TMI Blog2024 (2) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... object, stating that the said document is a separate document, titled Intimation letter for order u/s. 143(3) of the Income Tax Act , we find it as without merit and, rather, appears to have been made without reading the said document, whereby the assessee is informed of being conveyed the order u/s. 143(3) dated 30.11.2021, issued earlier, electronically, i.e., after completion of accounting by CPC. There is no dispute that both the assesssment order and the Intimation were uploaded on 30/11/2021. That apart, notice of demand u/s. 156 of the Act dated 30.11.2021, manually signed, as is the assessment order, forms part of the appeal file itself. This is in complete conformity with the Board Circular supra. What, then, is the assessee s grievance? Rather, the Intimation and the order being displayed on the Revenue s portal, the objection is not only invalid but also unfortunate.The assessee s appeal for AY 2015-16 is accordingly dismissed. Assessment order has not been signed, either physically or digitally, by the AO - AY: 2016-17 - HELD THAT:- Sec. 282A(2) provides that if the name and office of the designated income tax authority is printed, stamped or otherwise written on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corroborating material, so that the lower of the two rates, i.e., 5%, as admitted, could have been applied for all the years. Be that as it may, it is not so constrained for the current year, for which the assessment is u/s. 143(3) of the Act. The assessee returning income at Rs. 98,70,252, the AO has accepted the same. The same is consistent with the estimated turnover of Rs. 20 crores, yielding a profit rate of less than 5%. Appellant was in this regard specifically questioned by the Bench about the turnover per the software for f.y. 2018-19, i.e., the previous year relevant to AY 2019-20, and to which he replied as being not available. There is, in this view of the matter, no scope, factually and, therefore, legally; the ld. CIT(A) emphasizing the latter, for any reduction therein. That is, the assessee stands rightly assessed. As we have dwelled on the facts of the case as we are, in confirming the assessed income, not in agreement with the ld. CIT(A). There is no law that the assessed income, a product of the law as applied to the facts of a case, cannot be lower than the returned income. Rather, it is only where an assessment fails, that the assessee may not be able to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is statement, the whole of which though stands perused, is as under: Q. 23 As per the Income Tax Return filed for the AYs. 18-19 and preceding five years you have declared sales turnover below One Crore and filed such return of income by applying section 44AD of the Income Tax Act, 1961. However as stated herein above by you, you have not declared in the various income tax returns 15% of actual daily sales turnover and as stated above for the period 1.10.19 to 15.10.19 you have prepared tax invoices for 5% of sales turnover only. Moreover, for example, during the month of September, 19 your sales turnover as per the daily sales Reports is Rs. 1,76,15,969/-. Even for 15 days from 1.10.19 to 15.10.19, your sales as per Daily Sales report is Rs. 1,05,37,600/-. Your explanation in this regard? Ans: We admit that we have suppressed sales by showing meagre portion of sales turnover as stated above while filing Return of Income. Under these circumstances and considering the fact that we have suppressed our actual sales and we have not maintained any books of accounts for any AYs we hereby declare sales turnover for the following assessment years and offer 5% of sales turnover as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , i.e., as per the Goldest data base, i.e., at Rs. 31,96,280. In appeal, the assessee furnished an affidavit dated 21/6/2022 by it s counsel, Shri Jyothison, common for all the years, whereby he avers the assessee to have accepted the turnover and agreeing to be assessed at a net profit rate of 2%. The same was accepted by the ld. CIT(A). The tabular chart forming part of the said affidavit, is as under; the turnover figures, as opposed to that admitted during survey, as per the assessee s software: Sl. No. Asst. Year Turnover (in Rs. ) Profit (in Rs. ) 1 2013-14 10,01,46,473/- 20,02,930/- 2 2015-16 10,65,42,683/- 21,30,854/- 3 2016-17 11,58,20,978/- 23,16,420/- 4 2017-18 13,16,87,347/- 26,33,747/- 5 2018-19 14,59,39,741/- 29,18,795/- 6 2019-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... physically or digitally, by the AO. Authentication of a document being a necessary condition for its validity, even as explained in Kilasho Devi Burman v. CIT [1996] 219 ITR 214 (SC), the assessment record, called for, was examined to find a physically signed copy of the assessment order by one, Deeptha M.S., Dy. CIT, International Taxation Circle, Thiruvananhapuram, the extant AO. As explained through her written submissions dated 16.11.2023 by Smt. Devi, also enclosing along with a copy of a letter of even date by the incumbent AO, C.M. Premeela, Asst. CIT (International Taxation) Circle, Thiruvananthapuram, that due to technical problems that at times arise, digital signatures would not work. It is usual under such circumstances to pull out the order from the ITPA and manually sign the same, also clarifying that only the body of the order is entered and all other fields therein are filled by the system itself, viz., Date, PAN, DIN, etc., so that no manipulation, much less antedating, is possible. To further buttress the point, copy of the notices u/s. 274 r/w ss. 271A and 271B of the Act, both dated 30.11.2021, digitally signed at 5:07 pm and 5:09 pm, as well as their being upl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of r. 127A have not been complied with; the Revenue stating of both uploading as well as transmission through email ID on the date of passing the assessment order, and which aspect is not in dispute. The assessee has, in view of the foregoing, no case. He not pressing any other ground, his appeal for AY 2016-17 is dismissed as without merit. 6. AY: 2019-20: 6.1 No document for this year, however, stands adduced before us, and which explains our making a separate mention for this year. The assessment order in the appeal file, as indeed in the assessment folder called for from the Revenue, bears only the name and designation of the extant Assessing Officer, both printed thereon. That would fulfil the condition of s. 282A where the procedure of r. 127A is complied with; both provisions, as afore-explained, being required to be read together. It is not the assessee s case that the condition/s of r. 127A is not complied with; the Revenue stating of both uploading as well as transmission through email ID, on the date of passing the assessment order, i.e., 30/9/2021, an aspect not in dispute before us. In view of deemed authentication, there is no question of applicability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted due to his residential status, that is a different matter altogether. The returns, in our view, were valid; the only debility being that the assessee could not, availing s. 44AD, avoid scrutiny thereof. Why, the turnover, found to be far in excess of the prescribed limit, in any case ousts the assessee s case for availing the summary procedure u/s. 44AD. What we seek to emphasize is the evidentiary value of the said return/s, a legal document bearing his verification. Admission, as explained in Pullangode Rubber Produce Co. Ltd. vs. State of Kerala [1963] 91 ITR 18 (SC), is an extremely important piece of evidence (Bhagirath Aggarwal v. CIT [2013] 351 ITR 143 (Ker)). That apart, Shri Shukoor, the person managing the business and, further, looking after both it s purchases and sales (refer answer to Q.4), per his statement dated 15/ 16.10.2019, admits to disclosing sales at, on an average, 85% of the actual sales and, on being confronted with evidence as to sale suppression (for the period 1/10/2019 to 15/10/2019) found during survey, at only 60% thereof (which he ascribes to a mistake ), which he could not though corroborate. And, further, of a profit rate of 5% on turnove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purview in the matter is with regard to adoption of correct profit rate in the assessee s case, i.e., for AY 2019- 20; there being no dispute in its respect for the preceding years. Here it may also be relevant to clarify that for years prior to AY 2019-20, the Revenue was, in the absence of the assessee returning income u/s. 148, constrained to assess the income u/s. 144 of the Act, which obliged the AO to gather material and confront the same to him. That is, the Act throws the burden for making an informed estimate of the assessee s income for the relevant year/s on the AO. Though the returns voluntarily filed earlier, disclosing profit at 8%, disregarded due to the assessee being a non-resident, could validly be regarded as evidence, the Revenue has not done so. The Board requiring the assessments to be evidence-based, rather than on the basis of the statements, unless corroborated, the Revenue has proceeded on the basis of the reported profit of other firms in the business. It has failed to appreciate that all the returns, filed earlier by the assessee voluntarily, returning profit at 8%, is corroborating material, so that the lower of the two rates, i.e., 5%, as admitted, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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