TMI Blog2017 (6) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in toto then the said consent cannot be applied as a Doctrine of estoppels against the assessee and the assessee has a legal right to challenge the assessment order before the appellate authority.Therefore the right of the assessee to challenge the order of the assessment is a material legal right, which cannot be denied by applying the Doctrine of Estoppel. The percentage as provided under Section 44AD is certainly has a guidance and persuation value while estimating the income of the assessee which are not falling under the category of small assessees as per the provisions of Section 44AD of the Act. Hence in this case, when the business of the assessee is not in dispute and the turnover of the assessee was also not found to be incorrect or inconsistent with the other record, then the estimation of income has to be made by applying the rate of 8% of the turnover/gross receipt as provided under Section 44AD of the Act. Consequently, the impugned order of the CIT (Appeals) is set aside and the Assessing Officer is directed to compute the income of the assessee @ 8% of the turnover / gross receipts. - Decided partly in favour of assessee. - I.T.A. No.874/Bang/2017 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a FIR, copy of which was submitted before the Assessing Officer. Further the assessee pointed out that the two other accounts, one in Dena Bank and the other in State Bank of Mysore, Bhadravathi were not reported by the Auditor in the earlier audit report that is the reason for total receipt in one bank account was reflected at ₹ 1.22 Crores. Thus the assessee filed a revised profit and loss account and explained that the total turnover of the assessee is matching with the total receipts as reflected in all the three bank accounts. The assessee has also agreed for estimation of income @ 12.5% on gross receipts. However it was requested not to initiate any penalty proceedings as he is agreeing to these additions under unavoidable circumstances. The Assessing Officer accordingly framed the assessment by making the addition on estimated income @ 12.5% on the total turnover including closing stock of ₹ 2,45,500, which comes to ₹ 3.60 Crores. The Assessing Officer has also stated in the assessment order that since the assesseehas furnished inaccurate particulars of income and agreed for certain disallowances therefore penalty proceedings under Section 271(1)(c) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om preferring an appeal and showing to the appellate authority that the sales are in fact not exigible to tax. In case such contention is taken, the appellate authority is under the duty to examine the matter and determine the question whether or not the sales are not exigible to tax. Thus the Hon'ble High Court has held that there is no question of invoking the doctrine of estoppels. Hence the learned Authorised Representative of the assessee has contended that the consent of the assessee for assessment of income on estimate basis was subject to the condition which was not accepted by the Assessing Officer then the said consent cannot be operated as Doctrine of estoppel for challenging the order before the appellate authority. He has further contended that Section 44A provides the estimation of income @ 8% in the cases where the turnover of the assessee is less than ₹ 40 lakhs for the year under consideration however the said provision also provides a guidance for estimation of income in other cases where the turnover is more than the limit provided under the said section. 5. On the other hand, the learned Departmental Representative has submitted that once the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The Assessing Officer accepted the said request of the assessee and accordingly framed the assessment however in the assessment order itself the Assessing Officer has initiated the penalty proceedings in para 5 as under : 5. Penalty Proceedings u/s. 271(1)(c) : Since the assessee has furnished inaccurate particulars for the A.Y. 2009-10 and agreed for certain disallowances out of purchases and expenses, penal proceedings u/s.271(1)(c) is initiated separately. There is no quarrel that the consent of the assessee regarding the estimation of income would not restrict the jurisdiction of the Assessing Officer to frame the assessment on the basis of best judgement. However if the Assessing Officer has accepted the consent of the assessee then such statement of the assessee has to be considered as a whole and not selective. It is manifest from the letter reproduced by the Assessing Officer that the assessee has agreed to the adhoc estimation of income subject to the condition that the Assessing Officer not to initiate any penalty proceedings. The Assessing Officer accepted only one part of the consent of the assessee being adhoc estimation of income but has not accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits to be assessed to tax before the assessing authority, he is not estopped or precluded by any law from preferring an appeal and showing to the appellate authority that the sales are, in fact, not exigible to tax. If such a contention is taken, the appellate authority is under a duty to examine the matter and determine the question whether or not the sales are exigible to tax. There is no question of invoking the doctrine of estoppel. In our opinion, the Deputy Commissioner of Commercial Taxes as also the Tribunal have failed to exercise the jurisdiction vested in them. The second question therefore has to be answered in the affirmative in favour of the assessee. 14. The Revisional Authority was not therefore justified in holding that the order of Appellate Authority was erroneous. Consequently the question whether the order was prejudicial to revenue does not arise. The appeals are therefore allowed. The common order dated 31-1-2001 of the revisional authority is set aside and the order of the appellate authority is restored. Parties to bear their respective costs. Therefore the right of the assessee to challenge the order of the assessment is a material legal rig ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
