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2013 (9) TMI 47 - AT - Income TaxNotice u/s 148 - Sanction of appropriate authority - Violation u/s 151(2) - Scope of Section 292BB - Benamidar - Benami Business in the name of other - Held that - On perusal of the sanction taken u/s 151(2) of the Act before issuance of notice u/s 148, the ground has been taken by the assessee without consulting the assessment record, which in fact, should not have been taken. In any case, there is no violation as contemplated u/s 151(2) of the Act - Decided against Assessee. Scope of Section 292BB - Notice under Section 148 of the Act was issued to the assessee which was duly served. In pursuance to the said notice, the assessee appeared before the assessing authority and participated in the re-assessment proceedings on various dates and also cross-examined the witnesses who were summoned and their statements were recorded - According to this provision, where an assessee appears in any proceedings or cooperates in any enquiry relating to assessment or reassessment proceedings, it shall be presumed that the assessee has been validly served and it shall not be open to the assessee to object that the notice was not served upon him or was not served in time or was served upon him in an improper manner. However, an exception to the aforesaid presumption has been made in a case where such objection has been raised before completion of assessment or reassessment. The provision has been made effective from 1.4.2008 and therefore, shall apply to all pending proceedings - It is not disputed that the assessee had appeared before the AO on various dates and participated in the reassessment proceedings before the finalization and no objection regarding issuance and service of notice under Section 143(2) was raised before the AO - Following decision of CIT vs. Ram Narain Bansal 2011 (7) TMI 527 - Punjab and Haryana High Court - Decided against assessee. Unexplained investment u/s 69 - Amount deposited to bank - Benami transaction - Held that - assessee substantiating his bonafides had duly brought it to the notice of the various authorities before whom the proceedings had been going on, that the said misusing of the Bank account in itself stood substantiated from the very fact that a perusal of the Withdrawals effected from the said account, as a result stands gathered on a perusal of the Cheques vide which withdrawals had been made from the said Bank account of the assessee, in itself reveals that there was not even a Solitary situation , wherein any withdrawal pertaining to the impugned amounts so credited to the bank a/c on the assessee was ever carried out by the assessee and the said factual matrix had been appreciated by the other such authorities before whom the proceedings as regards the aforesaid issue are going on. Facts therein itself establishes the bonafides of the assessees contention that the latter was not in any way connected but through out remained unaware of such misuse of his Bank a/c by certain third parties - approach of the A.O. in going by the impugned statement of the said Sh.Satbir Singh wherein the latter, merely in order to save his skin had falsely implicated the assessee, by saying that he had given signed Blank cheques to the assessee. The acceptance of the said statement of the said Sh. Satbir Singh by the A.O. wherein the said person in order to save himself had pleaded that he was poor person and could not carry out such a business, without there being any evidence which could go to substantiate the latters assertions and contentions and therein giving him a clean chit and drawing of adverse inferences in the hands of the assessee, primarily on the basis of the statement of Sh. Satbir Singh, is totally unfair and cannot be sustained in the eyes of law., specifically when the said Sh. Satbir Singh is a prime accused before the Custom Authorities . Thus, framing of Substantive assessment in the hands of the assessee, by presuming that it was the latter who was carrying on the business and the said Sh. Satbir Singh was only a benamidar is an assumption of the AO , which is devoid and bereft of any force, in the absence of any documentary evidence - Therefore, decided in favour of assessee.
Issues Involved:
1. Validity of the jurisdiction assumed by the Assessing Officer (A.O.) under Section 147 of the Income Tax Act. 2. Validity of the assessment framed without issuing a notice under Section 143(2) of the Income Tax Act. 3. Legitimacy of the addition of Rs. 4,05,000/- and Rs. 1,27,75,000/- made by the A.O. under Section 69A of the Income Tax Act. 4. Allegations of violation of the principles of natural justice and fairness by the CIT(A). Issue-wise Detailed Analysis: 1. Validity of the jurisdiction assumed by the A.O. under Section 147 of the Income Tax Act: The assessee contended that the A.O. wrongly assumed jurisdiction and initiated proceedings under Section 147 without obtaining the necessary sanction under Section 151(2). The tribunal admitted this legal ground based on the Supreme Court decision in National Thermal Power Co. Ltd. vs. CIT. However, the A.O. provided evidence of obtaining the necessary sanction, and the tribunal found no violation of Section 151(2). Consequently, the tribunal dismissed this ground, stating that the assessee should have consulted the assessment record before raising this issue. 2. Validity of the assessment framed without issuing a notice under Section 143(2) of the Income Tax Act: The assessee argued that the A.O. erred in law by framing the assessment without issuing a notice under Section 143(2). The tribunal noted that the assessee participated in the assessment proceedings without raising any objection about the non-issuance of the notice. Citing the Supreme Court decision in ACIT vs. Hotel Blue Moon and the Punjab & Haryana High Court decision in CIT vs. Ram Narain Bansal, the tribunal held that non-issuance of notice under Section 143(2) is not fatal if the assessee participated in the proceedings. Thus, the tribunal dismissed this ground as well. 3. Legitimacy of the addition of Rs. 4,05,000/- and Rs. 1,27,75,000/- made by the A.O. under Section 69A of the Income Tax Act: The A.O. made additions of Rs. 4,05,000/- and Rs. 1,27,75,000/- to the assessee's income, considering them as unexplained money under Section 69A. The assessee argued that these amounts were transferred from the bank account of M/s. Meghna Impex, owned by Sh. Satbir Singh, and that the cheque books were stolen and misused by unknown persons. The tribunal found that the A.O. did not make proper inquiries to ascertain the real ownership of the funds and relied on the statement of Sh. Satbir Singh without substantial evidence. The tribunal held that the amounts should not be taxed in the hands of the assessee, as the deposits were explained to have originated from M/s. Meghna Impex. Therefore, the tribunal directed the deletion of the additions. 4. Allegations of violation of the principles of natural justice and fairness by the CIT(A): The assessee claimed that the CIT(A) acted in gross violation of the principles of natural justice and fairness by sustaining the assessment based on assumptions and presumptions. The tribunal noted that the CIT(A) dismissed the assessee's objections without proper consideration of the evidence and explanations provided. The tribunal found the CIT(A)'s approach arbitrary and not supported by concrete material. Consequently, the tribunal allowed the assessee's grounds related to the violation of natural justice and fairness. Conclusion: The tribunal concluded that the appeals filed by the assessee were partly allowed. The tribunal dismissed the grounds related to the jurisdiction under Section 147 and the non-issuance of notice under Section 143(2). However, the tribunal allowed the grounds related to the additions under Section 69A and the violation of the principles of natural justice and fairness, directing the deletion of the additions made by the A.O.
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