ACIT, Pune V. Shri Ram Vishnu Bansode, Pune

ITA 1428/PUN/2012

• Counselvise Citation: 142824514 RSA 2012
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-10-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 25-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Assessee Lawyers: S N DOSHI
• Keywords: Unexplained investment; Opportunity of being heard; Principle of natural justice; Period of limitation; Source of fund; Non compliance; Ignorance of law
• Section: 142(1); 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1428/PN/2012 (ASSTT.YEAR : 2005-06) ACIT, CIRCLE-8, PUNE .. APPELLANT VS. RAM VISHNU BANSODE, MILIND NAGAR, PIMPRI, PUNE 411 026 PAN NO. AOMPB4164N .. RESPONDENT ASSESSEE BY : SHRI S.N. DOSHI REVENUE BY : SRI S.P. WALIMBE DATE OF HEARING : 09-01-2014 DATE OF PRONOUNCEMENT : 21-01-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 26-03-2012 OF THE CIT(A) CENTRAL, PUNE RELATI NG TO ASSESSMENT YEAR 2005-06. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF DEALING IN RESALE OF IMFL. IN THIS CASE INFORMATION WAS RECEIVED FROM THE TRANSACTIONS RECO RDED IN AIR FURNISHED U/S.285BA OF THE I.T. ACT ACCORDING TO WH ICH THE ASSESSEE HAS MADE CASH DEPOSITS IN HIS SAVINGS BANK ACCOUNT TOTA LLING TO RS.60,45,190/- DURING THE F.Y. 2004-05. ON THE BAS IS OF THIS INFORMATION THE ASSESSING OFFICER ISSUED NOTICE U/S.142(1) TO T HE ASSESSEE CALLING FOR THE RETURN OF INCOME FOR A.Y. 2005-06. THE NOTICE WAS DULY SERVED ON THE ASSESSEE ON 05-09-2007. SINCE THERE WAS NO COM PLIANCE THE 2 ASSESSING OFFICER ISSUED ANOTHER NOTICE U/S.142(1) TO THE ASSESSEE CALLING FOR THE FOLLOWING DETAILS : 1. SOURCES OF INCOME FOR CASH DEPOSITS MADE IN THE SAVI NGS BANK ACCOUNT OF THE ASSESSEE DURING THE F.Y. 2004-05 ALONG WITH NECESSARY DOCUMENTARY EVIDENCE IN SUPPORT OF THE SOURCES OF INCO ME. 2. DETAILS OF BANK ACCOUNTS MAINTAINED BY THE ASSESSEE DU RING THE F.Y. 2004-05 ALONG WITH BANK PASS BOOKS/BANK ACCOUNT ST ATEMENTS. 3. STATEMENT OF ASSETS/LIABILITIES AS ON 31-03-2005. ALTHOUGH THE ABOVE NOTICE WAS DULY SERVED ON THE AS SESSEE ON 26-11- 2007 AGAIN THERE WAS NON-COMPLIANCE. THE ASSESSING OFFICER THEREFORE WAS OF THE OPINION THAT THE ASSESSEE HAS NO EXPLANA TION TO OFFER REGARDING THE SOURCE OF CASH DEPOSITS IN THE SAVINGS BANK ACC OUNT. HE ACCORDINGLY MADE ADDITION OF RS.60,45,190/- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF CASH DEPOSITED IN THE SAVINGS BANK ACCOU NT TREATING THE SAME AS UNEXPLAINED INVESTMENT. 3. BEFORE CIT(A) IT WAS SUBMITTED THAT THE CASH DEP OSITED IN THE BANK ACCOUNT REPRESENT THE SALE PROCEEDS OF IMFL. THE A SSESSEE HAS ISSUED CHEQUES TO THE CREDITORS FOR THE PURCHASES MADE FRO M THE SAID BANK ACCOUNT. THE ASSESSEE ALSO ENCLOSED THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AS ON 31-03-2005 AND SUBMITTED THAT T HE ASSESSEE HAD EARNED PROFIT OF RS.3,34,290/- FROM THE SAID BUSINE SS. IT WAS SUBMITTED THAT FOR CERTAIN REASONS THE ASSESSEE DID NOT FILE THE RETURN OF INCOME. SIMILARLY DUE TO IGNORANCE OF LAW THE ASSESSEE DID NOT COMPLY TO THE NOTICES ISSUED BY THE ASSESSING OFFICER. IT WAS FU RTHER SUBMITTED THAT THE ASSESSING OFFICER PASSED THE ORDER U/S.144 ON 24-12 -2007 TREATING THE ENTIRE DEPOSIT OF RS.60,45,190/- AS INCOME OF THE A SSESSEE ALTHOUGH AS PER THE NOTICE THE ASSESSEE WAS REQUIRED TO ATTEND ON 28-12-2007. THIS 3 CLEARLY PROVES THAT THE ASSESSING OFFICER DID NOT O FFER ADEQUATE OPPORTUNITY TO THE ASSESSEE AND ACTION OF THE ASSES SING OFFICER IS CONTRARY TO THE PRINCIPLES OF NATURAL JUSTICE. WIT HOUT PREJUDICE TO THE ABOVE, IT WAS SUBMITTED THAT SINCE THE DEPOSITS IN THE BANK ACCOUNT REPRESENTS THE ENTIRE SALE PROCEEDS, THEREFORE, IT CANNOT BE TREATED AS INCOME OF THE ASSESSEE. SALE PROCEEDS DO INCLUDE G ROSS PROFIT. IT WAS ACCORDINGLY SUBMITTED THAT THE ORDER PASSED U/S.144 BE CANCELLED AND THE PROFIT OF RS.3,34,290/- AS PER THE PROFIT AND LOSS ACCOUNT SHOULD BE TREATED AS INCOME OF THE ASSESSEE. 3.1 ON THE BASIS OF THE SUBMISSIONS MADE BY THE ASS ESSEE THE LD.CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSES SING OFFICER. THE ASSESSING OFFICER VIDE LETTER DATED 05-08-2009 SUBM ITTED HIS REMAND REPORT TO THE CIT(A)-III, PUNE WHICH HAS BEEN INCOR PORATED BY THE CIT(A) AT PARA 6 OF HIS ORDER AND WHICH READS AS UN DER : IN THE SUBJECT MATTER AND WITH REFERENCE TO LETTERS UNDER REFERENCE THIS IS TO SUBMIT THAT THE CASE RECORDS OF THE ABOV E MENTIONED ASSESSEE HAS BEEN RECEIVED ON TRANSFER FROM THE ITO (CIB-3) PUNE ON 3/6/2008. ON VERIFICATION OF THE RECORD IT IS SEEN THAT A NOT ICE U/S. 142(1) OF THE INCOME TAX ACT, 1961 WAS ISSUED TO THE ASSESSEE ON 29/8/2007 REQUESTING HIM TO SUBMIT RETURN OF INCOME FOR AY 20 05-06 ON OR BEFORE 20/9/2007 AND THE SAID NOTICE WAS SERVED BY RPAD. THE ACKNOWLEDGEMENT BEING PROOF OF SERVICE IS ON RECORD . ANOTHER NOTICE U/S. 142(1) WAS ISSUED ON 12/12/2007 FIXING H EARING ON 28/12/2007. HOWEVER, THE PROOF OF SERVICE OF THE SA ME IS NOT ON RECORD. AS PER THE CASE RECORDS IT IS SEEN THAT THE RE WAS NO COMPLIANCE FROM THE ASSESSEE THROUGHOUT THE ASSESSM ENT PROCEEDINGS. THE ASSESSMENT WAS COMPLETED U/S. 144 OF THE INCOME TAX ACT, 1961 ON 24/12/2007 BY TREATING THE TOTAL CASH DEPOSITS OF RS. 60,45,190/- IN THE SAVING BANK ACCOUNT AS UNEXPLAINED DEPOSITS AND BROUGHT TO TAX. THE DEMAND ON ACCOUNT OF TAX AND INTEREST WAS R AISED AT RS.31,88,943/-. IT IS A FACT THAT THE ASSESSMENT H AS BEEN MADE BEFORE 28/12/2007. AS REGARDS TO THE CLAIM OF THE ASSESSEE THAT CASH D EPOSITS REPRESENTING THE SALE PROCEEDS OF THE ASSESSEE AND PROFIT EARNED OF RS.3,34,290/- THERE IS NOTHING ON RECORD TO GIVE CO MMENTS. 4 THE ASSESSEE HAS FAILED TO FILE RETURN OF INCOME AS REQUIRED U/S.139(1) OF THE INCOME TAX ACT, 1961. HE ALSO FAIL ED TO FURNISH THE SAME IN RESPONSE TO A NOTICE U/S.142(1) OF THE ACT ISSUED AND DULY SERVED. FURTHER, AS CLAIMED BEFORE THE HON'BLE CIT(A) HIS TURNOVER EXCEED RS.40.0 LACS, THEREFORE, HE WAS REQU IRED TO GET HIS ACCOUNTS FOR FY 2006-07 AUDITED AS PER THE PROVISIO NS OF SECTION 44AB OF THE ACT. IN VIEW OF THE ABOVE IT IS REQUESTED TO DECIDE THE APPEAL ON MERIT OF THE CASE. SD/- DCIT, CIR-8, PUNE 3.2 SIMILARLY THE ADDL.CIT RANGE-8, PUNE VIDE HIS L ETTER DATED 17-08- 2009 FORWARDED THE REMAND REPORT OF THE ASSESSING O FFICER WITH SPECIFIC COMMENTS WHICH HAS BEEN INCORPORATED BY THE CIT(A) AT PARA 7 OF HIS ORDER AND WHICH READS AS UNDER : AS PER THE REMAND REPORT OF THE ASSESSING OFFICER ASSESSMEN T IN THE CASE OF THE ASSESSEE WAS COMPLETED U/S. 144 IN VIEW O F THE NON COMPLIANCE OF ASSESSEE TO SEVERAL NOTICES U/S 142(1) ISSUED BY THE AO. FURTHER, RELIANCE IS BEING PLACED ON THE FOLLOWING J UDGMENTS:- 1. SIMPLEX ENTERPRISES VS UOI (2002) 178 CTR 51 (MUMBA I) (HIGH COURT) 2. FAIRDEAL ELEMENT VS CIT (2008) 302 ITR 173(GUJ) (HIGH COURT) WHEREIN THE JURISDICTIONAL HIGH COURT AND THE HON'BL E GUJARAT HIGH COURT AVERRED THAT 'WHERE SEVERAL NOTICES WERE ISSUED AND THE ASSESSEE DID NOT COMPLY NO RELIEF COULD BE GIVEN TO THE ASSESSEE IN APPE AL' IN VIEW OF THE ABOVE, THE APPEAL OF THE ASSESSEE IS LIA BLE TO BE DISMISSED AND THE ASSESSING OFFICER'S ORDER UPHELD ON MERI TS AND IF DEEMED FIT. SD/- ADDL.CIT, R-8, PUNE. 3.3 THEREAFTER THE LD.CIT(A) CALLED FOR COMMENTS OF THE ASSESSEE ON THE REMAND REPORT. THE ASSESSEE REPLIED TO THE SAM E AND SUBMITTED THAT THE ORDER PASSED U/S.144 ON 24-12-2007 WAS IN GROSS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE SINCE THE ASSESSING O FFICER HAD FIXED THE 5 HEARING ON 28-12-2007 ON WHICH DATE THE ASSESSEE WA S REQUIRED TO FURNISH THE DETAILS, HOWEVER, HE HAS PASSED THE ORD ER ON 24-12-2007. 4. SO FAR AS THE EXPLANATION REGARDING CASH DEPOSIT S IN THE SAVINGS BANK ACCOUNT IT WAS REITERATED THAT THE DEPOSITS RE PRESENT CASH SALES AND THE ASSESSEE HAS EARNED PROFIT OF RS.3,34,290/-. T HE ASSESSEE FURTHER SUBMITTED THAT THE PROFIT AND LOSS ACCOUNT HAS BEEN PREPARED ON THE BASIS OF PURCHASE REGISTER, SALES REGISTER, BANK BOOK, CA SH BOOK AND SALES INVOICES. RELYING ON THE DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF SAHARA INDIA (FIRM) VS. CIT REPORTED IN 300 ITR 403 AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF J.T. (IN DIA) EXPORTS LTD. VS. UOI REPORTED IN 262 ITR 269 IT WAS SUBMITTED THAT T HE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER SHOULD BE HELD AS N ULL AND VOID. 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) ANNULLED THE ASSESSMENT. WHILE DOING SO, HE OBSERV ED THAT THE ASSESSING OFFICER PASSED THE ORDER ON 24-12-2007 WITHOUT GIVI NG ANY OPPORTUNITY TO THE ASSESSEE TO MAKE COMPLIANCE TO THE NOTICE IS SUED U/S.142(1) OF THE ACT AS PER WHICH THE ASSESSEE WAS TO MAKE COMPLIANC E ON 28-12-2007, THEREFORE, THERE WAS A GROSS VIOLATION OF PRINCIPLE S OF NATURAL JUSTICE. 5.1 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES, THE LD.CI T(A) WAS JUSTIFIED IN ANNULLING THE ASSESSMENT AS THERE APPEARS TO BE A PERSISTENT TYPOGRAPHICAL ERROR IN WRITING THE DATE AS 24-12-200 7 INSTEAD OF 28-12- 2007? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES, THE LD.CIT (A) WAS JUSTIFIED IN ANNULLING THE ASSESSMENT MERELY ON THE BASI S THAT ASSESSMENT ORDER WAS PASSED PRIOR TO THE DATE FIXED FOR PRODUCTIO N OF ACCOUNTS AND DOCUMENTS? 6 3. WHETHER ON THE FACTS AND CIRCUMSTANCES, THE LD.CIT (A) WAS JUSTIFIED IN ANNULLING THE ASSESSMENT IGNORING THE FACTS THAT THE ASSESSEE NEVER FILED ANY RETURN OF INCOME IN RESPONSE TO EARLI ER NOTICE U/S.142(1) DULY SERVED UPON HIM. 6. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED TH AT THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S.144 IN VIEW OF NON-COMPLIANCE OF THE ASSESSEE TO THE NOTICES ISSUED U/S.142(1) BY TH E ASSESSING OFFICER. REFERRING TO THE DECISION OF HONBLE MUMBAI HIGH CO URT IN THE CASE OF SIMPLEX ENTERPRISES VS. UOI REPORTED IN 178 ITR 51 AND THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF FAIRDEAL ELEMENT VS. CIT REPORTED IN 302 ITR 173 HE SUBMITTED THAT THE HONB LE COURTS IN THE SAID DECISIONS HAVE HELD THAT WHERE SEVERAL NOTICES WERE ISSUED AND THE ASSESSEE DID NOT COMPLY NO RELIEF SHOULD BE GIVEN T O THE ASSESSEE IN APPEAL. REFERRING TO THE DECISION OF HONBLE MADRA S HIGH COURT IN THE CASE OF CIT VS. ANAIMUGAN TRANSPORTS PVT. LTD. REPO RTED IN 215 ITR 553 HE SUBMITTED THAT THE HONBLE COURT IN THE SAID DEC ISION HAS HELD THAT WHERE AN INVALID ASSESSMENT IS ANNULLED IT SHOULD B E REMANDED TO THE ITO SO THAT THE ASSESSEE IS NOT SET AT LARGE WITHOU T PAYMENT OF TAX. HE ACCORDINGLY SUBMITTED THAT THE CIT(A) WAS NOT JUSTI FIED IN ANNULLING THE ASSESSMENT AS THE ASSESSMENT WAS VALIDLY INITIATED. HE SHOULD HAVE TAKEN UP THE MATTER FROM THE STAGE WHERE ILLEGALITY WAS S O COMMITTED AND REMANDED THE MATTER TO THE ASSESSING OFFICER. HE A CCORDINGLY SUBMITTED THAT THE MATTER MAY BE REMITTED TO THE FILE OF THE ASSESSING OFFICER SINCE THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME NOR THE CIT(A) HAD DIRECTED THE ASSESSING OFFICER TO VERIFY THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE IN THE REMAND PROCEEDINGS. 7 7. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND STRONGLY SUPPORTED THE ORDER OF THE CIT(A). HE SUBMITTED TH AT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS VOID AB-IN ITIO SINCE HE PASSED THE ORDER ON 24-12-2007 ALTHOUGH THE DATE OF HEARIN G BEFORE HIM WAS 28- 12-2007, THEREFORE, THERE IS GROSS VIOLATION OF PRI NCIPLES OF NATURAL JUSTICE. ON MERIT, HE SUBMITTED THAT THE BANK DEPO SITS OF THE ASSESSEE IN THE SAVINGS BANK OF THE ASSESSEE REPRESENT ITS SALE PROCEEDS AND THE ENTIRE SALES CANNOT BE TREATED AS INCOME OF THE ASSESSEE. HE SUBMITTED THAT THE ASSESSEE HAS PREPARED PROFIT AND LOSS ACCOUNT, BALA NCE SHEET ETC. ON THE BASIS OF BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSE E ACCORDING TO WHICH SUCH PROFIT IS RS.3,34,290/-. THE ASSESSING OFFICE R DURING REMAND PROCEEDINGS HAS NOT ASKED FOR PRODUCTION OF SUCH BO OKS OF ACCOUNT. REGARDING THE REQUEST OF LD. DEPARTMENTAL REPRESENT ATIVE THAT THE MATTER SHOULD BE RESTORED TO THE FILE OF THE ASSESSING OFF ICER HE SUBMITTED THAT IT WILL CAUSE GREAT HARDSHIP TO THE ASSESSEE. 7.1 SO FAR AS THE DECISION OF HONBLE MADRAS HIGH C OURT IN THE CASE OF ANAIMUGAN TRANSPORTS PVT. LTD., (SUPRA) IS CONCERNE D HE SUBMITTED THAT FACTS IN THAT CASE ARE COMPLETELY DIFFERENT FROM TH E FACTS OF THE INSTANT CASE. IN THAT CASE, RETURN FOR A.Y. 1973-74 WAS FI LED AND THE ASSESSING OFFICER COMPLETED THE ASSESSMENT FOR A.Y. 1974-75. UNDER THESE CIRCUMSTANCES, THE HONBLE COURT HELD THAT THE TRIB UNAL WAS NOT JUSTIFIED IN HOLDING THAT THAT THE ASSESSMENT WAS NONEST AND IT WAS HELD THAT THE TRIBUNAL SHOULD HAVE REMITTED THE CASE TO THE ASSES SING OFFICER. HOWEVER, IN THE INSTANT CASE THE ASSESSING OFFICER HAD GIVEN OPPORTUNITY TO THE ASSESSEE TO FURNISH THE DETAILS ON 28-12-200 7 AND PASSED THE ORDER ON 24-12-2007, THEREFORE, THE RATIO OF DECISION OF HONBLE MADRAS HIGH 8 COURT IN THE CASE OF ANAIMUGAN TRANSPORTS PVT. LTD. , (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DIS PUTE TO THE FACT THAT AS PER AIR INFORMATION THE CASH DEPOSITS IN THE SAVING S BANK ACCOUNT OF THE ASSESSEE WAS RS.60,45,190/-. THERE IS ALSO NO DISP UTE TO THE FACT THAT THE ASSESSEE HAS NOT FILED HIS RETURN OF INCOME BEFORE THE STATUTORY DUE DATE. THERE IS ALSO NO DISPUTE TO THE FACT THAT THERE WAS NO COMPLIANCE TO THE NOTICE ISSUED U/S.142(1) WHICH WAS SERVED ON THE AS SESSEE ON 05-09- 2007. FURTHER, THERE IS ALSO NO DISPUTE TO THE FAC T THAT THERE WAS NO COMPLIANCE TO THE NOTICE ISSUED U/S.142(1) DATED 19 -11-2007 FIXING THE DATE OF HEARING ON 28-11-2007 WHICH WAS DULY SERVED ON THE ASSESSEE ON 22-11-2007. WE FIND THE ASSESSING OFFICER GAVE A F INAL OPPORTUNITY TO THE ASSESSEE REQUIRING THE ASSESSEE TO APPEAR BEFOR E HIM ON 28-12-2007, HOWEVER, HE PASSED THE ORDER ON 24-12-2007. 8.1 IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE ASSESSING OFFICER HAD PASSED THE ORDER ON 24-12 -2007 ALTHOUGH ASSESSEE WAS REQUIRED TO APPEAR BEFORE HIM ON 28-1 2-2007, THEREFORE, THE ASSESSMENT ORDER IS VOID AB-INITIO AS THERE WAS VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. ON MERIT, IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE DEPOSITS IN THE BANK ACCOUNT ARE HIS SALE PROCEEDS AND THE PROFIT AS PER THE BOOKS OF ACCOUNT IS RS.3, 34,290/-. WE FIND THE CIT(A) ANNULLED THE ASSESSMENT ON THE GROUND THAT T HE ASSESSING OFFICER 9 PASSED THE ORDER ON 24-12-2007 WHEREAS THE ASSESSEE WAS REQUIRED TO APPEAR BEFORE THE ASSESSING OFFICER ON 28-12-2007. 8.2 IT IS THE CASE OF THE REVENUE THAT THE CIT(A) INSTEAD OF ANNULLING THE ASSESSMENT SHOULD HAVE REMITTED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR GIVING OPPORTUNITY TO THE ASS ESSEE TO SUBSTANTIATE HIS CASE. WE FIND MERIT IN THE ABOVE ARGUMENTS ADV ANCED BY THE LD. DEPARTMENTAL REPRESENTATIVE. ADMITTEDLY, THE ASSES SEE HAD NEITHER FILED HIS RETURN OF INCOME NOR FURNISHED THE REQUISITE DE TAILS AS PER THE 2 PREVIOUS NOTICES. NO DOUBT THE ASSESSING OFFICER H AD PASSED THE ORDER ON 24-12-2007 WHEREAS THE ASSESSEE WAS REQUIRED TO PRODUCE THE REQUISITE DETAILS BEFORE HIM ON 28-12-2007, THEREFO RE, THERE MAY BE VIOLATION OF PRINCIPLES OF NATURAL JUSTICE. HOWEVE R, THE SAME UNDER THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE CANNOT MAKE THE ASSESSMENT VOID AB-INITIO. THE ASSESSMENT ORDER PASSED BY THE AO IN OUR OPINION MAY BE IRREGULAR BUT UNDER THE FACTS AND CIRCUMSTAN CES CANNOT BE SAID TO BE ILLEGAL. SINCE THE ASSESSEE DID NOT COOPERATE TO THE VARIOUS NOTICES ISSUED BY THE ASSESSING OFFICER HE PASSED THE ORDER U/S.144 DETERMINING THE INCOME AT RS.60,45,190/-. WE FIND THE LD.CIT(A ) ALTHOUGH CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER HAD NEIT HER DIRECTED THE ASSESSING OFFICER TO VERIFY THE BOOKS OF ACCOUNT NO R THE ASSESSEE PRODUCED SUCH BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER. THEREFORE, THE BOOKS OF ACCOUNT OF THE ASSESSEE REM AINED UNVERIFIED BOTH BY THE ASSESSING OFFICER AS WELL AS BY THE CIT(A). THE LD.CIT(A) HAS NOT GONE THROUGH THE BOOKS OF ACCOUNT AND HE HAS SI MPLY ANNULLED THE ASSESSMENT BECAUSE OF VIOLATION OF PRINCIPLES OF NA TURAL JUSTICE. 10 8.3 WE FIND THE HONBLE MADRAS HIGH COURT IN THE CA SE OF ANAIMUGAN TRANSPORTS PVT. LTD. (SUPRA) HAS OBSERVED AS UNDER : THERE IS ANOTHER MISTAKE, IT APPEARS, FOUND IN THE A PPROACH OF THE ASSESSEE TO THE ORDER OF ASSESSMENT WHICH UNFORTUNATELY HAS FOUND ACCEPTANCE BY THE TRIBUNAL. IT WILL BE CORRECT NO D OUBT TO SAY THAT THE INCOME TAX OFFICER HAD COMMITTED A SERIOUS ERROR OF L AW AND SINCE THE ERROR WENT TO THE ROOT OF THE ASSESSMENT BY HIM, THE EN TIRE PROCEEDING LEADING TO THE ORDER BY HIM FOR THE ASSESSMENT YEAR 19 74-75 WAS VOID. THAT, HOWEVER, CANNOT MEAN THAT THERE WAS NO ORDER O F ASSESSMENT AT ALL AND REMOVAL OF SUCH ORDER OF ASSESSMENT FROM THE FILE WI LL LEAVE THE ASSESSEE WITH THE SO CALLED RETURN FILED BY HIM UNDER SEC TION 139(1) OF THE ACT AND SINCE NO ORDER OF ASSESSMENT FOR THE ASSESSMENT YEAR 1973- 74 WAS MADE WITHIN THE PERIOD OF LIMITATION, THE ASSESSE E BECAME FREE OF ANY CHARGE AND CEASED TO HAVE ANY LIABILITY TO PAY T HE TAX AND IF AT ALL ILLEGALLY ASSESSED, AS SUGGESTED BEFORE US, NO LIABILITY EX ISTED AND ITS REALISATION BECAME TIME BARRED. A PERSON AUTHORISED BY LAW TO MAKE AN ORDER MAY MAKE A RIGHT ORDER AS WELL AS A WRONG ORDER . EVEN A SUPERIOR OFFICER WHO HAS FOUND THAT THE ORDER HAS BEEN WRONGLY MADE BY ANY AUTHORITY SUBJECT TO ITS APPELLATE OR REVISIONAL JURI SDICTION, CANNOT TAKE AWAY THE VERY DOING OF THE ACT BY HIM. IT WILL ONLY NULLIFY THE ORDER AND NOT THE ACT OF MAKING THE ORDER. THE APPELLATE OR R EVISIONAL ORDER WILL NO DOUBT SUBSTITUTE THE ORIGINAL ORDER. UNFORTUNATELY, I N THE INSTANT CASE, THE TRIBUNAL HAS MADE NO ORDER OF ITS OWN AND HAS ALSO NOT MADE ANY ORDER OF REMAND TO THE INCOME TAX OFFICER TO TREAT THE RE TURN AS FILED BY THE ASSESSEE FOR THE YEAR OF ASSESSMENT 1973-74. THIS MISTAKE HAS BENEFITED THE ASSESSEE IN MORE THAN ONE WAY. IT HAS ALMOST ESCAPED T HE ASSESSMENT FOR THE YEAR 1973-74 IN SPITE OF TAXABLE INCOME, WHI CH IT HAS ITSELF ADMITTED AND WHICH IT HAD NOT DISCLOSED IN ITS FIRST RE TURN. THIS HAS CONFUSED ALTOGETHER WHETHER THERE WAS ANY INCOME WHIC H COULD BE TAXED IN THE ASSESSMENT YEAR 1974-75. WE HAVE RECORDED THIS WI TH CONCERN BECAUSE THE INTEREST OF THE REVENUE IN ALL RESPECTS IS THE INTEREST OF THE PUBLIC. EVERY PERSON CHARGEABLE TO INCOME TAX IS EXPE CTED TO HONESTLY DISCLOSE HIS INCOME AND PAY THE TAX. IT IS ONLY IN A CA SE WHERE DOUBTS ARE RAISED OR RETURNS ARE FILED IN IRREGULAR MANNER AS IN THE INSTANT CASE, THE ASSESSEE FILED A NIL RETURN FOR THE SAME FINANCIAL YEAR FOR WHICH LATER IT FILED A RETURN OF TAXABLE INCOME, PUBLIC INTEREST IS AFFECTED AND OFFICERS ARE REQUIRED TO EXERCISE THIS JURISDICTION FOR THE CERTIFI CATION OF THE CORRECTNESS OR COMPLETENESS OF THE RETURN OR BEST JUDGME NT ASSESSMENT, ETC. NO HONEST TAXPAYER SHOULD BE ASKED TO PAY MORE, B UT NO ONE ELSE SHOULD BE ALLOWED TO ESCAPE TAX BY TAKING RECOURSE TO QUESTIONABLE METHODS. IT WILL BE ALWAYS PROPER AND NECESSARY, THEREF ORE, THAT IN CASE OF DOUBTS AS TO THE VERACITY OF THE RETURN, WHILE EVERY OPPORTUNITY IS GIVEN TO THE ASSESSEE, DELAYS AND LAPSES ARE AVOIDED, WHICH GIVE BENEFIT TO NO ONE EXCEPT THE UNSCRUPULOUS ASSESSEES. 8.4 SINCE THE ASSESSEE HAS TAXABLE INCOME AND HAS N OT FILED ANY RETURN OF INCOME, THEREFORE, ANNULLING THE ASSESSMENT WILL DEPRIVE THE REVENUE FROM ITS LEGITIMATE DUE WHICH INTURN WILL AFFECT TH E WELFARE MEASURES TAKEN BY THE GOVERNMENT. IN THE NAME OF TECHNICALI TIES THE ASSESSEE 11 CANNOT BE GIVEN A FREE HAND. THEREFORE, THE CIT(A) IN THE INSTANT CASE, WHOSE POWERS ARE COTERMINOUS WITH THAT OF THE ASSES SING OFFICER, SHOULD HAVE EITHER EXAMINED THE BOOKS OF ACCOUNT HI MSELF OR DIRECTED THE ASSESSING OFFICER TO VERIFY THE SAME IN THE REMAND PROCEEDINGS. WE, THEREFORE, DO NOT AGREE WITH THE FINDING OF THE LD. CIT(A) HOLDING THAT THE ENTIRE ASSESSMENT IS ANNULLED FOR VIOLATION OF PRIN CIPLES OF NATURAL JUSTICE. IN THIS VIEW OF THE MATTER, WE SET-ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSIN G OFFICER WITH A DIRECTION TO FRAME THE ASSESSMENT DENOVO. THE ASSE SSING OFFICER SHALL GIVE ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASS ESSEE AND DECIDE THE ISSUE AS PER FACTS AND LAW. WE HOLD AND DIRECT ACC ORDINGLY. GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY ALLOWED FOR S TATISTICAL PURPOSES. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 21-01-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE, DATED : 21 ST JANUARY 2014 SATISH COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A) CENTRAL, PUNE 4. THE CIT CENTRAL, PUNE 5. D.R. B BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE