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2023 (6) TMI 79 - AT - Income TaxAssessment u/s 153C - validity of the notice issued u/s. 153C of the Act and completion of assessment u/s 143(3) r.w.s 153C - scope of curable defect u/s. 292BB - HELD THAT - Search operation u/s.132 was conducted in the premises of M/s. Apex Frozen Foods Limited and subsequently in the premises of the assessee. AO has issued a notice u/s.153C wherein it was stated that the AO has required the assessee to prepare the true and correct return of the total income in pursuance of the provisions of section 153C r.w.s 153A of the Act for the impugned assessment year. As per the provisions of the Act, consequent to the search, as per the requirement of law, in case the premises of the persons have been searched, then the proceedings to be initiated are by way of issue of notice u/s. 153A of the Act. In the instant case, the documents were seized from the residential premises of the assessee and therefore the Ld. AO ought to have issued notice u/s.153A instead of notice u/s.153C - we find from the written submissions made by the AR regarding the satisfaction note recorded by the AO wherein the AO proposed to issue notice u/s. 153C - the initiation of proceedings u/s.153C in the case of the assessee who is the person searched is not valid. It is not out of place to mention that any defects in notices u/s. 153A / 153C of the Act, whereby the Assessing Officer assumes jurisdiction, are not curable U/s. 292BB of the Act even though the assessee participated in the assessment proceedings without objection. Therefore, it can be safely concluded that in the instant case, since the issue of notice U/s. 153C is invalid and consequently, the assessment order passed U/s. 143(3) r.w.s 153C is bad in law and void ab initio. Assessee appeal allowed. Salary income - Perquisites - Addition u/s. 17(2)(v) towards insurance premium paid by the employer - whether premium paid by the employer on the policy taken on the life of the employee / assessee is a taxable perquisite as defined u/s. 17(2)(v) of the Act or not? - HELD THAT - Admittedly, the policy is taken by the employer in the name of the employee and cannot be assigned in the name of the employer in a future date. The insurance policy is taken by the employer to protect the interests of the employees even though no immediate benefit is accrued to the employees. From the plain reading of the section 17(2)(v) of the Act, we find that any policy to effect an assurance on the life of the assessee shall be treated as a perquisite as defined in the Act. Therefore, the argument of the Ld. AR has no merits. We are therefore inclined to uphold the order of the Ld. CIT(A) and dismiss this appeal of the assessee.
Issues Involved:
1. Condonation of delay in filing appeals. 2. Validity of notice issued under Section 153C of the Income Tax Act. 3. Taxability of insurance premium paid by the employer as a perquisite under Section 17(2)(v) of the Income Tax Act. 4. Additional grounds related to unexplained loan advances and undisclosed profit on sale of shares. Summary: Condonation of Delay: The assessee filed appeals with a delay of 270 days, citing the Supreme Court's order dated 10/01/2022 which excluded the period from 15/3/2020 till 28/2/2022 for limitation purposes. The Tribunal condoned the delay, considering it a fit case based on the Supreme Court's directions. Validity of Notice under Section 153C:The core issue was whether the notice issued under Section 153C instead of Section 153A was valid. The Tribunal observed that since the search was conducted at the assessee's premises, the notice should have been issued under Section 153A. The Tribunal held that the initiation of proceedings under Section 153C was invalid and quashed the assessment order passed under Section 143(3) r.w.s 153C, declaring it void ab initio. Taxability of Insurance Premium as Perquisite:For the assessment year 2018-19, the issue was whether the insurance premium paid by the employer under the Employer Employee Scheme (EES) was a taxable perquisite under Section 17(2)(v). The Tribunal upheld the order of the CIT(A), stating that any policy taken to effect an assurance on the life of the assessee is treated as a perquisite under the Act, dismissing the assessee's appeal on this ground. Additional Grounds:For the assessment year 2018-19, the assessee also contested additions related to unexplained loan advances and undisclosed profit on sale of shares. The Tribunal noted that these grounds were either not pressed or not adjudicated due to the primary legal ground being decided in favor of the assessee. Conclusion:Appeals for the assessment years 2013-14 to 2017-18 were allowed, quashing the assessment orders as void ab initio. The appeal for the assessment year 2018-19 was dismissed, upholding the additions made by the Assessing Officer. Result:Appeals in ITA Nos. 33 to 37/Viz/2022 were allowed, and ITA No. 38/Viz/2022 was dismissed.
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