2023 (6) TMI 223 - AT - Income Tax

Validity of re-assessment - as argued notice u/s 143(2) was not issued by the AO - whether curable u/s 292BB? - HELD THAT - From the contents of the Assessment Order, it appears that the show cause notice was represented and the assessee s case was validly assessed though mentioning of the Section 143(2) was not there on record. Yet, opportunity of representing the assessee was given during the assessment proceedings. Prima facie, from the assessment order, it appears that notice u/s 143(2) of the Act was issued to the assessee and the observations of the CIT(A) needs no interference. Hence, ground no.1 is dismissed. Cash seized during the course of search - onus to prove - HELD THAT - AO has not doubted the books of accounts which was produced before the AO on 18.12.2013 during the course of assessment proceedings. On the contrary, in paragraph no.6 the observations are related to the evidence regarding books of accounts maintained on date of search was taken into account. At no point of time AO has doubted the books of accounts produced during the assessment proceedings and, therefore, the observation made by the AO in conclusion is not justifiable. Assessee has furnished the name address and PAN of the persons from whom assessee firm has transported the cash for which income has been shown by the assessee and, therefore, the onus casts upon the assessee to prove identify, creditworthiness and genuineness of the transaction was discharged fully by the assessee in respect of cash seized Therefore, the addition made by the AO was not justifiable. Decided partly in favor of assessee.

Summary

Issues involved:
The appeal filed by the Assessee against the order passed by the CIT(A)-6, Ahmedabad for the Assessment Year 2013-14.

Issue 1: Notice under Section 143(2) of the Income Tax Act
The Assessee contended that the order passed without issuing a mandatory notice under Section 143(2) is void. The Assessing Officer argued that the Assessee participated in the assessment proceedings under Section 148 & 143(3) read with Section 147, justifying the assessment order under Section 292BB. The Tribunal found that the show cause notice was represented, and the Assessee was given an opportunity to present their case during the assessment proceedings. Even though the notice under Section 143(2) was not explicitly mentioned in the record, the Tribunal concluded that the notice was issued, and the CIT(A)'s observations did not require interference. Hence, ground no.1 was dismissed.

Issue 2: Addition of Cash Amount
The Assessee challenged the addition of Rs.6,00,000 of cash, asserting it was duly recorded in the books. The Assessee provided books of accounts during the assessment proceedings, demonstrating the cash was entered for the relevant assessment year. The Assessing Officer raised concerns about the books of accounts being maintained post-search and potentially fabricated. However, the Tribunal noted that the Assessing Officer did not doubt the books produced during the assessment proceedings. The Assessee also furnished details of the persons involved in the cash transactions, meeting the onus to prove the genuineness of the transactions. Consequently, the addition made by the Assessing Officer was deemed unjustifiable, and grounds no.2 & 3 were allowed.

In conclusion, the appeal filed by the Assessee was partly allowed by the Tribunal, with the decision pronounced on 2nd June 2023.