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.
CIT Vs. Surya Educational & Charitable Trust (P&H HC) – Section 10(23C) of the Act are the provisions of the Act in substitution of the earlier provisions of Section 10(22) of the Act as to which income shall not be included in computing the total income of any person. Therefore, the provisions of Sections 11, 12 or Section 10(23C) of the Act, deal with the income of a Trust or of the Institution and the circumstances as to when such income is to be excluded for computing the total income, but the basis of such benefit is the registration under Section 12AA of the Act.
The issue of certificate under Sub-section (1) of Section 197 of the Act is mandatory on fulfilment of conditions enumerated under the rules. For determining the existing and estimated liability of the assessee where tax deduction is from income other than dividends, the Assessing Officer is to be guided by Sub-rule (2) of Rule 28AA of the Rules.
In the instant case, the ITO(TDS) while going through the quarterly return in Form No.26Q, filed by the assessee noted that it has omitted to quote PAN/had quoted invalid PAN in 196 cases. As regards the reasonable cause,it was pleaded on behalf of the assessee that TDS was deducted and deposited in time in government Treasury. The default is only with regard to the wrong quoting of PAN of 196 of the deductees, such deductees quoted wrong PAN.
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.
In order to assess individuals to be forming association of persons, the individual co-owners should have joined their resources and thereafter acquired property in the name of association of persons and the property should have been commonly managed, only then it could be assessed in the hands of associations of persons. Conversely, the mere accruing of income jointly to more persons than one would not constitute thereon an association of persons in respect of such income.
