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2014 Supreme(Mad) 3947
High Court of Judicature at Madras
R. SUDHAKAR & R. KARUPPIAH, JJ.
B. Kishore Kumar
Versus
The Deputy Commissioner of Income Tax, Central Circle – IV(1), Chennai
T.C.(A). Nos. 738 to 744 of 2014
Decided on: 03-11-2014
For the Appellant:B. Ramana Kumar, Advocate.
For the Respondent:T.R. Senthil Kumar, Advocate.
The importance of the assessee's admission of undisclosed income and its evidentiary value in the assessment process.
Headnote:
Income Tax - Assessment of Undisclosed Income - Section 153A, Section 153C - Summary of Acts and Sections: Income Tax Act, 1961 - Section 153A, Section 153C - The court discussed the assessment of undisclosed income under Section 153A and Section 153C of the Income Tax Act, 1961. The court emphasized the importance of the assessee's admission of undisclosed income and upheld the assessment based on the admission and supporting evidence.
Fact of the Case:
A search was conducted at the premises of the appellant's father, leading to the discovery of notings on telephone diaries pertaining to the assessee. Subsequently, the appellant's returns were revised, and the assessment was completed by the Assessing Officer based on the admission made by the assessee during the time of search and the records seized.
Finding of the Court:
The court found that the assessment was based on the assessee's own sworn statements and admitted documents, and upheld the assessment of undisclosed income based on the clear and categoric admission made by the assessee.
Issues: The main issues revolved around the assessment of undisclosed income and the consideration of materials submitted by the assessee.
Ratio Decidendi: The court emphasized the importance of the assessee's admission of undisclosed income and upheld the assessment based on the admission and supporting evidence.
Final Decision: The court dismissed the appeals and upheld the assessment of undisclosed income. No costs were awarded.
R. Sudhakar, J.
1. The assessee has filed these appeals challenging the order of the Income Tax Appellate Tribunal 'C' Bench, Chennai, dated 5.6.2014 made in I.T.A.Nos.640 to 646/Mds/2014 for the assessment years 2001-2002 to 2007-2008, by raising the following substantial questions of law:
i. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in dismissing the appeals and not allowing the matter to be remanded to the respondent when the additions made by him in the appellant's case for the relevant assessment years arise out of a mere assumption?
ii. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in dismissing the appeal when there has been a clear insufficiency of time in providing reasonable opportunity to the appellant while completing the assessment under Section 153A read with Section 153C of the Income Tax Act?
iii. Whether the Tribunal having come to the conclusion that the assessment orders were passed at the fag end of the year without looking into the search materials, ought to have remitted the case to the assessing officer rather than adjudicating the case on merits?
2.1. The brief facts of the case are as under: On 29.8.2006, a search was conducted at the premises of the appellant's father, wherein loose sheets and notings on telephone diaries pertaining to the assessee were found by the department.
2.2. On 27.8.2008, notice under Section 153A read with Section 153C of the Income Tax Act, 1961 (for brevity, “the Act”) was issued to the appellant for the assessment years 2001-2002 to 2007-2008, namely, for seven years. In response to these notices, on 14.10.2008, the appellant requested the department to treat the original returns filed by him as his returns in response to the notices issued under Section 153A read with Section 153 of the Act. Thereafter, on 12.11.2008, the assessee filed revised returns for the assessment year 2001-2002 and for the assessment years 2002-2003 to 2007-2008, the assessee filed revised returns on 16.12.2008.
2.3. Pursuant to the same, the assessment under Section 143(3) read with Section 153A and 153C of the Act was completed by the Assessing Officer based on admission made by the assessee during the time of search and the records seized. The request of the assessee to consider his objections was overturned by the Assessing Officer saying that the materials submitted at the fag end of the assessment could not be scrutinized, as the notings in telephone diaries and loose sheets are unstructured and spread over without reference to time-frame. The Assessing Officer was of the view that the assessment could be completed based on the admission of the assessee in the sworn statements made on 29.8.2006 and 10.10.2006. The Assessing Officer came to the conclusion that there is admission of undisclosed income to the tune of Rs.52,73,920/- and on the basis of the documents and statements, he came to the conclusion that further addition of Rs.30,00,000/- should be made. Therefore, the total extent of undisclosed income was determined at Rs.87,08,136/- and penalty proceedings were also initiated separately.
2.4. Aggrieved by the assessment orders, the assessee preferred appeals before the Commissioner of Income Tax (Appeals), who dismissed the appeals.
2.5. Assailing the said orders, the assessee went on appeal before the Tribunal, which dismissed the appeals upholding the orders passed by the authorities below.
2.6. Calling into question the said order, the present appeals are filed by the assessee on the questions of law, referred supra.
3. Heard Mr.B.Ramana Kumar, learned counsel for the assessee and Mr.T.R.Senthil Kumar, learned Standing Counsel appearing for the department and perused the documents filed in support of these appeals.
4. The main grievance of the assessee is that the Tribunal has not considered his plea that the Assessing Officer has not scrutinized the materials submitted before him
