9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 751 - AT - Income TaxValidity of assessment u/s 153A/143(3) - wrong reference to a section under which an order is made - Whether CIT(A) has grossly erred in law and on facts of the case in sustaining the assessment order under section 153A of the Act instead of section 153C made by ACIT when there was no search authorization under section 132 of the Act in the name of the assessee without verifying the record of the revenue? - HELD THAT - A.O was duly vested with the jurisdiction to frame the assessment under Sec. 143(3) of the Act. We are in agreement with the view taken by the CIT(A), that as held in the case of Isha Beevi 1975 (9) TMI 2 - SUPREME COURT a wrong reference to a section under which an order is made would not on such standalone basis vitiate the assessment order, but in order to see as to whether an order is valid or not has to be determined by verifying as to whether the A.O had any power at all to make such assessment. As observed by the Hon ble Supreme Court, if the power is otherwise available with the A.O, the fact that source of such power had been incorrectly described would not vitiate the order passed by him. Now, in the case before us, we find that the A.O who was duly vested with the jurisdiction to frame the assesement under Sec. 143(3), had inadvertently made a mention of Sec. 153A along with Sec. 143(3) of the Act. In our considered view, the aforesaid mistake cannot be stretched to the extent for rendering the assessment framed by the A.O under Sec. 143(3), as invalid and void ab-initio on the said count. Accordingly, finding no substance in the aforesaid claim of the assessee, we decline to accept the same and uphold the view taken by the CIT(A) who had rightly dismissed the same. Addition of value of the 450 grams of gold jewellery under Sec. 69B - unexplained investment - HELD THAT - Entire value of the 450 grams of gold jewellery which have been held by the A.O as an unexplained investment within the meaning of Sec. 69B of the Act, had been added to the income of the assessee. In our considered view, the very basis for invoking the provisions of Sec. 69B in the case of the assessee before us are found to be seriously amiss viz. (i) that, as the assessee was not maintaining any books of account, therefore, the issue of recording of the investment in the 450 grams of gold jewellery cannot be comprehended; and (ii) that, in the absence of recording of the investment in 450 grams of gold jewellery in the books of account, there could have been no occasion for making of an addition of the excess unrecorded value of such investment under Sec. 69B of the Act. On the basis of our aforesaid deliberations, we are of a strong conviction that in the totality of the facts of the case the A.O could not have made the addition as regards the impugned value of the 450 grams of gold jewellery under Sec. 69B of the Act. As such, we are in agreement with the contention advanced by the Ld. A.R that the impugned addition could not have been made by the A.O under Sec. 69B of the Act. In the backdrop of our aforesaid observations, we herein conclude that the impugned addition of ₹ 13,95,900/- made by the A.O as regards the 450 grams of gold jewellery under Sec. 69B of the Act cannot also be sustained for want of jurisdiction. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT - Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited 2020 (5) TMI 359 - ITAT MUMBAI
Issues Involved:
1. Validity of the assessment order under Section 153A/143(3) instead of Section 143(3). 2. Consideration of judicial pronouncements relied upon by the assessee. 3. Appropriateness of the assessment under Section 153A instead of Section 153C. 4. Requirement for the assessee to file an affidavit regarding the search authorization. 5. Treatment of 450 grams of gold jewelry as unexplained investment under Section 69B. 6. Valuation of jewelry at market price instead of cost price. 7. Application of Section 292C regarding the presumption of ownership of the jewelry. Detailed Analysis: 1. Validity of the Assessment Order under Section 153A/143(3): The assessee contested the validity of the assessment framed under Section 153A/143(3), arguing that it should have been framed under Section 143(3) or Section 144. The Tribunal found that the Assessing Officer (A.O.) had issued notices under Sections 143(2) and 142(1), and the assessee had participated in the proceedings. The Tribunal upheld the view that a wrong reference to a section does not vitiate the assessment order if the A.O. had the power to pass such an order. The assessment was deemed valid as the A.O. had jurisdiction under Section 143(3). 2. Consideration of Judicial Pronouncements: The Tribunal noted that the CIT(A) had considered the judicial pronouncements cited by the assessee, specifically the Supreme Court's ruling in Isha Beevi Vs. TRO, which held that a wrong reference to a section does not invalidate an order if the power to pass the order exists. 3. Appropriateness of Assessment under Section 153A Instead of Section 153C: The assessee argued that no search authorization under Section 132 was issued in her name, and thus the assessment should have been under Section 153C. The Tribunal found that a restrain order on the operation of bank lockers indicated that a search warrant under Section 132 was issued. Therefore, the assessment under Section 153A was appropriate. 4. Requirement for Affidavit Regarding Search Authorization: The CIT(A) had directed the assessee to file an affidavit supporting her claim that no search authorization was issued in her name. The Tribunal upheld the CIT(A)’s decision, noting that the assessee's counsel expressed an inability to file the affidavit, and information from the ADIT(Inv.) confirmed the issuance of a restrain order. 5. Treatment of 450 Grams of Gold Jewelry as Unexplained Investment under Section 69B: The A.O. treated 450 grams of gold jewelry as unexplained investment under Section 69B, valuing it at ?13,95,900/-. The Tribunal found that the assessee had explained the source of 950 grams of gold jewelry through an affidavit from her brother, which was not adequately verified by the A.O. The Tribunal vacated the addition, accepting the explanation of the source of acquisition. 6. Valuation of Jewelry at Market Price Instead of Cost Price: The Tribunal did not specifically address the valuation method but focused on the explanation of the source of the jewelry. Since the source was accepted, the valuation issue became moot. 7. Application of Section 292C Regarding Presumption of Ownership: The Tribunal found that the presumption under Section 292C, which is rebuttable, was adequately rebutted by the affidavit from the assessee's brother. The Tribunal emphasized the need for the A.O. to verify the affidavit before summarily rejecting the explanation. Conclusion: The Tribunal partly allowed the appeal, vacating the addition of ?13,95,900/- under Section 69B and upholding the validity of the assessment under Section 153A/143(3). The Tribunal also addressed procedural delays due to the COVID-19 lockdown, extending the time for pronouncement of the order.
|
