MADAN MOHAN TIWARI, NEW DELHI V. ITO, WARD- 29(3), NEW DELHI

ITA 7041/DEL/2018

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Shri Madan Mohan Tiwari, a mechanical engineer engaged in technical and marketing consultancy, faced reassessment of his income for several assessment years due to non-filing of returns and high gross receipts as per Form 26AS. The Income Tax Department initiated reassessment proceedings, and Tiwari contested the reopening and the assessment of his income. The Tribunal found that the Assessing Officer had valid reasons to reopen the assessments and directed that the income be assessed on a presumptive basis at 8% of the gross receipts, as declared in Form 26AS, after allowing necessary deductions and credits.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300926 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: E
• Next Hearing Date: 04-07-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 04-11-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MADAN MOHAN TIWARI
• Keywords: Reopening of assessment; Reassessment proceedings; TDS; FORM 26AS
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No. 7041/DEL/2018 [A.Y. 2009-10] ITA No. 7042/DEL/2018 [A.Y. 2010-11] ITA No. 7043/DEL/2018 [A.Y. 2011-12] ITA No. 7044/DEL/2018 [A.Y. 2013-14] Shri Madan Mohan Tiwari Vs. The I.T.O J – 145, Kalkaji Ward – 29(3) New Delhi New Delhi PAN: AEQPT 1521 F (Applicant) (Respondent) Assessee By : Shri Madan Mohan Tiwari [Assessee in person] Department By : Shri M.K. Pandey, Sr. DR Date of Hearing : 05.07.2023 Date of Pronouncement : 07.07.2023 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- The above captioned four separate appeals by the assessee are preferred against four separate orders of the ld. CIT(A) – 31, New Delhi dated 09.10.2018 pertaining to Assessment Years 2009-10, 2010-11, 2 2011-12 and 2013-14 respectively. All these appeals were heard together and are disposed of by this common order for the sake of convenience and brevity. 2. Briefly stated, the facts of the case are that the assessee is a graduate in Mechanical Engineering and is engaged in technical and marketing consultancy operation since 1982. He has been carrying out the said consultancy from his residential premises located at Kalkaji, New Delhi. 3. Pursuant to some case in Hyderabad, a survey action was taken at the premises of the assessee on 23.04.2012. In his statement, the assessee claimed that he has filed his returns declaring income at 8% of gross receipts on presumptive basis. However, he could not produce proof of filing of his returns and when asked to produce the books of account, expenditure vouchers and correspondence made by him in rendering services to clients, the assessee stated that the same are maintained in internet and gave evasive replies to various specific questions. 3 4. Admittedly, the assessee is not maintaining any books of account as he could not produce any document in support of various claims made during survey proceedings with regard to maintenance of books of account and record. 5. With this background, we will now address to each appeal. ITA No. 7041 & 7042/DEL/2018 [A.Ys 2009-10 and 2010-11] 6. First challenge is in respect of reopening of assessment. 7. The assessee strongly contended that the Assessing Officer had no reason to issue notice u/s 148 of the Act. It is the say of the assessee that the Assessing Officer has erroneously taken the entire contract receipts as undisclosed income of the assessee and, therefore, reopening of the assessee is bad in law. 8. We have carefully considered the submissions made by the assessee. The reason for reopening assessment is that on going through the AST System, the Assessing Officer found that the assessee has not filed his return of income for the A.Ys 2009-10 and 2010-11 and 4 on examining Form 26AS, it was found that the assessee has total receipt of Rs. 40 lakhs in A.Y 2009-10 and Rs. 70,83,105/- in A.Y 2010- 11. 9. Because the assessee has not filed his return of income and because the gross receipts of the assessee were very high, the Assessing Officer assumed jurisdiction u/s 148 of the Act and initiated reassessment proceedings. There is no error or infirmity in this action of the Assessing Officer. This ground taken in A.Ys 2009-10 and 2010- 11 is dismissed. 10. Pursuant to the notice, the assessee declared income of Rs. 3.04 lakhs in A.Y 2009-10 and Rs. 2.12 lakhs in A.Y 2010-11. 11. The assessee, before us, submitted that income has been returned on presumptive basis which is @ 8% of the gross receipts for the impugned years. 5 12. We find that in the impugned years i.e. 2009-10 and 2010-11, gross receipts as per Form 26AS is Rs. 40 lakhs and Rs. 70,73,100/- respectively. The bench asked the assessee to reconcile the receipts shown by him in his return of income and receipts as per Form 26AS. The assessee showed his inability. 13. When the bench pointed out that let the Assessing Officer verify and examine the reconciliation, the assessee reluctantly once again showed his inability and insisted the bench to decide the quarrel here itself. 14. Considering the history of the assessee, we are left with no choice but to accept the gross receipts shown in Form No. 26AS as true and correct as on such receipts, payers have deducted tax at source and the assessee has claimed the same as prepaid taxes. As mentioned hereinabove, gross turnover in A.Ys 2009-10 is Rs. 40 lakhs and in A.Y 2010-11 Rs. 70,73,100/-. 15. Applying the profit rate of 8%, profit comes to Rs. 3,20,000/- in A.Y 2009-10 and Rs. 5,65,848/- in A.Y 2010-11 respectively. 6 16. The Assessing Officer is directed to frame assessment at these incomes and allow the claim of deduction under Chapter VIA, details of which shall be provided by the assessee. The Assessing Officer is also directed to give credit of TDS as per Form 26AS. ITA No. 7043/DEL/2018 [ A.Y 2011-12] 17. First challenge is regarding reopening of assessment. 18. The reason for reopening assessment is that on examination of Form 26AS, the Assessing Officer found that the assessee has total receipt of Rs. 88,76,000/-. The assessee has filed return of income declaring income of Rs. 3,72,000/- and claimed refund of Rs. 5,55,964/-. 19. On the basis of information provided by the Additional CIT, Range – 1, Hyderabad and on finding that the assessee has receipts of Rs. 88.76 lakhs, we are of the considered opinion that the Assessing Officer has sufficient cause for assuming jurisdiction u/s 148 of the Act and initiating reassessment proceedings. Challenge to the reopening of the assessment is dismissed. 7 20. On merits, we are of the considered view that the entire receipts shown in Form No. 26AS cannot be income of the assessee since in A.Y 2009-10 and 2010-11, we have accepted the net profit rate of 8% as applied by the assessee to his gross receipts. We direct the Assessing Officer to assess the gross receipts as per Form 26AS at Rs. 88.76 lakhs at 8% which comes to Rs. 7,10,080/-. The Assessing Officer is further directed to allow deduction under Chapter VIA for which necessary details shall be provided by the assessee and allow tax credit for prepaid taxes as per Form 26AS. ITA No. 7044/DEL/2018 [A.Y 2013-14] 21. Facts are no different from the facts discussed hereinabove to the gross receipts as per Form 26AS is Rs. 73,27,020/-. Applying net profit rate of 8%, net profit comes to Rs. 5,86,161/-. The Assessing Officer is directed to assess the gross receipts of business/vocation at this figure. If the assessee has any other income, that should be added and deduction u/s Chapter VIA should be allowed for which the assessee shall furnish details. The Assessing Officer is directed to give credit of prepaid taxes as reflected in Form 26AS. 8 22. In the result all the four appeals of the assessee in ITA Nos. 7041 to 7044/DEL/2018 are partly allowed. The order is pronounced in the open court on 07.07.2023. Sd/- Sd/- [ASTHA CHANDRA] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07 th JULY, 2023. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 9 Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order