Commerce Private Limited. The assessee never asked department to record statements of Directors of M/s Oven Commerce Private Limited namely Mr. Surendra Mishra and Mr. Hari Bansh SIngh nor asked departmet to produce them for their cross examination by her . The said bank account was opened on 30.04.2008 and the large number of transactions both by credit as well debits continued until 06.03.2010, which is almost 2 years. We have observed that in these 2 years, apart from transfer by way of debits to M/s Oven Commerce Private , there are various transactions for ATM withdrawal as well withdrawal of cash from the bank through cheque's.It is incomprehensive to believe that ICICI Bank account in the....
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....well getting the address changed in Aadhar Card data base, and thus there was a failure on the part of the assessee to discharge her obligation, for which department cannot be penalized . The department is only obligated to send notices to the address of the assessee's registered with their data base. Moreover, if prejudiced was caused to the assessee due to reassessment order framed against us, the assessee could have come with proper and satisfactory explanation before ld. CIT(A)/remand proceedings conducted by AO , as powers of ld. CIT(A) are co-terminus with the powers of the AO.The assessee herself appeared in person before ld. CIT(A) in first appellate proceedings, along with her counsel. Further, the assessee has only made this bald statement about her strained relations with her parent , due to marrying against their wishes. She never filed any affidavit of her parents with the department, nor asked department to record their statement's as she never produced them before department for their examination and recording of their statements ,to unravel truth. It is a self serving statement of strained relations with parents made by the assessee, in an attempt to get out of tax ....
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....ore tribunal, same address is mentioned by the assessee as her correspondence address. If the assessee was having any circumspection about her parents that they will not hand over to her communications / couriers/speed posts in time , then the assessee would never have given her parent's address in the appellate proceedings. Thus, these contentions of the assessee that she was not in the know of the ICICI Bank account number 03100158299 in her name stands rejected, rather we hold that this bank account was in full knowledge of the assessee, and may be that the said account is opened and operated by her husband in her name to bring in the commission earned from Insurance Business. The stand of the assessee that she did not received notices from the AO during reassessment proceedings, also stand rejected. Similalrly, we hold that ITR's filed for assessment year 2009-10 on 26.02.2011 ,was filed under the instructions of the assessee. The said ITR is supported by audit report. Now, the onus is on the the assessee to substantiate the transactions which were undertaken by the assessee during previous year relevant to the impugned assessment year, and any failure on the part of the assess....
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....re in force at the relevant time , which are reproduced hereunder: "CHAPTER XIV PROCEDURE FOR ASSESSMENT Return of income. 139. [(1) Every person,- (a) being a company [or a firm]; or (b) being a person other than a company [or a firm], if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed : Provided that a person referred to in clause (b), who is not required to furnish a return under this subsection and residing in such area as may be specified by the Board in this behalf by notification in the Official Gazette, and who [during the previous year incurs an expenditure of fifty thousand rupees or more towards consumption of electricity or] at any time during the previous year fulfils any one of the following conditions, namely :- ....
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.... such asset is includible in the income of the person referred to in clause (a) of that proviso in accordance with the provisions of this Act:] [Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year, without giving effect to the provisions of >[clause (38) of section 10 or] section 10A or section 10B or section 10BA or Chapter VI-A exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.] Explanation 1.-For the purposes of this sub-section, the expression "motor vehicle" shall have the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988). Explanation 2.-In this sub-section, "due d....
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....d manner as may be specified in that scheme, and in such case, any employee who has filed a return of his income to his employer shall be deemed to have furnished a return of income under sub-section (1), and the provisions of this Act shall apply accordingly.] [***]] [(1B) Without prejudice to the provisions of sub-section (1), any person, being a company or being a person other than a company, required to furnish a return of income under sub-section (1), may, at his option, on or before the due date, furnish a return of his income for any previous year in accordance with such scheme as may be specified by the Board in this behalf by notification in the Official Gazette and subject to such conditions as may be specified therein, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and in the manner as may be specified in that scheme, and in such case, the return of income furnished under such scheme shall be deemed to be a return furnished under sub-section (1), and the provisions of this Act shall apply accordingly.] [(1C) Notwithstanding anything contained in sub-section (1), the Central G....
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....of section 2, shall, if the total income in respect of which he is assessable as a representative assessee (the total income for this purpose being computed under this Act without giving effect to the provisions of sections 11 and 12) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).]] [(4B) The chief executive officer (whether such chief executive officer is known as Secretary or by any other designation) of every political party shall, if the total income in respect of which the political party is assessable (the total income for this purpose being computed under this Act without giving effect to the provisions of section 13A) exceeds the maximum amount which is not chargeable to income-tax, furnish a return of such income of the previous year in the prescribed form and verified in the prescribed manner and setting forth such other particulars as m....
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....stitution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35, which is not required to furnish return of income or loss under any other provision of this section, shall furnish the return in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).] [(4E) Every business trust, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of its income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply* if it were a return required to be furnished under sub-section (1).] [(4F)Every investment fund referred to in section 115UB, which is not required to furnish return of income or loss under any other provisions of this section, shall furnish the return of income in respect of its income or loss in every previous year and all the provisions of this Act shall, so far as may be, apply as if it were a return required to be furnished under sub-section (1).] [(5) If any pers....
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....resses of his partners, if any, in such business or profession and, if he is a member of an association or body of individuals, the names of the other members of the association or the body of individuals and the extent of the share of the assessee and the shares of all such partners or the members, as the case may be, in the profits of the business or profession and any branches thereof.] (7) [***] [ (8)(a) [Where the return under sub-section (1) or sub-section (2) or sub-section (4) for an assessment year is furnished after the specified date, or is not furnished, then [whether or not the [Assessing] Officer has extended the date for furnishing the return under sub-section (1) or sub-section (2)], the assessee shall be liable to pay simple interest at [fifteen] per cent per annum, reckoned from the day immediately following the specified date to the date of the furnishing of the return or, where no return has been furnished, the date of completion of the assessment under section 144, on the amount of the tax payable on the total income as determined on regular assessment, as reduced by the advance tax, if any, paid, and any tax deducted at source : Prov....
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....cer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the [Assessing] Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return : Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the [Assessing] Officer may condone the delay and treat the return as a valid return. Explanation.-For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :- (a) the annexures, statements an....
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....panied by copies of the audited profit and loss account and balance sheet and the auditor's report 46[and, where an audit of cost accounts of the assessee has been conducted, under section 233B47 of the Companies Act, 1956 (1 of 1956), also the report under that section]; (f) where regular books of account are not maintained by the assessee, the return is accompanied by a statement indicating the amounts of turnover or, as the case may be, gross receipts, gross profit, expenses and net profit of the business or profession and the basis on which such amounts have been computed, and also disclosing the amounts of total sundry debtors, sundry creditors, stock-in-trade and cash balance as at the end of the previous year.] Inquiry before assessment. 142. (1) For the purpose of making an assessment under this Act, the [Assessing] Officer may serve on any person who has made a return [under section 115WD or section 13930[or in whose case the time allowed under sub-section (1) of section 139] for furnishing the return has expired] a notice requiring him, on a date to be therein specified,- [(i) where such person has not made a return [within the time....
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....accountant, as defined in the Explanation below sub-section (2) of section 288, nominated by the [[Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner] in this behalf and to furnish a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the [Assessing] Officer may require : [Provided that the Assessing Officer shall not direct the assessee to get the accounts so audited unless the assessee has been given a reasonable opportunity of being heard>.] (2B) The provisions of sub-section (2A) shall have effect notwithstanding that the accounts of the assessee have been audited under any other law for the time being in force or otherwise. (2C) Every report under sub-section (2A) shall be furnished by the assessee to the [Assessing] Officer within such period as may be specified by the [Assessing] Officer : Provided that the [Assessing] Officer may, [suomotu, or] on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further....
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....hmetical error in the return; [or] (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; The following sub-clauses (iii) to (vi) shall be inserted after sub-clause (ii) of clause (a) of sub-section (1) of section 143 by the Finance Act, 2016, w.e.f. 1-4-2017 : (iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB, 80- IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub-section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode: ....
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.... assessee under clause (c), and where no adjustment has been made under clause (a). (1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme67 for centralised processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section. (1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme67 made under sub-section (1A), the Central Government may, by notification67 in the Official Gazette, direct that any of the provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued after the 31st day of March, 68[2012]. (1C) Every notification issued under sub-section (1B), along with the scheme made under sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament.] 69[(1D) Notwithstanding anything contained in sub-section (1), the processing of a return shall not be necessary, wh....
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....ermine the sum payable by him or refund of any amount due to him on the basis of such assessment:] [Provided that in the case of a- (a) [research association] referred to in clause (21) of section 10; (b) news agency referred to in clause (22B) of section 10; (c) association or institution referred to in clause (23A) of section 10; (d) institution referred to in clause (23B) of section 10; (e) fund or institution referred to in sub-clause (iv) or trust or institution referred to in sub-clause (v) or any university or other educational institution referred to in sub-clause (vi) or any hospital or other medical institution referred to in sub-clause (via) of clause (23C) of section 10, which is required to furnish the return of income under sub-section (4C) of section 139, no order making an assessment of the total income or loss of such 79[research association], news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, shall be made by the Assessing Officer, without giving effect to the provisions of section 10, unless- (i....
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.... to have been paid towards such regular assessment ; (b) if no refund is due on regular assessment or the amount refunded under sub-section (1) exceeds the amount refundable on regular assessment, the whole or the excess amount so refunded shall be deemed to be tax payable by the assessee and the provisions of this Act shall apply accordingly. Best judgment assessment. 144. [(1)] If any person- (a) fails to make the return required [under sub-section (1) of section 139] and has not made a return or a revised return under sub-section (4) or sub-section (5) of that section, or (b) fails to comply with all the terms of a notice issued under sub-section (1) of section 142 [or fails to comply with a direction issued under sub-section (2A) of that section], or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, the [Assessing] Officer, after taking into account all relevant material which the [Assessing] Officer has gathered, [shall, after giving the assessee an oppor-tunity of being heard, make the assessment ] of the total income or loss to the best of his ju....
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....her that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year:] [Provided [also] that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.] Explanation 1.-Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amoun....
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....ssee a notice requiring him to furnish within such period, [* * *] as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be precribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 :] [Provided that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in....
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....person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of [six] years from the end of the relevant assessment year. [Explanation.-For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012.] Sanction for issue of notice 151. (1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 14....
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....hin due date as prescribed u/s 139(1) , then they are allowed to file return of income belatedly within the time prescribed u/s 139(4) . Section 139(4) provides that any person who has not furnished a return within the time allowed to him under sub-section (1), may furnish the return for any previous year at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier . (As amended by Finance Act, 2016 w.e.f. 01.04.2017) Thus, it is true that even if return of income is not filed within the time prescribed u/s 139(1), still the return of income can be filed by the assessee at any before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. Thus, it merely provides that the return of income belatedly can be filed as provided u/s 139(4) and that said return shall not be treated as non-est. but that cannot be stretched to the extent that no best judgment assessment can be framed by AO without issuing notice u/s 143(2) even in such cases where the assessee fails to file return of income in pursuance to notice issued u/s 148, provided all the other conditions as otherwise stip....
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....n 143(1) stipulates processing of return of income filed u/s 139 , or in response to notice issued u/s 142(1), in the manner provided therein. We are presently not concerned with processing of return of income u/s 143(1). Then there is a regular scrutiny assessment conducted by Revenue , wherein return of income furnished by the assessee u/s 139, or in response to notice u/s 142(1) are scrutinized by AO in order to assess and compute total income chargeable to income-tax, if he consider it necessary or expedient to ensure the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax, then the AO is required to issue notice u/s 143(2) requiring assessee to produce evidence to substantiate its return of income. The assessment order is then passed by AO u/s 143(3) wherein total income of the assessee is assessed and computed by the AO and brought to tax. This is the procedure for framing of regular assessment u/s 143(3) read with Section 143(2). Alternatively , there is an another class of assessment which is called best judgment assessments made by the AO u/s 144. Both the assessment framed u/s 143 and 144 are different, albeit the object....
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.... comply with a direction issued under sub-section (2A) of that section], or (c) having made a return, fails to comply with all the terms of a notice issued under subsection (2) of section 143, *** *** *** *** *** *** *** *** All the three clauses are distinguished by word 'or' , i.e. they are mutually exclusive and independent of each other , and these three scenario's are independent of each other , wherein the AO shall be free to make best judgment assessment provided all the stipulated conditions are met. Clearly, the case of the assessee does not fall under clause (c) above of Section 144(1), while it falls under clause (a) and (b) of Section 144(1). The assessee having failed to file return of income in pursuance to notice dated 29.03.2016 issued by AO u/s 148, and Section 148 of the 1961 Act ,inter-alia, stipulating that " the provisions of this Act shall, so far as may be , apply accordingly as if such return were return required to be furnished u/s 139".Thus, failure to file return of income in pursuance to notice u/s 148, will trigger clause (a) to Section 144(1).The AO issued notice dated 02.12.2016 u/s 142(1) asking assessee to furnish retur....
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....ot triggered and then the AO would have been obligated to frame assessment u/s 143(3) read with Section 147, and not best judgment assessment u/s 144 read with Section 147 . If the assessee did not file return of income in response to notice u/s 148 , then the AO will be competent to frame best judgment assessment and no notice u/s 143(2) would have been required. The second situation is clause (b) to Section 144(1), where there was failure on the part of the assessee to comply with the terms of notice issued by the AO u/s 142(1), and hence the AO shall be competent to frame best judgment assessment u/s 144 and no notice u/s 143(2) shall be required. We are seized presently to the situation which falls under clause (a) and (b) of Section 144(1). The third situation envisaged u/s 144(1) clause (c) is the situation where the assessee having filed return of income, fails to comply with all the terms of a notice issued by AO u/s 143(2), then again Section 144 would get triggered and the AO shall be competent to frame best judgment assessment and no further notice u/s 143(2) shall be required to be issued . Had the assessee filed return of income complying with the terms of notice u/s 1....
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....(4) of the Income Tax (Appellate Tribunal) Rules, 1963 ============= Document 1 OFFICE OF THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2, AAYAKAR BHAWAN M.A. ROAD, VARANASI Phone No. 0542-2503351. varanasi [email protected] FM UCIT/C+2/Vas/143/2016-13 13-5 02/19/2016 NOTICE UNDER SECTION 142/11129.OF THE INCOME TAX ACT, 1961. PAN AJMPC1033 SMT. MOUSAMI CHOUDHARY N-11/107 -A Ranipur Mahmoorganj Sadar Varast E-mail shoshisharma.9830gmail.com Mule Furnishing of informatam u/s 1-2 of the In wo (or AX. 2009-10 1. Furnish ropics of Income Tax Retum alongwith prefines and buton. swer AY 2009 10 Date of hearing is lowest 09/12/2016 Ankili Ark g witness ①Sxi Con thatnsh Ranibur , varsaren ओलाठAffixed the notion the adu • RATIPUTA. Sivastav ITI Document 2 PROFORMA FOR OBTAINING APPROVAL OF THE JOINT COMMISSIONER OF INCOME TAX FOR INITIATING PROCEEDINGS U/S 147 OF THE INCOME TAX ACT 1961 ON THE REASONS RECORDED BY THE A.O. 1. Name and Address of the Smt. Mousami Choudhary Assessee 2. PAN/GIR No. 3. Status 4. District ....