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TaxTMI 
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2024 (4) TMI 138
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....the sake of convenience and brevity. 3. Brief particulars of all the appeals filed by the assessee and the issue involved in these appeals are mentioned below: (i) ITA No.809/SRT/2023 for AY. 2014-15: In this case, assessment order was passed by the Assessing Officer under section 143(3) r.w.s. 254 of the Act. During the assessment proceedings, the assessee submitted details before the Assessing Officer and assessment was framed u/s 143(3) of the Act. Second inning has already been given by the Tribunal. (ii) ITA No.798/SRT/2023 for AY. 2015-16: In this case, assessment order was passed by the Assessing Officer under section 271F of the Act, imposing penalty on the assessee of Rs. 5,000/-, as the assessee did not file the return of income as per due date prescribed under section 139(1) of the Act. (iii) ITA No.799/SRT/2023 for AY. 2015-16: In this case, assessment order was framed by the Assessing Officer under section 144 of the Act, as the assessee did not file the required details and documents before the Assessing Officer. On appeal, the ld. CIT(A) passed the ex-parte order on merit based on the material available on record. (iv) ITA No.800/SRT/2023 for AY. 2015-16: In....
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....A survey action u/s 133A of the I.T. Act was carried out on 05.03.2014, at the premises of M/s Oum Build Infra which is the proprietor ship concern of the assessee at Vimal Hexagon, P.P. No. 107, T.P. 32, Near Parshurarn Garden, Near C. M. Residency, Honey Park Road, Adajan, Surat. At the time of the survey proceedings, the assessee, Shri Uday Chhasia who was the main partner of the firm and had the key of the office premises. Initially, the assessee did not present himself at the survey premises. After initial conversation on his mobile phone with the survey team he was not reachable on the phone either. Thereafter, a Summons under section 131 of the I.T. Act was also served through affixture at the residential premise during the course of the survey. Thereafter, arrest warrant was got issued in the assessee's name and he was tracked down by the police and was forced to attend the survey proceedings. 7. During the course of survey action u/s 133A of the I.T. Act, 1961, the statement of the assessee was recorded u/s 131 (1A) of the I.T. Act, 1961 on oath on 05.03.2014. In the statement recorded, Shri Uday Chhasia stated in his answer to question No. 3, that, initially the assessee....
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....on'ble ITAT, Surat Bench, Surat. The Hon'ble ITAT Bench, Surat, vide its order in ITA No. 108/SRT/2019, dated: 13.12.2019 directed to provide one more opportunity to consider all the points raised by the assessee, therefore order of CIT(A) was set aside and the case was remitted back to the file of the assessing officer for fresh adjudication. 10. Therefore, in pursuance of the order of the Tribunal in ITA No. 108/SRT/2019, dated: 13.12.2019 (supra), wherein the Tribunal has given second inning to the assessee, hence, the assessing officer issued notice u/s 142(1) r.w.s. 129 of the Act to the assessee on 26.02.2021 requesting him to reply to the notices u/s 142(1) of the Act, in respect of the addition of Rs. 2,50,00,000/-. 11. In response to the notices of the Assessing Officer, the assessee submitted his reply before the Assessing Officer, which is reproduced below: "In response to the notices u/s 142 issued, the AR of the assessee, Shri Mehul Shah has submitted a reply vide letter dated 02.03.2021. The reply of the assessee is reproduced below for the sake of clarity: "1. With regard to the above subject and reference, it is submitted that the assessee maintains th....
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....ovable property for consideration of Rs. 10,78,23,000/- were found during the course of Survey. It was revealed that the IDS @ 1% i.e. Rs. 10,78,230/- was deducted by the appellant but the same was not deposited into the Govt. account. The appellant did not furnish any details in spite of specific query raised by the AO during the course of assessment proceedings. During the assessment proceedings, the appellant has contended that no expenditure in respect of purchase of immovable property has been claimed as deduction and therefore, the question of disallowance u/s 40(a)(ia) of the Act does not arise. On considering overall facts of the case, I find that the AO has invoked provision of Section 40(a)(ia) of the Act for default in depositing IDS deducted u/s 194IA of the Act on consideration paid towards purchase of immovable property. The provisions of Section 40(a)(ia) of the Act applicable for the year under consideration reads as under: "...any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to a resident or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (inclu....
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....nt does not wish to bring any material on record in support of claim made against the addition made by the AO. Under the circumstances, I do not find any reason to interfere with the findings of the AO. Accordingly, this ground of appeal is dismissed. 8. In Ground No.3, the appellant has challenged the addition of Rs. 2,50,00,000/- made by the AO u/s 68 of the Act, while finalizing the assessment in pursuance to order of Hon'ble ITAT, Surat Bench setting aside the original assessment order. During the course of assessment proceedings, the AO noted that the appellant had disclosed, during Survey action, unaccounted income of Rs. 2,50,00,000/- on account of on-money received / receivable. However, the same was not shown in the income tax return filed by the appellant. The appellant submitted that this addition was not based on any incriminating material and by not offering Rs. 2,50,00,000/- in the ROI, it should be presumed that the statement disclosing additional income during the Survey proceeding has been retracted. The AO did not agree with the above contention of the appellant and held that the additional income was disclosed by the appellant on account of on-money receive....
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....the assessee had submitted before the assessing officer that assessee has not offered Rs. 2,50,00,000/- in his Return of Income, and the same should be treated, as if the assessee has retracted his statement. The ld Counsel stated that statement taken during Survey has no evidential value without any corroborative evidence and for this assessee relied on the following judgments: 1. Paul Mathews & Sons v. CIT-263 ITR 101(Ker)(HC) 2. CIT v. S. Khader Khan Son - 300 ITR 157 (Mad)(HC) Moreover, assessee, vide his letter dated 05.07.2018, during the assessment proceedings had requested the assessing officer to provide the copy of statement of the assessee recorded during the survey proceeding and other incrimination material on record on the basis of which addition of Rs. 2,50,00,000/- on account of undisclosed income was made. However, the assessing officer failed to provide the incrimination material to the assessee in connection with the addition of Rs. 2,50,00,000/-. 18. The ld Counsel further submitted that the Assessing Officer made new addition ( in second inning) under section 40(a)(ia) of the Act to the tune of Rs. 10,78,23000/- on account of incrimination material found ....
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....fficer may be confirmed. 22. About returned loss of Rs. 6,47,417/-, the Ld.CIT-DR stated that since the assessee has failed to furnish any explanation before the assessing officer, was well as before the ld CIT(A) therefore addition made by the assessing officer may be confirmed. 23. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that in respect of addition to the tune of Rs. 2,50,00,000/- made by AO under section 68 of the Act, based on the statement of the assessee taken during the survey proceedings, the assessee submitted following written submission before the assessing officer, which at the cost of repetition, are reproduced below for ready reference: "In response to the notices u/s 142 issued, the AR of the assessee, Shri Mehul Shah has submitted a reply vide letter dated 02.03.2021. The reply of the assessee is reproduced below for the sake of clarity: "1. With regard to the above subject and reference, it is submitted tha....
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....o and also shall not retain the books of account for a period not exceeding 15 days. Sec. 133A(3)(iii) enables the authority to record the statement of any person which may be useful for, or relevant to, any proceeding under the Act. Sec. 133A however, enables the IT authority only to record any statement of any person which may be useful, but does not authorize for taking any sworn in statement. On the other hand, we find that such a power to examine a person on oath is specifically conferred on the authorised officer only under s. 132(4) of the IT Act in the course of any search or seizure. Thus, the IT Act, whenever it thought fit and necessary to confer such power to examine a person on oath, the same has been expressly provided whereas s. 133A does not empower any ITO to examine any person on oath. Thus, in contra-distinction to the power under s. 133A, s. 132(4) of the IT Act enables the authorised officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the IT Act. On the other hand, whatever statement recorded under s. 133A of the IT Act is not given any evidentiary value obviously for the reason th....
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....ister oath or to take any sworn statement and that a mere admission or an acquiescence cannot be a foundation for an assessment and that any statement given during a survey has no effect as an "admission" nor can it be a statement on oath. According to the assessee, his statement during the survey with reference to any books of account cart hardly be the basis for any assessment. It was also contended on behalf of the assessee that any material collected or any statement recorded during the survey under section 133A cannot be put against the assessee, as the same has no evidentiary value. The Division Bench of the Kerala High Court, appreciating the stand taken by the assessee and after referring to section 133A of the Act, held as here- under (page 108) : "... we find that such a power to examine a person on oath is specifically conferred on the authorised officer only under section 132(4) of the Income-tax Act in the course of any search or seizure. Thus, the Income-tax Act, whenever it thought fit and necessary to confer such power to examine a person on oath, the same has been expressly provided whereas section 133A does not empower any Income-tax Officer to examine any perso....
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....of search and seizure and survey operations. The said circular dated March 10, 2003, reads as follows: "Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search and seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these circumstances, on confessions during the course of search and seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income-tax Department Similarly, while recording statement during the course of search and seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending, assessment proceedings also, the Assessing Officers should rely upon the evidences/materials gathered during the course-of sear....
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....lected and the statement, obtained under section 133A would not automatically bind upon the assesses we do not see any reason to interfere with the order of the Tribunal. Accordingly, rinding no substantial question of law arises for consideration, the tax case appeal stands dismissed." 27. We note that circular of the Central Board of Direct Taxes (CBDT) dated March 10th, 2003, with regard to the confession of additional income during the course of survey operations, clearly states that confessions during the course of survey operations do not serve any purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed. Similarly, while recording statement during the course of survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely by CBDT. 28. Therefore, we note that in assessee`s case under consideration, the addition was made by the assessing officer based on the statement only, which is not permitted. Therefore, we note that during the survey proceedings no any incriminating ma....
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....e return of income as per due date prescribed under section 139(1) of the Act. On appeal by assessee, the ld CIT(A) passed the ex-parte order confirming the action of the assessing officer. Aggrieved by the order of the ld CIT (A), the assessee is in further appeal before us. 34. Learned Counsel for the assessee submitted that assessee is an individual and filed his return of income on 13th July 2016, declaring income of Rs. 29,06,960/-. The assessee`s case was selected for scrutiny and subsequently assessment order was framed under section 144 of the Act on 22nd December, 2017 by the assessing officer. The assessee filed return of income belatedly and thus made the sufficient compliance. However, assessing officer levied penalty of Rs. 5000/- under section 271F of the Act, which may be deleted, as the assessee filed return of income belatedly and thus made the sufficient compliance. 35. On the other hand, Learned DR for the revenue submitted that the assessee has not filed the original return of income within the time period prescribed under section 139 (1) of the Act, therefore, penalty imposed by the assessing officer should be sustained. 36. We have heard both the parties an....
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....e assessment under section 144 of the Act. The assessee has not filed return of income under section 139(1) of the Act. The assessee also has not filed the return of income in response to notice under section 148 of the Act. On appeal, the ld. CIT(A) decided the appeal, ex-parte based on the material available on record. 39. For the above three appeals of the assessee, namely, ITA No. 799/SRT/2023 for AY. 2015-16, ITA No.800/SRT/2023 for AY. 2015- 16, and ITA No.810/SRT/2023 for AY. 2017-18, the Ld. Counsel for the assessee, argued that during the assessment stage sufficient opportunities were not given to the assessee by issuing more notices of hearings. During the appellate proceedings, before CIT(A), the notices of hearing were not delivered to the assessee, therefore assessee could not appear before the ld CIT (A). Therefore, ld Counsel contended that one more opportunity should be given to the assessee to plead these cases before the lower authorities. 40. On the other hand, ld. DR for the Revenue submitted that assessee was negligent during the assessment proceedings as well as during the appellate proceedings. Therefore, second inning should not be given to the assessee an....