2022 (3) TMI 885 - AT - Income Tax

Validity of the order passed u/s 153A - Basic grievance of the assessee, as appears from the submissions made by learned counsel for the assessee, is the submissions made in course of first appellate proceeding, both, on the validity of the assessment order as well as on merits, have not been duly considered and examined with reference to the material brought on record - HELD THAT - Assessee s contention that there is no incriminating material found as a result of search, requires consideration keeping in view the settled legal principles. Further, reconciliation of entries in the bank accounts furnished by the assessee needs to be verified with reference to the evidences placed by the assessee. We are inclined to restore the issue to the learned Commissioner (Appeals) for fresh adjudication after due opportunity of being heard to the assessee. Grounds are allowed for statistical purposes.

Summary

Issues:
Validity of the assessment order passed under Section 153A of the Income-tax Act, 1961.
Merits of the additions made by the Assessing Officer in the assessment years under appeal.

Detailed Analysis:
1. Validity of the assessment order under Section 153A: The appeals arose from separate orders of the Commissioner of Income-Tax(Appeals) for assessment years 2011-12, 2012-13, and 2013-14. The primary contention raised by the assessee was challenging the validity of the assessment order passed under Section 153A of the Income-tax Act, 1961. The assessee argued that the initiation of proceedings under Section 153A was invalid due to the absence of a search warrant in their name. Additionally, it was highlighted that no incriminating material was found against the assessee during the search and seizure operations. The learned Commissioner (Appeals) did not find merit in the assessee's argument regarding the validity of the assessment order. However, the Appellate Tribunal noted that the submissions made by the assessee were not adequately considered and examined. Therefore, the Tribunal decided to restore the issue to the Commissioner (Appeals) for fresh adjudication after providing the assessee with a due opportunity to be heard.

2. Merits of the additions made by the Assessing Officer: The major additions made by the Assessing Officer in all the assessment years under appeal were on account of unexplained income, along with ad hoc disallowances on certain expenses. The assessee, during the first appellate proceedings, provided reconciliation of entries in the bank accounts, which were not thoroughly examined. The Tribunal acknowledged that the submissions and evidence presented by the assessee were not adequately verified by the Assessing Officer or the first appellate authority. Consequently, the Tribunal decided to restore the issue to the Commissioner (Appeals) for a fresh examination after granting the assessee a proper opportunity to present their case. The Tribunal emphasized the need to verify the reconciliation of entries in the bank accounts with the evidence provided by the assessee.

In conclusion, the Appellate Tribunal allowed the appeals for statistical purposes and directed a fresh adjudication of the issues related to the validity of the assessment order under Section 153A and the merits of the additions made by the Assessing Officer. The Tribunal emphasized the importance of thorough examination and verification of the submissions and evidence presented by the assessee before reaching a final decision.