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Issues involved:
The judgment involves issues related to additions made by the Assessing Officer, validity of reassessment under section 147, admissibility of additional grounds of appeal, and the legality of proceedings initiated to circumvent time-barred assessment. Additions made by Assessing Officer: The appeal was filed against additions totaling Rs. 2,89,125 on account of unexplained cash credit, Rs. 1,50,000 peak of unexplained cash credit in the name of a specific entity, and Rs. 10,00,000 based on a promissory note treated as unaccounted loan. The appellant contended that full legal burden was discharged in proving the genuineness of the transactions. Validity of reassessment under section 147: The original assessment was quashed due to late initiation of proceedings under section 143(2). The reassessment under section 147 was challenged as an attempt to circumvent the time-barred assessment. The Tribunal held that the reassessment was illegal, without jurisdiction, and bad in law, as it was initiated to extend the limitation period impermissibly. Admissibility of additional grounds of appeal: The assessee raised additional grounds of appeal, which were contested by the Departmental Representative. The Tribunal admitted the additional grounds based on the decision of the Hon'ble Supreme Court, emphasizing the importance of substantial justice. Legality of proceedings to circumvent time-barred assessment: The Tribunal concluded that the proceedings under section 147 were initiated to circumvent the time-barred assessment, rendering them illegal and without jurisdiction. The reassessment was deemed void ab initio, leading to the automatic deletion of any additions made during that assessment. Conclusion: The Tribunal allowed the appeal of the assessee, declaring the reassessment as void ab initio and deleting all additions made during that assessment. The judgment highlighted the importance of adhering to legal procedures and jurisdictional boundaries in tax assessments.
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