In our opinion the Scheme of the Act does not authorize the Assessing Officer to make a disallowance according to his wishes, rather it provide that he should first point out the defects in the accounts of the assessee. In the finding extracted (Supra) it nowhere reveals what was the total amount of expenditure claimed by the assessee, which specific vouchers was not in accordance with law. In a just sweeping statement, the ld. AO observed that on verification, some of the expenses were found to be unverifiable, but what were those expenses, he should make out in the assessment order, only then he can disallow them. This is more important when in a row in the last 4-5 years, similar disallowances were made by him but deleted by the ld. CIT (A) as well as ITAT.
In yet another case of Shri Ramchandra D Keluskar in ITA No.668/PN/10, the Pune Bench of this Tribunal found that when there are no books of account, the question of its audit does not arise. Therefore, this Tribunal is of the considered opinion that when the books of account was not maintained and the penalty levied u/s 271A was deleted, this Tribunal is of the considered opinion that there is no justification for levying penalty u/s 271B of the Act for not getting the books of account audited.
Undoubtedly, the RBI Guidelines are Guidelines for the banks, issued for FEMA purposes. Clause 2.3 (supra) of these Guidelines refers to Regulation 10B (2) of the Foreign Exchange Management (Approval or Issue of Security By a Person Resident Outside India) Regulations, 2000. The very opening paragraph of these Guidelines (APB-III) shows that they are addressed to ‘Authorised Dealer (AD) Banks’.
Since the present case did not suffer from non-disclosure or omission to disclose ‘fully and truly’ the facts by the assessee, the Assessing Officer could not have been held, and was rightly not held by the learned Tribunal, to have had the jurisdiction to re-open the assessment and make assessment as in the present case.In the present case all the material facts, which were necessary for making a correct assessment, had been furnished, in the case at hand, to the Assessing Officer and when the Assessing Officer had failed to make correct assessment, the Revenue cannot blame the assessee and take recourse to the proviso to Section 147 for the purpose of re-opening the assessment.
Assessing Officer while making certain additions by restricting 90% of the receipts by applying clause (baa) of Explanation to sec. 80HHC has travelled beyond his jurisdiction and scope of enquiry as directed by the Commissioner of Income Tax (Appeals) because it was not the subject matter of remand proceedings. Since the Assessing Officer was lacking the jurisdiction in the remand proceedings to go into the issue other than directed to be re-examined, the Commissioner of Income Tax (Appeals), in the appeal proceedings against the order giving effect also has no jurisdiction to go into the said issue because under the provisions of sec. 251, the Commissioner of Income Tax (Appeals) can exercise his jurisdiction on the issue on which the Assessing Officer could have exercised but did not do so.
We have heard the rival contentions. and perused the material on record as no controverting material has been brought on record by the revenue as to why the deduction u/s.80-IC be denied to the assessee merely because the auditor in a report u/s.44AB in Col. deduction under Chapter VIIA has observed NIL. This being a technical non-disclosure appropriately was supported by the auditor by claiming deduction u/s.80-IC which he had certified therefore cannot be subjected to denial to the assessee being purely of technical nature. We may as a passing reference also mention that the case law cited regarding refund of excise duty was held in favour of the assessee by the jurisdictional High Court for deduction u/s.80-IC.
It is an admitted position that no notice under Section 143(2) had been issued while making assessment under Section 143(3) read with Section 147. The Apex Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 has held that the Tribunal has discretion to allow or not to allow a new ground to be raised. But in a case where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.
Facts and circumstances of the case suggests that the appellant has adopted a novel way of splitting the consideration with nomenclature of reimbursement of expenses. Deliberate splitting is not possible to be ruled out when splitting is not intended by law. Once splitting is attributable to a motive, the appellant cannot get any shelter under the purview of law.
In the entire scenario, we note that admittedly, a wrong order got issued (as the mistake happened in the hands of Steno) without noticing the facts of the present case, the replacement of said order cannot be considered to be a review of the same. The entire order, which got issued was a mistake inasmuch as the same does not relate to the facts of the present case except that the reference of Appeal No. and impugned order-in-appeal match in the preamble to those in case under consideration making it look as if the present order relates to the appeal of M/s. Paramount Communication.
In case of Ashok Taksali (supra), the Rajasthan High Court came across a similar question. The Bench was of the opinion that once a salary income of the block year has been taxed and such tax has been deducted at source, there is no question of holding that the income of the assessee was undisclosed income of the block period. It was observed as under:-
