2018 (6) TMI 1462 - AT - Income Tax

Assessment u/s 153A - no proper notices were issued/served - Held that - In the present case the notice under Section 143(2) was issued to the assessee which is not the mandatory requirement under the provisions of Section 153A of the Act. As per Section 153A simple notice has to be given to the assessee. Thus the contention of the Ld. AR that issue of notice u/s 143(2) within stipulated time is mandatory requirement and is not curable u/s 292BB of the Act does not find support. The notice issued to the assessee has mentioned Section 143(2) but that can be treated as simple notice which has to be given under the provisions of Section 153A of the Act. Case of Ashok Chaddha vs. ITO 2011 (7) TMI 252 - DELHI HIGH COURT to be followed - Thus the contention of the Ld. AR that no proper notices were issued/served and the order passed is without jurisdiction and barred by limitation does not survive. - Decided against assessee Cash seized from the residence of the assessee - Facts do not inspire any confidence in the explanation of the assessee that sum of 1.07 crores found from the residence of the assessee at the time of search by police alleging him to be a Satta operator is money withdrawn from his dairy business of M/s. Naman Dairy wherein he is a partner. Thus there is no need to interfere with the findings of the CIT(A). - Decided against assessee.

Issues Involved:
1. Validity of the order passed under section 153B(1)(b) of the Income Tax Act, 1961.
2. Issuance and service of proper notices and jurisdictional authority.
3. Sustaining the addition of ?1,07,00,000/-.
4. Charging of interest under sections 234A, 234B, and 234C of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Validity of the order passed under section 153B(1)(b) of the Income Tax Act, 1961:
The assessee contested that the order passed under section 153B(1)(b) of the Income Tax Act, 1961, was bad in law and against facts. The Tribunal, however, found that the notice issued under section 143(2) was not a mandatory requirement under section 153A of the Act. The Tribunal cited the Delhi High Court's decision in Ashok Chaddha vs. ITO, which clarified that no specific notice under section 143(2) is required when a notice under section 153A has already been issued. The Tribunal concluded that the contention regarding the invalidity of the order due to improper notice issuance did not hold, and thus, the order under section 153B(1)(b) was valid.

2. Issuance and service of proper notices and jurisdictional authority:
The assessee argued that the notice under section 143(2) was issued beyond the stipulated time, making the order without jurisdiction and barred by limitation. The Tribunal referred to the case of Ashok Chaddha vs. ITO and other relevant judgments, concluding that the notice under section 143(2) within the stipulated time was not a mandatory requirement under section 153A. The Tribunal determined that the notice issued could be treated as a simple notice under section 153A, and therefore, the order was not barred by limitation or without jurisdiction.

3. Sustaining the addition of ?1,07,00,000/-:
The assessee challenged the addition of ?1,07,00,000/- made under section 68 of the Income Tax Act. The Tribunal reviewed the CIT(A)'s detailed findings, which included the following points:
- The police seized ?1,07,00,000/- from the assessee's residence, and the assessee initially admitted that the cash pertained to Satta operations.
- The assessee later changed his statement, claiming the cash was from his dairy business and intended for a property purchase.
- The CIT(A) noted inconsistencies in the assessee's statements and lack of supporting documents for the cash sales.
- The Tribunal found that the assessee's explanation about the source of cash was not credible, given the discrepancies in the cash book and the unusual transactions in the dairy business.
- The Tribunal upheld the CIT(A)'s decision to sustain the addition of ?1,07,00,000/-.

4. Charging of interest under sections 234A, 234B, and 234C of the Income Tax Act, 1961:
The assessee contested the charging of interest under sections 234A, 234B, and 234C. The Tribunal did not provide a separate analysis for this issue, implying that the interest charges were consequential to the primary findings on the validity of the order and the addition sustained.

Conclusion:
The Tribunal dismissed the appeal of the assessee, upholding the validity of the order passed under section 153B(1)(b), the issuance of notices under section 153A, and the addition of ?1,07,00,000/- made under section 68. The charging of interest under sections 234A, 234B, and 234C was also upheld as a consequence of these findings. The Tribunal's decision was pronounced in the open court on 27.06.2018.

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