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2018 (8) TMI 981 - AT - Income TaxValidity of assessment u/s 153C - Additions u/s 68 - ex-parte appellate order - failure to appear on the date of hearing due to his personal difficulties - opportunity of being heard and natural justice. - Since in the instant case, the satisfaction under Section 153C of the Act was recorded on 08.08.2013, therefore, the relevant six assessment years available for assessment/reassessment would be assessment year 2008-09 to 2013-14. The year under consideration being assessment year 2007-08, which being out of the purview of this period, the assessment in the year under consideration cannot be made under Section 153C of the Act. Accordingly, we quash the assessment order passed by the Assessing Officer under Section 153C of the Act. The additional ground raised by the assessee is accordingly allowed. Since we have already quashed the assessment proceedings, the other grounds raised by the assessee are rendered merely academic - Decided in favor of assessee.
Issues Involved:
1. Ex-parte order passed by CIT(A). 2. Addition of ?93,00,000 under Section 68 of the Income-tax Act. 3. Jurisdictional validity of the assessment order under Section 153C. 4. Admission of additional grounds by the assessee. Detailed Analysis: 1. Ex-parte Order Passed by CIT(A): The assessee contended that the CIT(A) erred in passing an ex-parte order due to the non-appearance of the counsel, which deprived the assessee of the opportunity of being heard and natural justice. The Tribunal noted that the CIT(A) confirmed the addition made by the AO on mere technical grounds without considering the merits of the case, which included the identity, creditworthiness, and genuineness of the parties involved. 2. Addition of ?93,00,000 Under Section 68: The CIT(A) confirmed the addition of ?93,00,000 made by the AO under Section 68 of the Act. The assessee argued that the initial onus was duly discharged, and there were no contrary findings to sustain the addition other than procedural irregularities by the counsel. The Tribunal admitted the additional ground raised by the assessee, which challenged the jurisdictional validity of the assessment order under Section 153C. 3. Jurisdictional Validity of the Assessment Order Under Section 153C: The Tribunal examined the jurisdictional validity of the assessment order under Section 153C. The assessee argued that the assessment order was void-ab-initio as the proceedings initiated under Section 153C did not satisfy the statutory conditions. The Tribunal referred to the decisions of the Hon’ble Delhi High Court in the cases of Pr. CIT Vs. Sarwar Agency Pvt. Ltd. and Commissioner of Income Tax-7 Vs. RRJ Securities Ltd., which held that the six assessment years for reopening under Section 153C should be taken as six assessment years preceding the year in which the documents were handed over by the AO of the searched person to the AO of the assessee. Since the satisfaction note under Section 153C was recorded on 08.08.2013, the relevant six assessment years would be from 2008-09 to 2013-14. The assessment year under consideration (2007-08) was beyond this period, rendering the assessment order void. 4. Admission of Additional Grounds by the Assessee: The Tribunal admitted the additional ground raised by the assessee, citing the judgment of the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT. The Tribunal noted that all facts were available on record and no new investigation was required. The Tribunal also referred to the decision in Jute Corporation of India Ltd. Vs. CIT, which allowed the appellate authority to permit the appellant to raise an additional ground if it became available due to a change in circumstances or law. Conclusion: The Tribunal quashed the assessment order passed by the AO under Section 153C of the Act, as it was beyond the jurisdictional period. Consequently, the other grounds raised by the assessee were rendered academic and were not adjudicated. The appeal of the assessee was allowed, and the decision was pronounced in the open court on 13th August 2018.
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