2009 (6) TMI 1013 - AT - Income Tax

Summary

Issues involved:
The issues involved in this case are the validity of the order of the CIT (Appeals), the legality of proceedings u/s 148 of the Income Tax Act, and the addition of Rs. 9,00,000 as proposed by the Assessing Officer.

Validity of CIT (Appeals) Order:
The appeal was filed against the order of the CIT (Appeals)-XIX, New Delhi dated 07.07.2009 for the assessment year 2001-02. The original grounds challenged the order on the basis of being bad both on law and facts. The appellant also contended that the order was perverse and failed to address the issue of the alleged information forming the basis for initiating action u/s 148. The appellant sought various reliefs, including challenging the validity of the CIT (Appeals) order.

Legality of Proceedings u/s 148:
The notice u/s 148 was issued to the assessee on 22.3.2008 after recording reasons and obtaining approval of the CIT concerned. The appellant argued that the notice was served beyond the six-year period, but it was dispatched on time. The Tribunal held that the notice was issued and dispatched within the statutory time limit of six years from the end of the relevant assessment year. The notice was based on specific information regarding accommodation entries received by the Assessing Officer, justifying the reasonable belief for issuing the notice u/s 148. The Tribunal found no fault in the CIT (A) order dismissing the appeal on the issue of initiating proceedings u/s 148.

Addition of Rs. 9,00,000:
The appellant raised an additional ground challenging the addition of Rs. 9,00,000 confirmed by the CIT (A). The Tribunal admitted this ground for proper adjudication, emphasizing that denial of admission would amount to denial of justice. The CIT (A) had dismissed the appeal due to the lack of a confirmation letter from M/s. Chanakya Finvest Pvt. Ltd., for which the credit appeared in the assessee's books. The Tribunal directed the issue of the addition of Rs. 9,00,000 to be sent back to the Assessing Officer for fresh consideration after providing the assessee with adequate opportunity.

Conclusion:
After considering all arguments, the Tribunal partly allowed the appeal for statistical purposes, setting aside the issue of the addition of Rs. 9,00,000 for reassessment by the Assessing Officer. The order was pronounced on the 8th day of June 2009 after the conclusion of the hearing.