TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 137
X X X X Extracts X X X X
X X X X Extracts X X X X
....is bad as the Learned Assessing Officer having proposed to complete assessment ex-parte, ought to have passed the said order only under section 144. 3. As regards additional income of Rs. 1,14,20,100/-: 3.1. The Lower Authorities are not justified in assessing the additional income of Rs. 1,14,20,100/- declared by the Appellant in his return of income merely on the basis of statement recorded without any evidence collected in the course of the said survey. 3.2. The Lower Authorities have erred in levying tax on an additional income offered by the Appellant is in contravention of the Article 265 of the Constitution of India, Instruction F. No. 286/2/2003-IT (INV. II), dated 10.03.2003, Letter [F.No. 286/98/2013-IT (INV.II)], dated 18.12.2014 and Circular No. 14(XL-35), dated 11.04.1955. 4. Without prejudice, as regards levying tax & surcharge by invoking section 115BBE: 4.1. The Learned Assessing Officer's action of invoking section 115BBE when the case of the Appellant was selected for 'Limited Scrutiny', is in defiance of Circular F. No. 225/402/2018/ITA.II, dated 28.11.2018 and hence levying tax & surcharge under section 115BBE is void ab initio and bad in l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the cash in the bank, thereby stepping into the shoes of the Appellant. 5.4. The Lower Authorities, having failed to bring on record any evidence to establish that the cash drawn was used for any other purpose, ought to have accepted the explanation of the appellant that the cash withdrawn was used for making tax payment. 5.5. Without prejudice and assuming without conceding that the statement recorded during the survey under section 133A is reliable, the Lower Authorities are not justified in failing to read the said statement wholly and fully but reading the same to their convenience. 5.6. The Learned Commissioner (Appeals) is not justified in making various observations which are purely his ipse dixit, contradictory, contrary facts and based on only surmises and conjecture. 5.7. The Learned Commissioner (Appeals) has failed to appreciate that having accepted that additional income offered to tax in survey proceeding, the impugned addition is duplicating in nature resulting in taxing the same amount twice over. 5.8. The Lower Authorities have unjustly refused to grant the benefit of telescoping. 6. As regards levy of interest of Rs. 2,97,176/- under section 234A of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Rs. 24 lakhs on 24.11.2016 was taxed as unexplained cash credit u/s. 68 of the Act by invoking provisions of section 115BBE of the Act. 7. Further as survey u/s. 133A was conducted on 27.9.2016, the disclosure made therein of Rs. 1,14,20,100 admitted as undisclosed income under the head income from other sources and assessee has paid only the normal taxes. According to the AO, this amount should have been offered u/s. 115BBE of the Act. 8. Accordingly, assessment order u/s. 143(3) was passed on 17.7.2019 determining the total income of Rs. 2,15,21,882/-. The assessee aggrieved with the above assessment order preferred appeal before the ld. CIT(Appeals). 9. The first issue was with respect to unexplained cash income of Rs. 24 lakhs. The assessee submitted that Rs. 24 lakhs should be part of the additional income already offered of Rs. 1,42,20,100 by giving the benefit of telescoping and no separate addition of Rs. 24 lakhs could have been made. Thus, there is doubly taxed income. The ld. CIT(A) rejected the explanation of the assessee and held that additional income offered by assessee is on the basis of omission and commission in the computation of his income and therefore such....
X X X X Extracts X X X X
X X X X Extracts X X X X
....44 of the Act and further referred to notice dated 10.5.2019 placed at page 154 of PB and notice dated 10.4.2019 placed at page 152 of PB. In the notice dated 10.4.2019 it also stated that in case of failure to furnish the details, the assessment would be completed u/s. 144 of the Act. Further, the notice dated 10.5.2019 placed at page 154 of PB also states to frame the assessment u/s. 144 of the Act. Therefore, the ld. AR submits that passing of the order u/s. 143(3) of the Act by the ld. AO is incorrect. For this proposition, he relied on the decision of the Hon'ble Calcutta High Court in the case of Mohini Debi Malpani v. ITO, 77 ITR 674 (Cal). He submits that in this case, it is held that if in a particular case, the AO had chosen to assume jurisdiction u/s. 144 of the Act or for non-compliance of any of the notices, the best judgment assessment passed by the AO was quashed. Therefore, the corollary argument is that if the AO chooses to pass the assessment order u/s. 144 of the Act for non-compliance by the assessee and the assessee does not comply, the order should have been passed u/s. 144 of the Act only. Thus, the passing of the order u/s. 143(3) of the Act has vitiated the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the assessee was selected for limited scrutiny. He referred to the notice dated 11.8.2018 u/s. 143(2) of the Act which is placed at page 144 of the PB. According to that notice, the case of the assessee was picked up for limited scrutiny only for verification of payment of tax in cash during the demonetization period. He submits that there is no reference to charging of tax u/s. 115BBE of the Act and therefore charging of surcharge and higher rate of tax is devoid of any merit. 17. On Ground No.5 it was submitted that the ld. AO has wrongly taxed Rs. 24 lakhs as undisclosed income. He submits that the provisions of section 68 does not apply to the facts of the case as expenditure is for payment of tax and section 68 does not apply to such transaction. According to him, no such sum as credited in the books of account, but in fact debited for payment of taxes. Even otherwise, he submits that the provisions of section 115BBE could not have been invoked. He also submits that assessee has explained the sources of payment of taxes as bank withdrawal and other receipts. He submits that assessee has available cash withdrawal of Rs 28 lakhs and taxes paid in cash is only Rs 24 Lakhs. Thu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that the assessee has been given 2 opportunities, however no response has been filed. Therefore, a final opportunity was given to the assessee to furnish such details by 18/4/2019. Letter further stated that failure to furnish such details, assessment would be completed ex parte under section 144 on the basis of information available on the records. Further another letter was issued on 10/05/2019 which also states that assessee has been given 2 opportunities which were not complied with and therefore the assessment would be completed under section 144 of the Act. It is the claim of the assessee that assessee submitted its response on 20/05/2019 and thereafter no response was submitted and therefore the assessing officer should have passed the assessment order under section 144 of the Act. 22. Looking to the facts, it is apparent that the notice under section 142 (1) was issued on 17/1/2019, wherein it was asked that the assessee has made large payment of tax in cash during demonetization period and the assessee was asked to furnish the details of payment of tax in cash made during demonetization period with source for the same for verification. As this notice was not complied wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es the manner of investigation and assessment in such cases. 25. We have considered written submission made by the assessee on this ground placed at page number 16 - 57 of the paper books. Facts clearly shows that assessee has on his own disclosed this amount in his ROI by including it in computation of total income under the head ' income from other sources.' Assessee has also deposited due tax thereon. The case of the assessee was selected for limited scrutiny by issue of notice u/s 142 (1) dated 11/8/2018 to examine a solitary issue of examination of payments of tax in cash during demonetization period. It is not the case of the parties that anytime the Limited scrutiny was converted into Complete scrutiny case. Therefore, the ld AO was precluded in examining any other issue other than the issue of ' examination of payment of tax in cash during demonetization period.' Thus, the issue of examination of income disclosed during survey was never an issue for which ROI was picked up for limited scrutiny. Thus, the ld AO was not permitted to look into this aspect at all. This issue has also not been raised by assessee either before the ld AO or before the ld CIT (A), therefore, there....