2020 (11) TMI 564 - AT - Income Tax

Validity of reopening of assessment u/s 147 - search and seizure of another person including the husband of assessee - unaccounted money that is discernible from the seized documents owned by assessee in search - as alleged by assessee that, proceedings in assessee s case should have been in accordance with provisions of section 153C since addition is found during search - HELD THAT - As per the scheme of the Act the year in which search is conducted does not fall within the purview of the provisions either under section 153A or under section 153C. Act allows 6 years period to be computed from the previous year relevant to the year in which the search was conducted. In Present facts the year under consideration is relevant to financial year in which search took place. There has been no action on assessee under section 132 or requisition is made under section 132A as per section 153C(2). In the present facts none of these conditions stands satisfied. We therefore find argument advanced by Ld.AR challenging the reopening is without any basis and does not satisfy the required conditions to be considered as per law. The reopening cannot be quashed on such technicalities as argued by Ld.AR that, assessee falls under the category of other person as per section 153A - reopening notice was issued as assessee failed to include the amount disclosed vide her letter dated 17/09/2010 in the return filed for year under consideration on 29/09/2011.Arguments advanced by Ld.Sr.DR deserves to be upheld. Pursuance to the declaration by assessee that the summon under section 131 was issued based upon the statements recorded therein the reopening has been initiated. We note that reopening notice is issued as assessee failed to include the disclosure made as per statement recorded in the return filed for year under consideration. It is apparently clear that the reopening notice has been issued subsequent to the filing of return for year under consideration by assessee - Decided against assessee.

Summary

Issues Involved:
1. Validity of reassessment proceedings under Section 148 of the Income Tax Act.
2. Addition of ?1 Crore as unexplained income.
3. Liability of interest under Sections 234A and 234B.

Issue-wise Detailed Analysis:

1. Validity of Reassessment Proceedings under Section 148:
The assessee challenged the reassessment initiated under Section 148, arguing it should have been under Section 153C since the documents were found during a search. The Tribunal noted that the documents were seized from the premises of the assessee's husband, and the assessee had voluntarily declared ?1 Crore under Section 132(4). The Tribunal found that the reopening was based on the assessee's own declaration and subsequent statement, which justified the issuance of notice under Section 148. The Tribunal upheld the reassessment proceedings, rejecting the argument that the case fell under Section 153C.

2. Addition of ?1 Crore as Unexplained Income:
The assessee argued that the ?1 Crore declared should be assessed for the assessment year 2011-12, not 2010-11. The Tribunal noted that the assessee had initially declared the amount for the year under consideration (2010-11) and later changed her stance. The Tribunal remanded this issue back to the CIT(A) for reconsideration, as it was not adequately addressed in the previous order.

3. Liability of Interest under Sections 234A and 234B:
The assessee contested the interest levied under Sections 234A and 234B, arguing that no opportunity was given before the levy and that interest should only be on the returned income. The Tribunal did not specifically address this issue in detail, as the primary focus was on the reassessment and the addition of unexplained income.

Conclusion:
The appeal was partly allowed. The Tribunal upheld the validity of the reassessment proceedings under Section 148 and rejected the grounds challenging the reassessment. However, the issue of the ?1 Crore addition was remanded back to the CIT(A) for further consideration. The Tribunal did not provide a detailed ruling on the interest liability under Sections 234A and 234B.