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| DATE: | (Date of pronouncement) |
| DATE: | July 20, 2012 (Date of publication) |
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| Click here to download the judgement (sushila_AO_costs_harassment_assessee.pdf) |
AO hauled up for repeatedly disregarding ITAT’s directions & directed to pay costs
Pursuant to a search u/s 132, the assessee’s statement was recorded u/s 132(4) in which he offered Rs. 1.50 crores as undisclosed income. This was modified/ retracted subsequently by stating that the admission was only to the extent of the evidence found during the course of search operation. Despite the retraction, the AO passed a s. 158BC assessment order in which he determined the total undisclosed income at Rs. 1.50 crores. In the first round of appeal, the Tribunal remanded the matter to the AO to make a fresh assessment on the basis of the evidence found in the search and not only on the basis of the retracted/ modified statement. The AO passed a fresh assessment order in which he again determined the total undisclosed income at Rs. 1.50 crores on the basis of the s. 132(4) statement. In the second round, the Tribunal again remanded the matter back to the AO for framing a fresh assessment after imposing costs of Rs. 5000 upon the AO. The AO once again repeated the conclusions drawn in the earlier orders and determined the income at the same figure of Rs. 1.50 crores on the basis of the s. 132(4) statement. HELD by the Tribunal in the third round:
(i) It is very sad that the AO without following the principles of natural justice and inspite of clear findings of the ITAT in the order dated 18.06.2010 has repeated the same orders as was done originally way back in 1998. Inspite of levying cost of Rs. 5000 on AO there is no change in the attitude of the Revenue with reference to the assessee. By taking up the assessment at the fag end of the time barring period and by denying natural justice and not considering the evidence on record, the assessee was forced to file appeals before the ITAT unnecessarily by incurring heavy cost of not only appeal fees but also engaging Counsels to defend the case. There should be an end to this sorry state of affairs;
(ii) The matter is again remanded to the AO to complete the assessment only on the basis of incriminating material, if any, and not only on the basis of the s. 132(4) statement. If the AO repeats the same order without examining the material on record, the order will be quashed without any further consideration. The AO should pay costs of Rs. 35,000 (20,000 + 15,000) to the assessee for making him come again in appellate proceedings. The Revenue shall decide whether these amounts should be recovered from the officer(s) concerned. As the orders are being approved by a senior officer in the rank of CIT, it is sincerely hoped that the CIT also monitors these assessments and applies his mind while granting the approvals.
Finally, someone has the confidence and the courage to hold the officers accountable. Its a welcome precedence and I hope more such orders would follow.
It’s a great job done by the ITAT. Mumbai Bench.
At least in this case the true nature of the ITAT reveals, and it should in the interest of the assessee.
Though the judgement of the ITAT,Mumbai is a welcome, the ITAT also should have analysed the circumstances under the which the AO has to pass the Order. Mainly, the Order is passed based on the Appraisal Report received
from the Inv.wing who had conducted the Search. Any deviation from the appraisal report, the AOs r taken for task.
The assessee’s always declare U/s.132(4) based on the materials found in their premises. To retract a later stage is an afterthought which should have been dealt with.
well the ASSesee always retracts after survey and most of them conceal income and stock ,the law is loopsided and loaded in fav of assessee.the statemnt should non retractable like 164 CRPC,