Advance Tax paid -Non filing of returns - whether amounts to undisclosed income or not - depends on various facts - though does not absolve the liability of filing returns- for some years out 10 years block assessment, returns not filed - A.O. viewed that it was characterized as undisclosed income - Tribunal held 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 - their lordships held that Honble Supreme Court in B.R. Shahs case (supra). 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. or not depends upon various factors - Remanded the case for fresh disposal to Tribunal as the other details have to be worked out. It is too well known that even where a block assessment is made under Chapter XIVB 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. = I.T.T.A. Nos.114 OF 2001 02-07-2014 The Commissioner of Income Tax, Andhra Pradesh - II, Hyderabad .. Appellant Mr. Vimal Chand Jain, H.No.15-9-406, Afzalgunj, Hyderabad.. Respondent = 2014- july.part - http://judis.nic.in/judis_andhra/filename=11699

 Advance Tax paid -Non filing of returns - whether amounts to undisclosed income or not - depends on various facts - though does not absolve the liability of filing returns-   for some years out 10 years block assessment, returns not filed - A.O. viewed that it was characterized as undisclosed income - Tribunal held 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 - their lordships held that Honble Supreme Court in B.R. Shahs case (supra).
 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. or not depends upon various factors - Remanded the case for fresh disposal to Tribunal as the other details have to be worked out.  It is too well known that even where a block assessment is made under Chapter XIVB 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. 
The searches were conducted on 30.11.1996 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 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 assessment, 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. =

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.
      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 Honble Supreme Court in B.R. Shahs 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 XIVB 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. 
      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.
      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.
      The miscellaneous petitions, if any, filed in these appeals
shall stand disposed of.    

        2014- july.part - http://judis.nic.in/judis_andhra/filename=11699               

THE HONBLE SRI JUSTICE L.NARASIMHA REDDY AND THE HONBLE SRI JUSTICE M.SATYANARAYANA MURTHY                

I.T.T.A. Nos.114 OF 2001

02-07-2014

The Commissioner of Income Tax, Andhra Pradesh - II, Hyderabad  ..  Appellant      

Mr. Vimal Chand Jain,  H.No.15-9-406, Afzalgunj, Hyderabad.. Respondent

Counsel for the Appellant :  Sri J.V. Prasad

Counsel for Respondent :  Sri S. Ravi

<Gist :

>Head Note :

? Citations:
 (2013) 350 ITR 489 (SC)

THE HONBLE SRI JUSTICE L.NARASIMHA REDDY        
AND
THE HONBLE SRI JUSTICE M. SATYANARAYANA MURTHY            

I.T.T.A. Nos.114 AND 123 of 2001, AND I.T.T.A.No.33 OF 2002

COMMON JUDGMENT: (Per Honble Sri Justice L. Narasimha Reddy)    
      These three appeals filed under Section 260-A of the Income
Tax Act, 1961 (for short, the Act) arise under similar circumstances.
Hence, they are disposed of through a common order.
      The Revenue is the appellant.  The respondents are the assesses
under the Act.  The searches were conducted on 30.11.1996 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 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 assessment, 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.
      Heard Sri J.V. Prasad, learned Counsel for the appellants, and
Sri S. Ravi, learned Senior Counsel for the respondents.
      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 Honble
Supreme Court in Commissioner of Income Tax v. B.R.Shah and  
others .
      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.
      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 Honble Supreme Court in B.R. Shahs 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 XIVB 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. 
      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.
      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.
      The miscellaneous petitions, if any, filed in these appeals
shall stand disposed of.                                      
____________________  
L. NARASIMHA REDDY, J.    
_______________________  
M. SATYANARAYANA MURTHY, J.      
02.07.2014 

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