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TMI Blog2025 (5) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... ing net profit @ 8% of receipts?" Prayer :- It is, therefore, most humbly prayed that the order of the Ld. CIT (A) dated 10.01.2019 may kindly be set aside and that order dated 15.12.2016 of the Assessing Officer may kindly be restored." 2. The grounds of appeal filed by the assessee in ITA No. 29/Alld/2019 are as under:- "1. Because the CIT(A) has erred in law and on facts in taking the turnover at Rs. 12,54,42,478 instead of Rs. 5,46,10,926. 2. Because the turnover taken by the CIT(A) excessive. 3. Because the CIT(A) has erred in law and on facts in taking the Net Profit Rate of 8% as against the disclosed Net Profit @ 3.31% in the original return. 4. Because the order appealled against is contrary to Law, facts and principles of natural justice." 3. It is observed that the appeal of the assessee is late. In this context, a condonation petition has been filed by Shri. J.N. Chourasia, who is the working partner of the assessee, accompanied by an affidavit. It has been submitted that he received the order dated 10.09.2019 on 11.01.2019 and was ready to come to Allahabad from (Sonebhadra) for the filing of the appeal, but he fell ill in the first week of March and did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extremely abnormal, he asked the assessee to furnish the documentary evidences of contract receipts and also produce the books of accounts. Several opportunities were provided to the assessee but either compliance was not made, or the assessee failed to furnish evidence which showed that the remaining amount of Rs. 7,08,31,552/- were the contract receipts of the assessee. Accordingly, he show-caused the assessee as to why an adverse view may not be taken with regard to these receipts. Subsequently, the assessee filed some description of the receipts from different parties, but the ld. AO observed that they neither contained the details of PAN, father's name, complete address or the copies of accounts. Neither did they reflect the mode of receipt. He also observed that material and consumables details,as claimed, had neither been enclosed nor any bill or voucher been produced. With regard to the payment of labour and wages of Rs. 1,82,26,741/-, the ld. AO perused the register that was produced before him and found that it was a freshly written register, where the thumb impression of various persons matched with each other. He, therefore, observed that the details produced were neit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, which the assessee was bidding for. However, since the qualification criteria with regard to the said tender required a greater turnover, it filed a revised balance-sheet before the NTPC authorities with an exaggerated contractual receipt of Rs. 7,08,31,552/-, thereby disclosing its contractual receipts at Rs. 12,54,42,578/-. However, the income declared in the return continued to be shown as the returned income, in the said tendered documents. The assessee submitted that despite this, when the tender committee insisted for a copy of the income tax return filed before the Income Tax Department, to verify the gross receipt of Rs. 12,54,42,478/-, in order to save the tender and prevent disqualification / forfeiture of its earnest money deposit -- on the advice of its' Chartered Accountant, it filed a revised return, in which the gross receipt was shown at Rs. 12,54,42,478/-,but the returned income was left unchanged. The assessee submitted that the revised return was filed showing turnover of Rs. 12,54,42,478.15/-, only to match with the balance-sheet filed before the NTPC, Vindhyachal and NTPC, Rihandnagar, otherwise the bank guarantee against the EMD would have been forfeited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id letter was a report of AGM (Vig) of NTPC, but it was a departmental issue and did not form part of the assessment order dated 15.12.2016, that had been passed by the ld. AO in the case of the assessee for the A.Y. 2014-15. With regard to the fact of verification of the genuineness of the balance-sheet for F.Ys. 2012-13 and 2013-14 by the NTPC authorities, through the Income Tax Offices at Allahabad and Mirzapur, the ld. AO simply replied that the said report did not outline the methodology adopted by the concerned agency to verify their query with the Income Tax Authorities. Moreover, since no request or correspondence of that agency was available in the assessment records, hence it had no bearing on the orders passed under section 143(3) dated 15.12.2016. 7. On consideration of this remand report, the ld. CIT(A) held that the return of income had been filed by the appellant under his own signature. The ld. AO had mentioned that no request or correspondence was available in the income tax record to show any enquiry being conducted by the NTPC and in any case, the enquiry being conducted by the NTPC, had no bearing on the order passed under section 143(3) of the Act. Thus, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk guarantee of Rs. 13,33,000/- as EMD against the said tender. Subsequently, it had discovered that it did not fulfill the threshold for applying the said tender and was in risk of having its EMD forfeited and being debarred for future bids for a period of three years. Therefore, with the aid of Chartered Accountant, the assessee had prepared a false balance- sheet showing a turnover of Rs. 12,54,42,478.15/- and filed the same before the NTPC. However, a complaint was made by a tender competitor, regarding discrepancy in the turnover of the second balance-sheet to that of the original balance-sheet and therefore, verification letters dated 31.03.2015 and reminder dated 15.04.2015, was issued to the assessee by the tender committee and the assessee was asked to furnish certified copies of the income tax return, to verify the documents. In order to prevent the bank guarantee against the EMD being forfeited and to avoid the ban on the firm, the assessee on the advice of its C.A., filed a revised return on 1.08.2015 on the basis of the 'managed balance-sheet', without knowing its repercussion. The case had been taken up for scrutiny on the basis of this revised return, but in fact no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al return filed by the assessee had been filed on time and also the revised return had been filed within the time limit permitted, there was no basis to accede to the assessee's request. He further pointed out, that it was the assessee who had disclosed these receipts before the Department in the revised return and therefore, it was for the assessee to submit documents in support of his contention that it was a receipt and not income from some undisclosed source. The provisions of the Act were quite clear, that if the assessee failed to prove any credit into the books of accounts to the satisfaction of the ld. AO, the ld. AO was justified in treating those as undisclosed receipts and it was submitted, that in the absence of any evidence, the ld. CIT(A) was unjustified in accepting that the sum of Rs. 7,08,32,552/- were receipts and not the undisclosed income of the assessee. He, therefore, prayed that the order of the ld. CIT(A) may kindly be overruled and the order of the ld. AO restored. 11. We have duly considered the facts and circumstances of the case. At the very outset, it is important to decide the additional ground preferred by the assessee, because it questions the very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat under the first proviso to the newly substituted section 143(1), with effect from June 1, 1999, except as provided in the provision itself, the acknowledgment of the return shall be deemed to be an intimation under section 143(1) where (a) either no sum is payable by the assessee, or (b) no refund is due to him. It is significant that the acknowledgment is not done by any Assessing Officer, but mostly by ministerial staff. Can it be said that any "assessment" is done by them? The reply is an emphatic "no". The intimation under section 143(1)(a) was deemed to be a notice of demand under section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision. Therefore, there being no assessment under section 143(1)(a), the question of change of opinion, as contended, does not arise." 12. Thus, it is quite clear that the order under section 143(1) is not considered to be an assessment, within the meaning of section 139(5), that would prevent an assessee from filing a revised return, after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the NTPC tender. We observe that the ld. AO has failed to take note of the observations made by the NTPC authorities that the assessee was guilty of filing a fake balance-sheet before it, on the grounds that the same had no relevance to the proceedings under section 143(3). However, now that the assessee has confessed before the ld. CIT(A)and before us that it had, in fact, filed a false return for this specific purpose, it is our view that the ld. AO should consider the said report of the NTPC, Vigilance authorities and the findings of the tender committee of the NTPC, before proceeding to hold that the turnover reflected in the second balance-sheet that was filed before the income tax authorities along with the return dated 1.08.2015, represented the true receipts of the assessee or that the balance figure of Rs. 7,08,32,552/- represented undisclosed income of the assessee. The ld. AO should also consider whether this enhanced turnover is in any way reflected in the hands of the assessee which would justify it being treated as the assessee's undisclosed income. In the facts of the case, we feel it is in the interest of justice that the matter be restored to the file of the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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