ACIT, Trichy V. P.Murugesan, Thanjavur

ITA 1212/CHNY/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57861 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 27-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G BASKAR
• Assessee Lawyers: R B NAIK
• Keywords: Unexplained cash credit; Charitable institution; Additional evidence; Reasonable cause; Notional interest
• Section: 142(1); 153A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NOS.965, 966 & 967/MDS/2011 I.T.A. NOS.1062, 1063, 1064 & 1065/MDS/2011 (ASSESSMENT YEARS : 2001-02 TO 2006-07) & C.O. NOS.126, 127, 128, 129, 130, 131 & 132/MDS/201 2 (IN I.T.A. NOS. 1209, 1210, 1211, 1212, 1213, 1214 & 1215/MDS/2011) (ASSESSMENT YEARS : 2001-02 TO 2007-08) SHRI P. MURUGESAN, NO.35/36, II STREET, NATARAJAPURAM, NORTH COLONY, THANJAVUR 613 004. PAN : AGCPM7443H (APPELLANT & CROSS OBJECTOR) V. THE ASSISTANT COMMISSISONER OF INCOME TAX, CENTRAL CIRCLE II, TIRUCHIRAPPALLI. (RESPONDENT) I.T.A. NOS.1209, 1210, 1211, 1212, 1213, 1214 & 12 15/MDS/2011 (ASSESSMENT YEARS : 2001-02 TO 2007-08) THE ASSISTANT COMMISSISONER OF INCOME TAX, CENTRAL CIRCLE II, TIRUCHIRAPPALLI. (APPELLANT) V. SHRI P. MURUGESAN, NO.35/36, II STREET, NATARAJAPURAM, NORTH COLONY, THANJAVUR 613 004. (RESPONDENT) ASSESSEE BY : SHRI G. BASKAR, ADVOCATE RESPONDENT BY : SHRI R.B. NAI K, CIT-DR DATE OF HEARING : 12.01.2012 DATE OF PRONOUNCEMENT : 20.01.2012 I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 2 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THESE ARE APPEALS OF THE ASSESSEE, CROSS-APPEALS OF THE DEPARTMENT AND CROSS-OBJECTIONS OF THE ASSESSEE FOR ASSESSMENT YEARS 2001-02 TO 2007-08. FOR ASSESSMENT YEARS 200 1-02 TO 2004- 05, ASSESSEE HAS FILED CERTAIN ADDITIONAL GROUNDS A S WELL, IN ITS CROSS APPEAL. 2. THERE IS A DELAY OF THREE DAYS IN THE APPEALS FI LED BY THE DEPARTMENT. SINCE REASONABLE CAUSE HAS BEEN SHOWN, DELAY IS CONDONED AND APPEALS ADMITTED. 3. DEPARTMENT, IN ONE OF THE GROUNDS, HAS ALSO ASSA ILED THE ORDER OF LD. CIT(APPEALS) FOR VIOLATION OF RULE 46A OF IN COME-TAX RULES, IN ITS APPEALS FOR ASSESSMENT YEARS 2001-02, 2003-04 A ND 2004-05. CROSS-OBJECTIONS OF THE ASSESSEE MAINLY SUPPORT THE ORDERS OF THE LD. CIT(APPEALS) IN SO FAR AS IT RELATE TO THE DELETION OF ADDITIONS MADE BY THE A.O. HOWEVER, IT ALSO HAS A GROUND ASSAILING INVOCATION OF SECTION 153A OF INCOME-TAX ACT, 1961 (IN SHORT TH E ACT) CITING A I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 3 REASON THAT NO MATERIALS WERE SEIZED DURING THE COU RSE OF SEARCH AND NO UNDISCLOSED INVESTMENT OR EXPENSES WERE FOUND DU RING THE SEARCH. 4. ONE OF THE MAIN GRIEVANCES RAISED BY THE ASSESSE E IN ITS APPEALS IS THAT HE WAS NOT GIVEN PROPER OPPORTUNITY FOR PRODUCING RECORDS AND EVIDENCE BEFORE THE A.O. IN SUPPORT OF HIS RETURNS FOR THE IMPUGNED ASSESSMENT YEARS AND THE ASSESSING OFFICER HAD COMPLETED THE ASSESSMENTS UNDER SECTION 144 OF THE ACT IN A HURRY. THIS BEING IN THE NATURE OF A PRELIMINARY OBJECTION IS DEALT WITH FIRST. 5. SHORT FACTS AS CAN BE CULLED OUT FROM THE ASSESS MENT ORDERS FOR THE IMPUGNED ASSESSMENT YEARS ARE THAT ASSESSEE WAS THE CHAIRMAN AND MANAGING DIRECTOR OF SRI PONNAIYA RAMA JAYATHAMMAL EDUCATIONAL & CHARITABLE TRUST (SPRECT) AND HE WAS ALSO RUNNING CERTAIN BUSINESS INDIVIDUALLY. THERE WAS A SEARCH ON 5.10.2006 IN THE PREMISES OF ASSESSEE AND ALSO A SURVEY OPERATION IN THE EDUCATIONAL INSTITUTION RUN BY HIM. IT SEEMS THE REVENUE WHILE CONDUCTING SEARCH IN THE EDUCATIONAL INSTITUTION RUN BY ONE SHRI R. N ATHAM VISWANATHAN, HAD UNEARTHED CERTAIN LINK BETWEEN SPRECT AND M/S T ITAN I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 4 EDUCATIONAL TRUST IN WHICH SHRI R.N. VISWANATHAN HA D SOME INTEREST. ASSESSEE WAS INTERCEPTED AT CHENNAI AIRPORT ON 25.1 1.2006 WITH A CASH OF ` 1 CRORE. AS PER THE A.O., DURING THE COURSE OF SEA RCH PROCEEDINGS IN THE PREMISES OF THE ASSESSEE AND THA T OF SPRECT, SEVERAL INCRIMINATING DOCUMENTS WERE FOUND WHICH DE MONSTRATED UTILIZATION OF TRUST FUNDS FOR PERSONAL BENEFIT OF THE ASSESSEE AS WELL AS OTHER TRUSTEES. NOTICE UNDER SECTION 153A(A) WA S SERVED ON THE ASSESSEE ON 16.10.2007 FOR FILING RETURNS FOR ASSE SSMENT YEARS 2001-02 TO 2006-07. ASSESSEE IT SEEMS REQUESTED VI DE HIS LETTER DATED 16.11.2007, FOR A MONTHS TIME FOR FILING SUC H RETURNS AS HE CLAIMED TO BE UNWELL. BUT, NO RETURNS WERE FORTHCO MING AND IN THE MEANTIME, FILE OF THE ASSESSEE WAS TRANSFERRED FROM MADURAI TO CENTRAL CIRCLE II, TRICHY. THE CHANGE IN THE ASS ESSING OFFICER RESULTED IN ONE MORE OPPORTUNITY BEING GIVEN TO THE ASSESSEE BY WAY OF A LETTER FROM THE NEW A.O. DATED 8.8.2008. TO T HIS, IT SEEMS, ASSESSEE REPLIED THAT THE BOOKS OF ACCOUNTS AND OTH ER RECORDS WERE ALREADY SEIZED BY THE DEPARTMENT AND HE HAD TO BE G IVEN OPPORTUNITY FOR TAKING COPIES OF SUCH SEIZED MATERIALS. AS PER THE A.O., ASSESSEE WAS REQUIRED TO COLLECT THE COPIES OF SEIZED MATERI ALS BEFORE I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 5 16.9.2008 VIDE HIS LETTER DATED 10.9.2008. BUT, NE VERTHELESS, ASSESSEE HAD TAKEN SUCH COPIES ONLY ON 4.10.2008. ASSESSEE AGAIN PLEADED TIME FOR FILING THE RETURNS UPTO 30.10.2008 ON ACCOUNT OF VOLUMINOUS NATURE OF THE COPIED DOCUMENTS. FINALLY RETURNS WERE FILED ON 24.10.2008 FOR ASSESSMENT YEARS 2001-02 TO 2006-07, WITH INCOME AS UNDER:- ASST. YEAR DATE OF FILING INCOME RETURNED AGRICULTURAL INCOME 2001 - 02 24.10.2008 4,38,586 40,350 2002 - 03 24.10.2008 5,74,720 1,05,000 2003 - 04 24.10.2008 10,84, 590 9,75,000 2004 - 05 24.10.2008 11,53,816 7,50,000 2005 - 0 6 24.10.2008 12,04,610 NIL 2006 - 07 24.10.2008 17,01,624 NIL 6. FOR ASSESSMENT YEAR 2007-08, ASSESSEE FILED HIS RETURN ON 16.12.2008 AND INCOME RETURNED THEREIN WAS ` 15,26,855/-. NOTICES UNDER SECTION 143(2) OF THE ACT WERE SERVED ON THE ASSESSEE ON 30.10.2008 FOR ASSESSMENT YEARS 2001-02 TO 2006-07 POSTING THE CASE FOR HEARING ON 6.11.2008. FOR ASSESSMENT YEAR 2007-08, SUCH A NOTICE WAS SERVED ON THE ASSESSEE ON 17.12.2008. A NOTICE UNDER SECTION 142(1) OF THE ACT WAS ALSO ISSUED TO THE AS SESSEE FOR ASSESSMENT YEARS 2001-02 TO 2006-07 ON 18.11.2008. IN RESPONSE I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 6 TO SUCH NOTICES, SHRI PMR. GOWRI SHANKAR, CHARTERED ACCOUNTANT, APPEARED ON BEHALF OF THE ASSESSEE ON 2.12.2008 AND 18.12.2008 FOR ASSESSMENT YEARS 2001-02 TO 2006-07. IT WAS MENTIO NED BY THE ASSESSING OFFICER THAT REQUIRED DETAILS CALLED FOR WERE NOT SUBMITTED. HOWEVER, FOR ASSESSMENT YEAR 2007-08, NOTING OF THE ASSESSING OFFICER WAS THAT ASSESSEE WAS FURNISHING STORIES FO R NON-PRODUCTION OF BOOKS OF ACCOUNTS AND THUS, HAD FAILED TO PRODUCE T HE BOOKS OF ACCOUNTS. ASSESSMENTS WERE COMPLETED FOR ALL THE ASSESSMENT YEARS UNDER SECTION 144 OF THE ACT READ WITH SECT ION 153A OF THE ACT. IN SUCH ASSESSMENTS VARIOUS ADDITIONS WERE MA DE BY THE ASSESSING OFFICER DISALLOWING THE LOSSES CLAIMED IN ASSESSEES CAR BUSINESS, INVESTMENT IN FIXED ASSETS, LOANS TAKEN F ROM VARIOUS PERSONS WHICH WERE DISBELIEVED, FOR AMOUNTS SEIZED FROM THE ASSESSEE FROM CHENNAI AIRPORT, DISALLOWING LOSS CLA IMED BY THE ASSESSEE FROM HIS PROPRIETORSHIP CONCERN PR&SONS, G IFT MADE TO TITAN EDUCATIONAL TRUST, RENT FROM GUEST HOUSE AND NOTIONAL INTEREST ON RENT DEPOSIT. INTEREST UNDER SECTIONS 234A, 234 B AND 234C ALSO CHARGED. I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 7 7. ASSESSEE MOVED IN APPEAL BEFORE LD. CIT(APPEALS ) FOR ALL THE YEARS PRIMARILY CHALLENGING THE VALIDITY OF THE PR OCEEDINGS INITIATED UNDER SECTION 153A OF THE ACT AND ALSO VALIDITY OF THE BEST JUDGEMENT ASSESSMENT DONE UNDER SECTION 144 OF THE ACT. AS SESSEE ALSO ASSAILED VARIOUS ADDITIONS AND DISALLOWANCES MADE B Y THE ASSESSING OFFICER. LD. CIT(APPEALS) BY WAY OF A CONSOLIDATE D ORDER DATED 22.3.2011 ALLOWED SOME OF THE CLAIMS OF THE ASSESSE E, WHEREAS, CONFIRMED CERTAIN OTHER ADDITIONS MADE BY THE ASSES SING OFFICER. INSOFAR AS THE CHALLENGE ON PROCEEDINGS UNDER SECTI ON 153A WAS CONCERNED, VIEW OF THE LD. CIT(APPEALS) WAS THAT T HERE WAS INDEED A SEARCH AT THE PREMISES OF THE ASSESSEE ON 5.10.2006 AND ALSO ON 25.10.2006 AT CHENNAI AIRPORT WHERE A SUM OF ` 1 CRORE WAS SEIZED FROM HIM AND THEREFORE, THE PROCEEDINGS INITIATED UNDER SECTION 153A OF THE ACT WAS VALID. INSOFAR AS ASSESSEES CHALLENGE AGAINST BEST JUDGEMENT UNDER SECTION 144 OF THE ACT WAS CO NCERNED, OBSERVATION OF LD. CIT(APPEALS) WAS THAT ASSESSING OFFICER HAD BROUGHT OUT THE CHRONOLOGY OF EVENTS LEADING TO SUC H ASSESSMENTS AND CONCLUDED THAT ASSESSEE HAD NOT CO-OPERATED IN THE ASSESSMENT I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 8 PROCEEDINGS AND FURTHER HE HIMSELF HAD GRANTED ENOU GH OPPORTUNITY TO THE ASSESSEE TO PUT FORTH HIS CASE. 8. NOW BEFORE US, AS ALREADY MENTIONED, ASSESSEE HA S RAISED A COMMON GRIEVANCE THAT HE WAS NOT GIVEN PROPER OPPOR TUNITY EITHER BY THE A.O. OR BY THE CIT(APPEALS) FOR PRESENTING HIS CASE IN SUPPORT OF THE RETURNS. ASSESSEE ALSO ASSAILED THE CONFIRMATI ON OF VARIOUS ADDITIONS AND DISALLOWANCE OF LOSSES. AS AGAINST T HIS, THE DEPARTMENT CHALLENGES THE DELETION OF ADDITIONS MAD E BY LD. CIT(APPEALS). IN THE C.OS, AS ALREADY NOTED BY US, ASSESSEE HAS RAISED THE QUESTION OF VALIDITY OF THE PROCEEDINGS WHEN THERE WAS NO SEIZURE OF ANY MATERIAL DURING THE COURSE OF SEARCH . 9. LEARNED A.R. STARTED HIS ARGUMENTS POINTING OUT THAT IN A SIMILAR SITUATION IN THE CASE OF SPRECT FOR THE SAM E ASSESSMENT YEARS, THIS TRIBUNAL HAD SET ASIDE THE ORDERS OF A. O. AND LD. CIT(APPEALS) AND REMITTED THE MATTER BACK TO A.O. F OR DOING FRESH ASSESSMENTS DE NOVO AFTER GIVING OPPORTUNITY TO THE ASSESSEE. AS PER THE LEARNED D.R., THE FACT SITUATION WAS SIMILA R TO THAT OF SPRECT AND THEREFORE, IN THIS ASSESSEES CASE ALSO, FOR IM PUGNED I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 9 ASSESSMENT YEARS, THE MATTER REQUIRED TO BE SENT BA CK TO A.O. FOR FRESH ASSESSMENTS. COPY OF THE ORDERS OF THIS TRI BUNAL IN THE CASE OF SPRECT IN I.T.A. NOS.1832 TO 1838/MDS/2009 DATED 11 TH FEBRUARY, 2010 WAS PLACED ON RECORD AT PAPER-BOOK PAGES 120 T O 129. 10. PER CONTRA, ON THIS POINT, LEARNED D.R. SUBMIT TED THAT SUFFICIENT OPPORTUNITIES WERE GRANTED TO THE ASSESSEE BY BOTH THE A.O. AS WELL AS LD. CIT(APPEALS). BUT, THE ASSESSEE HAD FAILED TO CO-OPERATE THE AUTHORITIES AND THEREFORE, FURTHER OPPORTUNITY SHOU LD NOT BE GIVEN TO THE ASSESSEE. 11. FIRST DEALING WITH THE PRELIMINARY OBJECTIONS O F THE ASSESSEE, WE FIND THAT ASSESSMENTS FOR ALL THE IMPUGNED ASSESSME NT YEARS WERE COMPLETED UNDER SECTION 144 OF THE ACT, THOUGH THE PROCEEDINGS WERE INITIATED UNDER SECTION 153A OF THE ACT. AS PER THE A.O., ASSESSEE DID NOT SUBMIT THE DETAILS ASKED FOR, BUT HAD EMPLOYED VARIOUS DELAYING TACTICS. AGAINST THIS, ARGUMENT O F THE ASSESSEE IS THAT COPIES OF THE SEIZED MATERIAL COULD BE TAKEN O NLY ON 4.10.2008. IN THIS RESPECT, IT IS PERTINENT TO HAVE A LOOK AT THE RELEVANT PART OF THE I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 10 ASSESSMENT ORDER, AS TAKEN OUT FROM SUCH ORDER FOR ASSESSMENT YEAR 2001-02. THIS PART IS REPRODUCED BELOW:- CONSEQUENTLY, NOTICE U/S 153A(A) DATED 16/10/2007 W AS SERVED ON THE ASSESSEE ON THE SAME DATE FOR THE AS SESSMENT YEAR 2001-02. IN RESPONSE TO THIS, THE ASSESSEE VI DE HIS LETTER DT.16/11/07 REQUESTED FOR ONE MONTH TIME TO FILE TH E RETURN OF INCOME AS HE WAS NOT FEELING WELL. HOWEVER, HE FAI LED TO FURNISH THE RETURN OF INCOME WITHIN THE TIME SOUGHT BY HIM. LATER, THE FILE GOT TRANSFERRED FROM MADURAI TO CENTRAL CIRCLE -II, TRICHY. DUE TO THE CHANGE OF INCUMBENT ONE MORE OPPORTUNITY WAS GIVEN TO ASSESSEE BY WAY OF LETTER DATED 08/08/2008. THE ASSESSEE WITHOUT FILING THE RETURN VIDE HIS LETTER DT.16/08/ 08 HAS STATED THAT THE INCOME TAX DEPARTMENT HAS SEIZED A/C BOOKS & OTHER RECORDS AND THEREFORE REQUESTED FOR THE COPIES OF S EIZED MATERIAL. IN RESPONSE TO THIS REQUEST, THE ASSESSE E WAS REQUESTED TO COME & COLLECT THE COPIES OF SEIZED MA TERIAL ON OR BEFORE 16/09/08 VIDE MY LETTER DT.10/09/2008. IT W AS SPECIFICALLY STATED THAT SUCH REQUEST WONT BE ENTE RTAINED LATER AND ADVERSE ACTION WILL BE TAKEN ON CONTINUOUS DELA Y IN FILING OF RETURN OF INCOME. ONCE THE FACILITY WAS ALLOWED TO THE ASSESSEE FOR MAKING PHOTO-COPY, HE DID NOT CLAIM THE SAID MA TERIAL FOR ABOUT 10 DAYS. THE REQUEST MADE OVER PHONE TO HIS A.R. AND THE ASSESSEE FELL IN DEAF EARS. HOWEVER, THE ASSESSEE VIDE HIS LETTER DT.14/10/08 HAS STATED HE HAS TAKEN THE COPI ES OF DOCUMENTS ONLY ON 4/10/08 AND CLAIMED THAT ON ACCOU NT OF VOLUMINOUS NATURE OF DOCUMENTS AND AS THE SEGREGAT ION PROCESS WILL TAKE SOME TIME, PLEADED FOR PERMISSION TO FILE THE RETURN OF INCOME ON OR BEFORE 30/10/2008. A DETAILED LETT ER WAS SENT TO THE ASSESSEE ON 17/10/08 ALLOWING THE TIME UPTO 24/10/08 TO FILE THE RETURN. IT WAS SPECIFICALLY STATED THAT I T WAS THE LAST OPPORTUNITY TO FILE THE RETURN OF INCOME. THE DETA ILS OF THE RETURNED INCOME FILED BY THE ASSESSEE IN RESPONSE T O THE NOTICE U/S 153A ARE AS FOLLOWS: I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 11 ASST. YEAR DATE OF FILING INCOME RETURNED AGRICULTURAL INCOME 2001 - 02 24.10.2008 4,38,586 40,350 2002 - 03 24.10.2008 5,74,720 1,05,000 2003 - 04 24.10.2008 10,84,590 9,75,000 2004 - 05 24.10.2008 11,53,816 7,50,000 2005-06 24.10.2008 12,04,610 NIL 2006 - 07 24.10.2008 17,01,624 NIL AS INDICATED ABOVE, THE ASSESSEE HAS FILED THE RETU RN OF INCOME FOR A.Y.2001-02 ON 24/10/2008 ADMITTING AN I NCOME OF ` 4,38,586/- AND AGRICULTURAL INCOME OF ` 40,350/- AS ADMITTED IN THE ORIGINAL RETURN. NOTICE U/S.143(2) DT.28/10/2008 WAS SERVED ON THE A SSESSEE ON 30/10/2008 POSTING THE CASE FOR HEARING ON 6/11/08. THERE WAS NO RESPONSE FROM THE ASSESSEE. CONSEQUENTLY, NOTICE U /S.142(1) ALONG WITH QUESTIONNAIRE WAS ISSUED TO THE ASSESSEE ON 14 /11/08. IT IS HIGHLY DEPLORABLE THAT THERE WAS NO RESPONSE TO THA T NOTICE ALSO. MEANWHILE, NEW INCUMBENT JOINTED IN CENTRAL CIRCLE- II, TRICHY AND ONE MORE NOTICE U/S.142(1) DT.18/11/08 WAS ISSUED TO TH E ASSESSEE. THE ASSESSEE IN HIS COLD BLOODED DELAYING TACTICS HAS R EQUESTED FOR ADJOURNMENT OF THE CASE TO 1 ST WEEK OF DECEMBER, 08 VIDE HIS LETTER DT.24/11/08. THE ASSESSING OFFICER VIDE HIS LETTER DT.02/12/08 HAS ISSUED A PENALTY NOTICE U/S.271(1)(B) AND ALSO ONE MORE NOTICE U/S.142(1) ON 02/12/08. IN RESPONSE TO THIS, SHRI PMR.GOWRI SHANKAR, CA APPEARED ON 2/12/08 AND 18/12/08 BUT, THE REQUIR ED DETAILS CALLED FOR HAVE NOT BEEN SUBMITTED. UNDER THE CIRCUMSTANCES, IT IS VERY WELL ESTABLISHE D THAT THE ASSESSEE DO NOT WANT TO REPRESENT THIS CASE AND IT WONT SERVE ANY PURPOSE WAITING FOR THE DETAILS FROM THE ASSESSEE. UNDER THE CIRCUMSTANCES, THE ASSESSMENT IS COMPLETED U/S.153A R.W.S. 144 OF THE I.T.ACT, 1961. I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 12 FOR ASSESSMENT YEAR 2007-08, WE FIND THAT THE NOTIN G OF THE A.O. IS DIFFERENT AND THIS IS REPRODUCED HEREUNDER:- THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR A.Y.2007-08 ON 16/12/2008 ADMITTING AN INCOME OF ` 15,26,855/-. THE RETURN OF INCOME WAS PROCESSED U/ S.143(1). NOTICE U/S.143(2) DT.16/12/08 WAS SERVED ON THE ASS ESSEE ON 17/12/08. IN RESPONSE TO THIS, SHRI PMR GOWRISHANK AR, AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS APPEA RED ON 18/12/08 AND THE CASE WAS DISCUSSED WITH HIM. THE SUMMONS WAS ISSUED U/S.131 TO SHRI P. MURUGESAN , THE MANAGING TRUSTEE OF SPRECT ON 15/12/2008 TO APP EAR IN THIS OFFICE ON 22/12/2008. IN RESPONSE TO SUMMONS ISSUED U/S.131, SHRI P. MURUGESAN APPEARED ON 22/12/08, TH E SWORN STATEMENT WAS RECORDED FROM HIM ON THE SAME DAY. W HILE RECORDING THE SWORN STATEMENT, THE ASSESSEE WAS ASK ED SPECIFICALLY TO FURNISH THE BOOKS OF ACCOUNTS OF TH E TRUST AND OF HIS INDIVIDUAL CAPACITY. WHILE ANSWERING FOR TH IS, THE ASSESSEE STATES THAT HE HAS ALREADY SUBMITTED BOOKS OF ACCOUNTS THROUGH HIS AUDITOR, AGAIN FURNISHING STOR IES FOR NON- PRODUCTION OF BOOKS OF ACCOUNTS. HE STATED IN HIS SWORN STATEMENT THAT HE WILL FURNISH BOOKS OF ACCOUNTS WI TH ALL DETAILS BY 24/12/08. BUT, HAS FAILED TO DO SO. UNDER THE CIRCUMSTANCES, IT IS VERY WELL ESTABLISHE D THAT THE ASSESSEE DO NOT WANT TO REPRESENT THIS CASE AND IT WONT SERVE ANY PURPOSE WAITING FOR THE DETAILS FROM THE ASSESSEE. UNDER THE CIRCUMSTANCES, THE ASSESSMENT IS COMPLETE D U/S.144 OF THE I.T. ACT, 1961. IT CANNOT BE DENIED THAT THERE WAS A CHANGE IN THE INCUMBENT OF THE ASSESSING OFFICER. ASSESSEE HAD TAKEN COPIES OF TH E SEIZED I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 13 DOCUMENTS ON 4.10.2008 AND THESE COPIES OF SEIZED D OCUMENTS WERE VOLUMINOUS, AND THIS HAS NOT BEEN DISPUTED BY THE D EPARTMENT. ASSESSEE HAD FILED ITS RETURNS BY 24.10.2008 FOR AS SESSMENT YEARS 2001-02 TO 2006-07 AND FOR ASSESSMENT YEAR 2007-08, IT HAD FILED ITS RETURN ON 16.12.2008. ASSESSING OFFICER HIMSELF HA S ADMITTED THAT ASSESSEES COUNSEL HAD ENTERED APPEARANCE ON 2.12.2 008 AND 18.12.2008. THERE IS NOTHING ON RECORD TO SHOW WHA T WERE THE DETAILS CALLED FOR BY THE A.O., WHAT WERE THE DETAI LS SUBMITTED BY THE ASSESSEE AND WHAT WERE THOSE DETAILS WHICH WERE CAL LED FOR BUT NOT SUBMITTED BY THE ASSESSEE. WE ARE UNABLE TO APPREC IATE THE CONCLUSION OF THE A.O. THAT ASSESSEE DID NOT WANT T O REPRESENT HIS CASE. ASSESSEE WAS ISSUED SUMMONS ON 15.12.2008 AN D HE HAD APPEARED ON 22.12.2008. STATEMENT WAS ALSO RECORDE D FROM HIM. EVEN IF WE PRESUME THAT THE ASSESSEE HAD FAILED TO PRODUCE THE BOOKS OF ACCOUNTS ON 24.12.208, THE TIME-GAP BETWEE N 24.12.2008 AND 31.12.2008 WAS, IN OUR OPINION, TOO SHORT TO MA KE A REASONED ASSESSMENT CONSIDERING THE NUMBER OF YEARS INVOLVED . ADMITTEDLY, LD. CIT(APPEALS) HAD CANCELLED A NUMBER OF ADDITIO NS AND SUSTAINED SOME OTHERS. IF WE LOOK AT THE ADDITIONS MADE BY T HE A.O., THEY WERE I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 14 MAINLY FOR UNEXPLAINED CASH CREDIT, DIVERSION OF TR UST FUNDS AND GENERATION OF UNACCOUNTED MONEY FROM THE OPERATION OF SPRECT. CONCLUSION REGARDING GENERATION OF UNACCOUNTED MONE Y FROM SPRECT HAS BEEN REACHED FROM BUNDLES OF DOCUMENTS FOUND AND SEIZED, BUT SUCH DOCUMENTS HAVE NOT BEEN IDENTIFIE D IN THE ASSESSMENT ORDERS. HOW THESE AMOUNTS HAVE BEEN ARR IVED AT AND HOW THESE AMOUNTS WERE FOUND TO BELONG TO THE ASSES SEE, ARE NOT COMING OUT FROM THE ASSESSMENT ORDERS. EXCEPT FOR ASSESSMENT YEARS 2006-07 AND 2007-08, ASSESSING OFFICER HAD ES TIMATED A PERCENTAGE OF THE CAPITATION FEE RECEIVED BY M/S SP RECT TO BE THE INCOME OF THE ASSESSEE. AS FOR LOAN AMOUNT CONSIDE RED NOT PROPERLY EXPLAINED, WE CANNOT FIND FROM WHICH BASIC RECORDS THE ASSESSING OFFICER REACHED A CONCLUSION THAT ANY SUCH LOANS WE RE RAISED BY THE ASSESSEE. SIMILARLY, HOW THE ASSESSING OFFICER CAM E TO A CONCLUSION THAT THERE WAS A DIVERSION OF TRUST FUNDS IS ALSO N OT CLEAR. FUNDS BELONGING TO SPRECT WAS LINKED WITH THE SUM OF ` 1 CRORE SEIZED FROM ASSESSEE FROM CHENNAI AIRPORT, AND THE ASSESSI NG OFFICER ALSO CAME TO A CONCLUSION THAT DEPOSITS OF MONEY IN THE ASSESSEES BANK ACCOUNTS WERE ACTUALLY FROM THE CORPUS FUND OF SPRE CT. HOWEVER, I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 15 ESSENTIAL LINKAGES FOR COMING TO THESE CONCLUSIONS ARE NOT FORTHCOMING FROM THE ASSESSMENT ORDERS. IN ALL THE SE MATTERS, WE ARE OF THE OPINION THAT ASSESSEES EXPLANATION OUGHT HA VE BEEN SOUGHT AND OBTAINED. LD. CIT(APPEALS) WHILE CONSIDERING T HE CONTENTION OF THE ASSESSEE THAT HE WAS NOT GIVEN SUFFICIENT OPPOR TUNITY BY THE ASSESSING OFFICER, WAS OF THE OPINION THAT HE HIMSE LF HAD GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE. HOWEVER, AS ALREADY MENTIONED BY US, ONE OF THE GROUNDS RAISED BY THE R EVENUE FOR ASSESSMENT YEARS 2001-02, 2003-04 AND 2004-05 IS VI OLATION OF RULE 46A AND ADMISSION OF ADDITIONAL EVIDENCE BY THE LD. CIT(APPEALS). CONSIDERING THE ENTIRE GAMUT OF FACTS ABOVE MENTION ED, WE ARE OF THE OPINION THAT THE MATTERS REQUIRE A RE-VISIT BY THE A.O. WE FIND THAT IN SIMILAR CIRCUMSTANCES, IN THE CASE OF SPRECT, THIS TRIBUNAL HAD IN ITS ORDER DATED 11 TH FEBRUARY, 2010, REMITTED BACK THE ISSUES TO THE ASSESSING OFFICER FOR CONSIDERATION DE NOVO. HERE ALSO, WE THEREFORE DEMIT IT FIT TO SET ASIDE THE ORDERS OF THE A.O. AN D LD. CIT(APPEALS) AND REMIT THE ENTIRE ASSESSMENTS FOR ALL THE ASSESS MENT YEARS BACK TO ASSESSING OFFICER FOR DE NOVO CONSIDERATION AFTE R GIVING PROPER OPPORTUNITY TO THE ASSESSEE TO EXPLAIN ITS RETURNS WITH DETAILS. I.T.A. NOS.965 TO 967/MDS/11 I.T.A. NOS.1062 TO 1065/MDS/11 I.T.A. NOS.1209 TO 1215/MDS/11 C.O.NOS. 126 TO 132/MDS/11 16 NEEDLESS TO SAY THAT WHILE FRAMING FRESH ASSESSMENT S, THE ASSESSING OFFICER WILL CONSIDER ALL THE EXPLANATIONS FURNISHE D BY THE ASSESSEE AND PROCEED IN ACCORDANCE WITH LAW. ASSESSEE SHALL CO-OPERATE WITH THE A.O. IN COMPLETING THE ASSESSMENT S. LEGAL ISS UE REGARDING VALIDITY OF THE ASSESSMENTS IS KEPT OPEN. 12. IN THE RESULT, APPEALS OF THE ASSESSEE AND CROS S APPEALS OF THE REVENUE FOR ALL THE YEARS ARE ALLOWED FOR STATISTIC AL PURPOSES. CROSS- OBJECTIONS OF THE ASSESSEE ARE DISMISSED AS INFRUCT UOUS. THE ORDER WAS PRONOUNCED IN THE COURT ON 20 TH JANUARY, 2012. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 20 TH JANUARY, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), TIRUCHIRAPPALLI (4) CIT, CENTRAL-II, CHENNAI (5) D.R. (6) GUARD FILE