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2023 (8) TMI 632 - AT - Income TaxValidity of reopening of assessment - addition of unexplained share capital and unexplained bank deposits - assessee has challenged the assumption of jurisdiction and contended that the assessment order is contrary to Section 147 to 151 and the same is beyond jurisdiction and without complying the mandatory conditions of Section 147 to 151 - As per assessee since the Assessment was originally completed u/s 143(3)/153C was annulled, hence, assessment u/s 147 could not have been done by the A.O. - HELD THAT - The Hon ble Supreme court in the recent Judgment in the case of Abhisar buildwell Pvt. Ltd. 2023 (4) TMI 1056 - SUPREME COURT while holding that, in respect of completed/unabated assessments, no addition can be made by the AO in the absence of any incriminating material found during the course of search u/s 132 or requisition u/s 132A however, observed that the completed/unabated assessments can be re-opened by the AO in exercise of powers u/s 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. Once the AO rightly or wrongly assumed jurisdiction in framing the assessment order u/s 143(3) r.w.s. 147 of the Act, in view of the fact that once the assessment order is subject matter of the further appeal, reassessment cannot be framed on the same issue on issuing notice u/s 148 as the original assessment gets merged with the order of the Higher Appellate Authority. Ratio laid down in the case of Krishna Developers Co. 2017 (8) TMI 241 - GUJARAT HIGH COURT and Abhisar Buildwell P.Ltd 2023 (4) TMI 1056 - SUPREME COURT which are having effect of binding precedent, therefore by relying on the ration laid on in the case of Krishna Developers Co. and Principal Commissioner Vs. Abhisar Buildwell P. Ltd (Supra), we find no merits in the Ground No. 1 to 4 of the C.O.
Issues Involved:
1. Deletion of additions on account of unexplained share application money. 2. Deletion of additions on account of unexplained deposits. 3. Jurisdiction and validity of reassessment orders under Sections 147 to 151 of the Income Tax Act. Summary: Issue 1: Deletion of Additions on Account of Unexplained Share Application Money The Revenue contested the deletion of Rs. 14,50,66,141/- added to the income of the assessee for unexplained share application money. The CIT(A) deleted the addition, noting that the Assessing Officer (AO) had not considered the financial statements and erroneously made the addition by merely copying the order passed u/s 153C. The Tribunal found that the CIT(A) failed to ensure the assessee proved the identity, capacity of the parties, and genuineness of the transaction as mandated by Section 68 of the Act. The Tribunal vacated the CIT(A)'s order and remitted the issue back to the AO for fresh adjudication. Issue 2: Deletion of Additions on Account of Unexplained Deposits The Revenue also contested the deletion of Rs. 16,45,11,241/- added to the income of the assessee for unexplained deposits. The CIT(A) deleted this addition, stating that the AO did not conduct proper verification and simply copied the order from u/s 153C. The Tribunal noted that the CIT(A) did not independently verify the details or call for a remand report from the AO. The Tribunal vacated the CIT(A)'s order and remitted the issue back to the AO for fresh adjudication. Issue 3: Jurisdiction and Validity of Reassessment Orders under Sections 147 to 151 of the Income Tax Act The assessee challenged the reassessment orders on the grounds of jurisdiction and non-compliance with mandatory conditions under Sections 147 to 151. The Tribunal found that the AO was justified in issuing the notice under Section 147 since the period of four years had not passed from the end of the relevant assessment year. The Tribunal relied on the judgments of the Gujarat High Court in Krishna Developers & Co. and the Supreme Court in Abhisar Buildwell Pvt. Ltd., which upheld the validity of reassessment proceedings initiated within the statutory period. Consequently, the Tribunal dismissed the cross-objections filed by the assessee challenging the reassessment orders. Conclusion: The Tribunal remitted the issues of unexplained share application money and unexplained deposits back to the AO for fresh adjudication and upheld the validity of the reassessment proceedings initiated by the AO.
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