Since assessee had not removed defects/objections within a reasonable period therefrom and had taken more than 6 years to remove defects, memorandum of appeal was rightly rejected being barred by limitation.
Payment of Rs. 24 crores to Group A is to equalize the inequalities in partition of the assets of M/s Hind Samachar Ltd. The amount so paid is immovable property. If such amount is to be treated as income liable to tax, the inequalities would set in as the share of the recipient will diminish to the extent of tax.
We may notice the judgment of Apex Court in CIT v. United Trading & Construction Co., [2001] 247 ITR 819 that there is nothing in Section 24 of the Finance (no. 2) Act which prevents the Income Tax officer, if he is not satisfied with the explanation of the assessee about the genuineness of sources of amounts found credited in his books to add them to the assessee’s income amount in spite of these having already been made the subject matter of the declaration made by the depositors/creditors. This point, thus, also goes against the appellant.
The respondent-assessee, in the present case, had in its return of income tax, claimed deduction under Section 80IA at Rs. 12.01 crores and Section 80HHC of the IT Act at Rs. 5.75 crores and declared the total income of Rs. 82.47 lacs. The AO allowed the deduction under Section 80IA to the tune of Rs. 14.04 crores and deduction under Section 80HHC to the tune of Rs. 2.42 crores.
A plain reading of Section 281B of the Act clearly spells out that the Assessing Officer is empowered to pass order for provisional attachment to protect the interests of the revenue in certain cases during the pendency of any proceeding for the assessment of any income or for the assessment or reassessment of any income which has escaped assessment.
Once there are reasons for the AO to believe, whether such reasons originate out of the record already scrutinized or otherwise, he shall be within his competence to initiate the re-assessment proceedings. The formation of belief by the AO must always be tentative and not a firm or final conclusion as the latter will negate the very object of giving an opportunity of hearing to the assessee as it will amount to post-decisional hearing.
Under Section 220(6) of the Act, where an appeal was pending against the assessment order, the assessee was not to be treated as an assessee in default in respect of the amount in dispute in appeal, in the discretion of the Assessing Officer on such conditions as he may think fit to impose. The Assessing Officer is, thus, required to pass a reasoned speaking order.
Briefly stated, the facts of the case are that during the course of search IVPs of the face value of Rs. 16.20 lacs were found and seized from Locker No. 49 with Oriental Bank of Commerce, Jalandhar. The assessee surrendered income of Rs. 16.20 lacs to cover unexplained investment in IVPs. Such income was also disclosed in the return filed for block assessment. These IVPs can be encashed only on maturity.
The submission of the counsel for the revenue that the Trust was not set up for charitable purposes and it was utilizing its income not for the said purpose cannot be examined at this stage as only objects of the Trust had to be considered by the Commissioner. The Trust was in nascent stage and was yet to work towards its objects.
Learned counsel for the revenue submitted that the assessee had violated the provisions of Section 40A(3) of the Act and therefore the addition of Rs. 60,19,000/- made by the Assessing officer was wrongly deleted by the Tribunal. Relying upon the judgment of this Court in CIT v. SAS Educational Society [2009] 319 ITR 65 (Punj. & Har.), it was submitted that the Tribunal had erroneously accepted the plea of the assessee whereas in view of the express provisions of section 40A(3) of the Act, any amount paid in cash in excess of Rs. 20,000/- was inadmissible.
