TMI Blog2013 (8) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... t found during survey were at variance with the books of account, on the basis of which return of income was filed and which were always available with him - This is case of survey and not search and seizure operation where documents and books of account found are impounded. There is no recourse to impounding of documents/books during the survey. Despite the same, the Assessing Officer gave notice to the assessee time and again to collect the photocopies of the said documents, were not complied with by the assessee, though he claims to have received the said notices belatedly. Such defaulters cannot take shelter under the provisions of non-allowance of opportunity or non-confrontation of the alleged documents – Ground was dismissed – Decided against the Assessee. Completion of assessment under section 143(3) or section 144 of the Act – Held that:- Provisions of section 144(1)(a) of the Act are not applicable to the instant case - Sub-clause (a) of section 144(1) of the Act which are to be applied where the assessee had failed to furnish any return of income. In the facts of the present case the assessee had furnished return of income on 1.3.1993 declaring loss of Rs.15,700/-, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 1992-93 against the order passed u/s 143(3)/147 of the Income Tax Act, 1961 (in short 'the Act'). 2. The grounds of appeal raised by the assessee read as under: I) That the Ld. Commissioner of Income-tax (Appeals) has erred in law as well as in fact in upholding the additions made of Rs.5328809/- i.e. 5332425 - 3616 as taken out in various grounds of appeal from Ground no.4 to 21. II) That the Ld. Commissioner of Income-tax (Appeals) has further erred in law as well as in fact in not adjudicating upon each grounds of appeal taken before detailed as under: 1) That the Order dated 24-3-98 of the Ld. Income-tax Officer, Ward-1, Sirsa is bad in law and required to be quashed since it is without jurisdiction. 2) That the Ld. Income-tax Officer, in view of the facts and circumstances of the case has erred in law in framing the assessment U/s143(3). The facts of the case warranted the assessment, to be completed U/s 144 and not U/s 143(3). 3) That the allegation of the Assessing Officer that the Assessee has been avoiding the service of notice non-cooperating in completing the assessment is totally against the facts. Rather th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. 50-54 7.12.2007 Copy of order of Hon'ble High Court Of Punjab Haryana at Chandigarh -- upheld order of Tribunal -- Hon'ble Supreme Court dismissed SLP filed by the assessee 55-65 SECOND ROUND: AS A RESULT OF ORDER OF CIT(A) DATED 10.10.1995 24.3.1998 Copy of order of assessment u/s 143(3) of the Act, 1961 66-95 2.11.1998 Copy of order of CIT (A) 96-101 29.1.2004 Copy of order of Hon'ble Tribunal -- dismissing the appeal in limine 102 4. The Tribunal thereafter recalled the order dated 29.1.2004 vide order passed in MA No.7/Chandi/2007 - order dated 4.9.2009 and posted the appeal for hearing afresh. The present appeal is consequently fixed for hearing. The learned A.R. for the assessee at the outset pointed out that ground No. I raised in the present appeal is general in nature. Thus, ground No. I is dismissed. 5. The next plea of the learned A.R. for the assessee that ground No.II(1) against the jurisdiction of the Assessing Officer in passing the order is not pressed in view of the issue being decided by the Hon'ble Supreme Court in assessee's own case. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e already in possession of the assessee and there was no merit in the present plea of the assessee. 10. We proceed to adjudicate the ground No.II(2) and II(3) raised by the assessee as the two are interrelated. Survey operations were carried out at the business premises of the assessee on 3.2.1992 under section 133A of the Act. During the course of survey four documents/books marked as D-1 and D-4 were found and identified and copies of all the documents were taken in custody by the survey team. The case of the assessee was fixed on various dates of hearing between 14.6.1993 to 10.3.1995 but the assessee failed to cooperate and assessment was made by the Assessing Officer observing as under: " It is abundantly clear that the assessee is in no mood to co-operative with the department and the reasons for the same are not far to seek. With the impounding of parallel set of account books (copies duly signed by the assessee) by the deptt. And then issuing of detailed notices pointing out various discrepancies requiring clarification and evidence on various issues, being unable to file any satisfactory reply, the assessee has chosen this way of non-co-operation with the deptt. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... photocopies of the documents the Assessing Officer vide office letter dated 23.9.1997 informed the assessee that the same could be obtained on any working day between 10 am to 5 pm upto 30.10.1997. The said letter could not be served through process server or Inspector of the Income Tax at the given address of the assessee and the notice was again sent through registered post to the address of the assessee at both Sirsa and Delhi. As the assessee failed to appear, another notice was sent vide registered post on 6.11.1997 and another questionnaire dated 27.2.1998 was issued to the assessee. The assessee was also given one more opportunity to take the photocopies immediately required by it and the case was fixed for hearing on 10.3.1998. However, the assessee failed to appear on any of the dates and no communication whatsoever was received from the assessee. Despite non-cooperative attitude of the assessee, another opportunity was allowed to the assessee and notices under section 142(1)/143(2 of the Act were issued to the assessee on 11.3.1998, which were sent by registered post to Sirsa address of the assessee. The assessee was also show caused that in case he did not attend the off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.30,05,592/- was made under section 68 of the Act. Another addition was made of Rs.85,604/- and further additions were made on account of various entries in the second set of books of account and documents seized during the course of survey totaling Rs.22,41,229/-. The Assessing Officer has tabulated various lists of additions made and had annexed the annexures to the assessment order. 14. The CIT (Appeals) noted that during the course of survey proceedings conducted at the business premises of the assessee on 3.2.1992 a cash book marked D1 relating to the period 1.4.91 to 1.2.92, Ledgers marked D2 and D3 and Loose papers marked D4 were found on which marks of identification were put by the departmental Officers conducting the survey. Photocopies of these documents were obtained from the appellant and on comparison with the regular books of account, it was found that the appellant had been making investments, advancing loans and incurring the expenses etc. which were not found recorded in the regular books. The assessee had furnished return of loss declaring net loss of Rs.15,700/- against which assessment was completed under section 143(3) of the Act at Rs.43,16,730/-. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... again, on one flimsy pretext of the other. The appellant was specifically informed by me, that if the benefit of telescoping was being claimed by him in respect of the peak investments, then onus for proving the nexus and giving the calculations lay squarely upon him. However, in the brief general submissions made on 18.9.98, no concrete explanation was forth coming from the Appellant. I have carefully perused the impugned order and find that it suffers from no infirmity which would need interference at my hand."(underline provided by us) 16. The assessee is in appeal against the above said orders of both the Assessing Officer and the CIT (Appeals) alleging that the Assessing Officer had failed to supply the copies of the papers/documents to the assessee and also completed the assessment under section 143(3) of the Act as against under section 144 of the Act. 17. In the totality of the facts and circumstances as noted by us in the paras hereinabove, it is purely a case where the assessee had tried to find one excuse or the other for not complying with the notices/show cause notice/explanation sought by the authorities below. The plea of the assessee that the assessment was comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely: (a) the total income or loss shall be computed after making the following adjustments, namely: (i) any arithmetical error in the return; or (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (b) the tax and interest, if any, shall be computed on the basis of the total income computed under clause (a); (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax and interest, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under an agreement under section 90 or section 90A, or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest; (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall, (i) where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim: Provided that no notice under this clause shall be served on the assessee on or after the 1st day of June, 2003; (ii) notwithstanding anything contained in clause (i), if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support of the return: Provided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed authority the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, as the case may be, by such scientific research association, news agency, association or institution or fund or trust or university or other educational institution or any hospital or other medical institution, where in his view such contravention has taken place; and (ii) the approval granted to such scientific research association or other association or fund or trust or institution or university or other educational institution or hospital or other medical institution has been withdrawn or notification issued in respect of such news agency or fund or trust or institution has been rescinded : Provided further that where the Assessing Officer is satisfied that the activities of the university, college or other institution referred to in clause (ii) and clause (iii) of sub-section (1) of section 35 are not being carried out in accordance with all or any of the conditions subject to which such university, college or other institution was approve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction. (2) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year.' 21. Under the provisions of section 143 of the Act where the person has furnished return of income either under section 139 or in response to notice under section 142(1) of the Act, sub-section (1) to section 143 of the Act provides the processing of the said return and issue of intimation to the assessee in the given circumstances. Under sub-section (2) to section 143 of the Act, the Assessing Officer is empowered to issue notice to the assessee to produce any evidence or particulars specified therein for the assessee to justify its claim of loss, exemption, deduction, allowance or relief. Such notice is to be issued where the Assessing Officer has reason to belief that any claim of los ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 142(1) or the directions issued under section 142(2A) of the Act; (c) Where the person after filing the return of income, fails to comply with all the terms of a notice issued under section 143(2) of the Act. 23. The reading of the above said sections 143 and 144 of the Act reflects the manner in which the Assessing Officer is to proceed for completing the assessment in the hands of the assessee. The provisions in respect of notice/s to be issued and the assessment order to be passed in the case are all provided under sections143 and 144 of the Act. Under the provisions of section 143(3) of the Act, the Assessing Officer is empowered to pass the assessment order after hearing such evidence as produced by the assessee and after taking into account such particulars as the assessee may produce or such other evidence as the Assessing Officer may require on specific point. The Assessing Officer thus while framing the assessment under section 143(3) of the Act has to consider the particulars of the income produced by the assessee and also take into consideration any other evidence/particulars which the assessee may produce during the course of assessment proceedings. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer by passing an order under the provisions of section 144 of the Act and not under section 143(3) of the Act. Recourse is made to the provisions of section 292B of the Act wherein it has been clearly provided that no return of income, assessment, notice, summons or other proceedings furnished to be made or issued or purported to have been furnished, made or issued, in pursuance to any of the provisions of this Act, shall be invalid or deemed to be invalid, merely because of the reason of any mistake or defect or admission in such return of income, assessment, notice, summons or other proceedings where the return of income, assessment, notice, summons or other proceedings are in substance and effect in conformity with or according to the intent and purpose of this Act. 26. The assessment proceedings being completed under section 143(3) of the Act and not under section 144 of the Act in view of the provisions of section 292B of the Act could not be invalidated. 27. Further as provided under section 144 of the Act by way of 2nd proviso where notice under section 142(1) of the Act had been issued prior to making an assessment under section 144 of the Act, it was not necessary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el set of accounts and various documents found during the course of survey. 29. The CIT (Appeals) in the first round of proceedings vide order dated 10.10.1995 had set aside the assessment made by the Assessing Officer to be made again after providing adequate opportunity of hearing to the assessee to represent his case and also to supply copies of the documents where necessary. The present appeal before us is against the second round of assessment proceedings as a result of order of CIT (Appeals) dated 10.10.1995. When the assessment proceedings were taken up by the Assessing Officer, notice was issued under section 143(2) of the Act for 6.8.1996. In reply the assessee stated that he was filing his return of income at New Delhi and he has preferred an appeal before the Tribunal as the issue of jurisdiction was not decided by the CIT (Appeals). Further plea of the assessee was that it had requested for supply of the copies of the material and transfer of his case to Delhi. The Assessing Officer noted that vide office letter dated 23.9.1997, the assessee was informed by his predecessor the issue of jurisdiction in detail. Regarding supply of photo copies of documents, it was told ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee by making the total addition of Rs.53,32,425/-. The said assessment being completed in the hands of the assessee was pursuant to the directions of the CIT (Appeals) in the second round of assessment proceedings where certain information was collected by the Assessing Officer by way of survey and reconciliation was worked out in the hands of the assessee vis- -vis regular books of account maintained by the assessee and discrepancy was found to the effect that the entries in the said documents and parallel set of books of account was not reflected in the regular books of account maintained by the assessee. In the above said circumstances where certain investigation was being made by the Assessing Officer and thereafter the income of the assessee was determined on the basis of the aforesaid documents, the said assessment being completed under section 143(3) of the Act is validly made. 30. Now coming to the provisions of section 144 of the Act, admittedly it is not the case of sub-clause (a) of section 144(1) of the Act which are to be applied where the assessee had failed to furnish any return of income. In the facts of the present case the assessee had furnished return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in support of the merits of the case. As referred to by us in the paras hereinabove, the aforesaid addition of Rs.53,32,425/- has been made in the hands of the assessee on account of various entries in the parallel set of accounts and documents marked as D-1 to D-4 found during the course of survey. The assessee has failed to controvert the findings of the Assessing Officer in this regard and has even failed to bring on record any evidence explaining or justifying its stand as to why the said addition should not be made in the hands of the assessee, except the plea of peak investment in support of which no calculation has been filed. The assessee has failed to discharge the onus cast upon him. The Assessing Officer has elaborately considered various documents/books found during the course of survey and made the respective addition by way of the discussion in the various paras of the assessment order, totaling Rs.53,32,425/-. In the absence of any evidence to the contrary we uphold the order of the Assessing Officer, which in turn has been confirmed by the CIT (Appeals) on merits. We find no merits in the issue raised by the assessee of calculation of peak investment/credit base ..... X X X X Extracts X X X X X X X X Extracts X X X X
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