In case of admitted income, it is not for the Assessing Officer to establish the evidentiary basis thereof – High Court
In a recent judgment, the Hon’ble High Court has held that in the case of admitted income, it is not for the Assessing Officer to establish the evidentiary basis thereof.
ABCAUS Case Law Citation:
5053 (2026) (02) abcaus.in HC
In the instant case, the assessee had challenged the order passed by the ITAT in upholding income merely based on the statement obtained under Section 133A and return of income, without any corroborative evidences or adverse finding against the appellant.
The appellant assessee was engaged in the business of real estate. The return of income was selected for scrutiny to verify the payment of tax in cash during the demonetization period.
A survey under Section 133A of the Income Tax Act, 1961 (the Act) was conducted and in pursuant thereto, the assessee, by letter volunteered to offer an additional income.
The Assessing Officer (AO) completed the assessment by inter alia treating the income so declared as income from other sources and subjected the same to tax under Section 115BBE of the Act.
The CIT(A) / NFAC dismissed the appeal. Further aggrieved, the assessee preferred an appeal before the Tribunal.
Before the Tribunal, the assessee contended that the provisions of Section 115BBE of the Act were not applicable insofar as the additional income was concerned. It was further contended that the additional income was offered in the absence of any incriminating material or supporting evidence and, therefore, was not exigible to tax. It was submitted that the said income was offered solely on the basis of an admission made during the course of the survey proceedings.
The Tribunal, however, held that since the said income was voluntarily offered by the assessee and the return of income was filed after the survey admitting such income, the assessee was not entitled to seek exclusion of the admitted income.
Before the Hon’ble High Court the assessee contended that the additional income was admitted in the return on account of coercion exercised during the course of the survey and on the basis of the letter which was forcibly obtained by the Assessing Officer.
However, the Hon’ble High Court rejected the contention observing that the assessee filed the return of income under Section 139(1) of the Act and had the statutory opportunity to revise the return under Section 139(5) of the Act. Admittedly, the assessee neither retracted the letter admitting the additional income nor revised the return of income. The assessee also paid tax on the income so admitted. Even assuming such coercion, nothing prevented the assessee from raising the said issue before the Assessing Officer, which the assessee consciously chose not to do.
The Hon’ble High Court further observed that in the present case, the assessee did not raise the plea of non-taxability of the additional income either before the Assessing Officer or before the CIT(A). The ground urged before the CIT(A) was confined to the applicability of Section 115BBE of the Act and not to the taxability of the additional income per se. For the first time before the Tribunal, the assessee sought to contend that the additional income admitted was not taxable.
The Hon’ble High Court opined that If the admitted income is permitted to be questioned for the first time at the stage of the Tribunal, it would undermine the finality and sanctity attached to admissions made in the return of income.
The Hon’ble High Court further noted that throughout the proceedings, the assessee consciously canvassed that the additional income be taxed at the normal rate instead of the special rate of 60% under Section 115BBE of the Act. Such conduct clearly demonstrated that the assessee entertained no doubt regarding the taxability of the additional income voluntarily and consciously offered in the return of income after due verification.
The Hon’ble High Court opined that there were no justifiable grounds to support the contention that the additional income offered was not based on evidence. In the case of admitted income, it is not for the Assessing Officer to establish the evidentiary basis thereof. The income is admitted by the assessee on the basis of self assessment, and such burden cannot be shifted to the Assessing Officer.
The Hon’ble High Court held that the findings recorded by the Tribunal were based on the facts of the case and constituted findings of fact. No perversity was demonstrated so as to give rise to any substantial question of law for consideration.
Accordingly, the appeal was dismissed.
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