- (1.) The present petition has been filed at the instance of the assessee seeking therein quashing of the notice dated 24.10.2014, issued under Section 148 of the Income Tax Act, 1961 (for short the "Act") and order dated 16.04.2015, whereby the petitioner's objections to the aforesaid notice were rejected.
(2.) For the assessment year 2010-11 the petitioner filed its return, declaring therein an income of Rs.89,73,250/-. The return was processed under Section 143(1) of the Act. The case was selected for scrutiny. On being asked to produce its records, the assessing officer was informed on behalf of the petitioner that the same was not available as it had been destroyed in a fire which took place in the premises of the petitioner on 10.05.2011. A First Information Report (FIR) in that regard lodged by the petitioner with the police was also produced. After noticing the destruction of the record in the fire, the assessing officer perused the profit and loss account for the relevant year and finding expenses under certain heads like business, promotions & conveyance expenses, travelling incentives etc. to be on the higher side when compared to the previous assessment year, made a disallowance of a lump sum amount of Rs.10,00,000/-.
(3.) On 03.03.2014, audit objections were raised with regard to the petitioner's assessment to tax for the relevant assessment year. The audit objections were as under: - "During the course of audit, it has been noticed that the auditor vide para 27 of the audit report has been reported that provisions of chapter XVII b has not been complied with. In the profit and loss account, the assessee debited following expenses on which TDS provisions are applicable: - JUDGEMENT_278_LAWS(P&H)9_2016.html No ledger accounts of the above expenses are available on record to ascertain as to whether the TDS was deducted by the assessee or not Keeping in view the certificate of the auditor, it seen that TDS was not deducted by the assessee and therefore the same is liable to be disallowed under section 40(a)(ia) of the Income Tax Act, 1961. In the balance sheet, the assessee has shown Rs.12,28,313 as TDS expenses payable. No proof of payment of TDS to the central Govt. account is available on record, therefore, the same are not allowable expenses u/s 43B of the Income Tax Act, 1961. The above discrepancies resulted into under assessment to the tune of Rs.5,81,62,260/- involving tax effect of Rs.1,79,73,138/-. Reference: - The annexure to the balance sheet such as security deposits, loan and advances, secured loan, current liabilities are not found available on record. The AO requested to examine as to whether any loan or advances or the security deposits are for the business purposes or not -;