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DATE: June 20, 2018 (Date of pronouncement)
DATE: June 23, 2018 (Date of publication)
AY: 2011-12
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CITATION:
S. 139(5): There is no bar / restriction that an assessee cannot file a revised return of income after issuance of notice u/s 143(2). A revised return of income can be filed even in course of the assessment proceedings provided the time limit prescribed u/s 139(5) is available. The Departmental Authorities are not expected to deny assessee’s legitimate claim by raising technical objection

There is no bar / restriction in the provisions of section 139(5) of the Act that the assessee cannot file a revised return of income after issuance of notice under section 143(2) of the Act. It is trite law, the assessee can file a revised return of income even in course of the assessment proceedings, provided, the time limit prescribed under section 139(5) of the Act is available. That being the case, the revised return of income filed by the assessee under section 139(5) of the Act cannot be held as invalid

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DATE: March 28, 2018 (Date of pronouncement)
DATE: June 6, 2018 (Date of publication)
AY: -
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S. 143(3)/ 292C: If the AO wants to rely upon documents found with third parties, the presumption u/s 292C against the assessee is not available. As per the principles of natural justice, the AO has to provide the evidence to the assessee & grant opportunity of cross-examination. Secondary evidences cannot be relied on as if neither the person who prepared the documents nor the witnesses are produced. The violation of natural justice renders the assessment void. The Dept cannot be given a second chance (All judgements considered)

Cross-examination is one part of the principles of natural justice: A Constitution Bench of this Court in State of M.P. v. Chintaman Sadashiva Vaishampayan AIR 1961 SC 1623, held that the rules of natural justice, require that a party must be given the opportunity to adduce all relevant evidence upon which he relies, and further that, the evidence of the opposite party should be taken in his presence, and that he should be given the opportunity of cross-examining the witnesses examined by that party. Not providing the said opportunity to cross-examine witnesses, would violate the principles of natural justice

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DATE: September 8, 2017 (Date of pronouncement)
DATE: September 12, 2017 (Date of publication)
AY: 2010-11
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CITATION:
CBDT guidelines for scrutiny of cases: Law explained as to how the CBDT Guidelines for manual selection of cases for scrutiny have to be interpreted and whether CIT in granting approval is required to show application of mind and give reasons for his decision

The Criteria / Guidelines for Income tax Scrutiny dated 10th September 2011 authorize the Assessing Officer to select any return for scrutiny after recording the reasons and obtaining approval of the CCIT/CIT. The case under the category should be selected if, they are compelling the reasons and the case selected through CASS. These cases should be watched by CCIT / CIT in respect of the quality of assessment. In our view, the requirements of the guidelines have been met by the AO in this case. The term compelling reasons is a relative term and has to be viewed from the point of view of the AO

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DATE: August 29, 2017 (Date of pronouncement)
DATE: September 4, 2017 (Date of publication)
AY: 2009-10 to 2011-12
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CITATION:
Bogus Purchases: If the AO has not disputed the genuineness of sales and the quantitative details and the day to day stock register maintained by the assessee, a trader, he cannot make an addition in respect of peak balance of the bogus purchases. He can only determine the element of profit embedded in the bogus purchases. On facts, the addition is restricted to 2% of the bogus purchase

AO has not disputed the quantitative details and also day to day stock register maintained by the assessee. Assessee company being a trader of goods, AO not having doubted the genuineness of sales, could not have gone ahead and made addition in respect of peak balance on such purchases. Accordingly, CIT(A) concluded that issue boil down to find out the element of profit embedded in bogus purchases which the assessee would have made. When the corresponding sales have not been doubted and the quantitative details of purchases and sales vis-a-vis stock was available, we deem it appropriate considering the entirety of facts and circumstances of the case to restrict the addition to the extent of 2% of such bogus purchase. Accordingly, the order of both the lower authorities are modified and AO is directed to restrict the addition to the extent of 2% on such purchases.

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DATE: July 27, 2017 (Date of pronouncement)
DATE: August 24, 2017 (Date of publication)
AY: 2010-11
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CITATION:
S. 143(2)/ 144C: Though service of the notice is not a condition precedent to conferment of jurisdiction upon the AO to deal with the matter, it is a condition precedent to making of the order of assessment. Accordingly, the s. 143(2) notice has not only to be issued before the expiry of the limitation period but has also to be served upon the assessee before the expiry of the limitation period. Conflict between VRA Cotton Mills (P&H) and Lunar Diamonds 281 ITR 1 (Del) explained in light of CBDT Circular No. 549 dated 31.10.1989

Service under the 1961 Act is not a condition precedent to conferment of jurisdiction in the ITO to deal with the matter but it is a condition precedent to making of the order of assessment. The Hon’ble High Court, in our opinion, lost sight of the distinction and under a wrong basis felt bound by the judgment in Banarsi Devi’s case

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DATE: March 30, 2017 (Date of pronouncement)
DATE: June 30, 2017 (Date of publication)
AY: 2010-11
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CITATION:
Certified copy of Order Sheet: It is the right of every assessee to seek certified copies of entire order sheet of any assessment proceeding on payment of charges. The certified copies have to be handed over forthwith on payment

It is the right of every assessee to seek for the certified copies of entire order sheet of any assessment proceeding. While seeking for such copies even if details have not been provided however since the entire order sheet has been sought for it is open for the authorities to compute whatever is the amount payable for providing such certified copies and issue notice and demand the petitioner to deposit the same. On such deposit the certified copies as entitled shall be handed over forthwith

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DATE: March 30, 2017 (Date of pronouncement)
DATE: June 27, 2017 (Date of publication)
AY: 2004-05
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CITATION:
S. 143(2) notice: If the Department fails to produce evidence relating to the issue and service of the s. 143(2) notice, an adverse inference has to be drawn as per s. 114 of the Evidence Act. The s. 143(3) assessment order has to be held invalid and void ab initio

Once this Tribunal has directed the Revenue to produce the record with regard to the assessment so that it can be verified whether notice under section 143(2) of the Act has been issued and served on the assessee before completing the assessment under section 147/148 of the Act, the Revenue was bound to produce the record. But the Revenue could not produce the record and just explained in the Bar that the record has been misplaced. Under these circumstances, we are bound to take an adverse inference in view of the provisions of section 114 of the Evidence Act to the effect that had the assessment record been produced, the same would have gone against the interest of the Revenue

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DATE: May 18, 2017 (Date of pronouncement)
DATE: May 27, 2017 (Date of publication)
AY: 1998-99, 1999-00, 2001-02
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CITATION:
S. 147/148 reassessment has to be based on "fresh material". A reopening based on reappraisal of existing material is invalid. The assessee's duty is only to disclose facts and not to make inferences. Consolidated Photo 281 ITR 394 (Del) is not good law

The reopening was not based on any fresh material. By revisiting the same materials the successor AO now concluded that the payments received by the Assessee pursuant to the O&M Agreements should be treated as FTS. In the circumstances, the view taken by a successor AO on the same material was indeed nothing but a mere change of opinion. It is a well-settled legal proposition, as explained in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191(SC) that once an Assessee has discharged the burden of not only producing the account books and other documents, but also the specific material relevant to the assessment, “it is for the Income-tax Officer to draw the proper inferences of fact and law therefrom and the Assessee cannot further be called upon to do so for him.” In Indian Oil Corporation v. ITO [1986] 159 ITR 956 the Court pertinently observed “it is for the taxing authority to draw inference. It is not necessary for the Assessee to draw inference.” These observations apply on all fours to the case on hand

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DATE: April 10, 2017 (Date of pronouncement)
DATE: April 22, 2017 (Date of publication)
AY: 2007-08
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CITATION:
Bogus purchases: Merely non-appearance of the supplier in absence of any other corroborate evidence cannot be a basis to justify the stand of the Revenue that the transaction of purchase is bogus

The only grievance of the Assessing Officer is that the assessee has failed to produce the party so as to establish genuineness of the transaction and secondly, no payment has been made to the party till the year end. The ld.CIT(A) while confirming the disallowance has stated that though confirmation has been obtained from the party, however, a simple confirmation is not sufficient to establish the fact of purchase without elaborating what more is required from the assessee to justify its claim

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