High Court Of Andhra Pradesh
CIT Vs. Vimal Chand Jain
Section : 158B
L. Narasimha Reddy And M.Satyanarayana Murthy, JJ.
IT Tribunal Appeal Nos. 114 & 123 Of 2001 And 33 Of 2002
July 2, 2014
JUDGMENT
L. Narasimha Reddy, J. – These three appeals filed under section 260A of the Income-tax Act, 1961 (for short, “the Act”) arise under similar circumstances. Hence, they are disposed of through a common order.
2. The Revenue is the appellant. The respondents are the assessee under the Act. The searches were conducted on November 30, 1996, for the preceding ten years. In the course of block assessment, it was found that the respondents have paid advance tax for some assessment years but did not file returns. The Assessing Officer took the view that the income for the corresponding years for which the returns were not filed partakes of the character of undisclosed income and, accordingly, tax was levied. Aggrieved by that and other measures taken by the Income-tax Officer (ITO) in the respective orders of assessments, the respondents preferred the appeals before the Tribunal. Through its orders under appeals, the Tribunal accepted the contention of the respondents, namely, that the failure to file a return by the assessee, who paid the advance tax, cannot lead to a situation of treating the income as the undisclosed one. Reliance was placed upon an order passed by itself in relation to another case. On certain other aspects, the Tribunal rejected the contention of the respondents.
3. Heard Sri J. V. Prasad, learned counsel for the appellants, and Sri S. Ravi, learned senior counsel for the respondents.
4. The principal contention urged on behalf of the appellants is that the view taken by the Tribunal, as to the manner in which the income of an assessee for an assessment year as regard which the returns were not filed, albeit the advance tax paid is contrary to law. It is urged that the failure to file income-tax return may itself lead to the conclusion of non-disclosure of income for the corresponding year and mere payment of the advance tax does not change the situation. Reliance is also placed upon the recent judgment of the hon’ble Supreme Court in Asstt.CIT v. B. R. Shah [2013] 350 ITR 489 (SC).
5. In the block assessment undertaken against the respondents, several aspects cropped up. One of it was about the manner in which the income for a year as regards which the returns were not filed, must be treated. The respondents appeared to have remained a bit complacent on the ground that they have already paid the advance tax. The payment of advance tax by itself does not absolve the obligation of an assessee to file returns. It is only when a return is filed, that an Assessing Officer would be in a position to examine the details of income, expenditure and deductible incomes, etc.
6. There existed some lack of clarity in law on this aspect, when the Tribunal decided the matter. That ambiguity is set at rest with the judgment of the hon’ble Supreme Court in B. R. Shah’s case (supra). Their Lordships held that payment of advance tax does not absolve an assessee from an obligation to file return disclosing total income for the relevant assessment year. The consequences would be that income for that year would be treated as an undisclosed one. On this short point, the appeals deserve to be allowed. However, allowing of appeals would not put the controversy at rest. The other details have to be worked out. It is too well known that even where a block assessment is made under Chapter XIV-B of the Act, the assessment must be made as if it is an ordinary one. Section 158BH of the Act mandates this. Remand becomes necessary for working out the details.
7. While accepting the contention of the respondents as regards the manner in which the income for a year for which no declaration was filed even after paying the advance tax, the Tribunal rejected the contention of the respondents on certain other aspects. Once we feel it appropriate to remand the matter to the Tribunal, it is essential that the remand is on all the controversies or issues. It is difficult to segregate the issues or to treat the findings on them as final. It is not uncommon that the finding on one issue would have its impact on the other. Now, that the view taken by the Tribunal on an important aspect is not found to be correct, the remaining issues also must be examined afresh.
8. We, therefore, allow the appeals and set aside the respective orders under appeals. The matters are remanded to the Tribunal for fresh consideration and disposal on every aspect that is urged before it, duly giving opportunity to both the parties. There shall be no order as to costs.
9. The miscellaneous petitions, if any, filed in these appeals shall stand disposed of.
[Citation : 367 ITR 290]
