2023 (12) TMI 411 - AT - Income Tax

Revision u/s 263 - unexplained gold jewellery found in search - unexplained investment u/s. 69/69B - scope of Board Instruction 1916 dated 11.05.1994 (BI 1916) for Streedhan applied by AO - Pr. CIT found the same as erroneous and prejudicial to the interest of the Revenue inasmuch as BI 1916 only seeks to regulate seizure by providing uniform parameters, to be applied across the country, to avoid arbitrariness in seizure and indeed harassment to tax payers, limited in its application to seizure, and its understanding by AO to imply a concession qua gold jewellery found though not seized in view of these norms, i.e., in the matter of assessment, is misplaced. The same is to be subject to assessment as per law. HELD THAT - AO s, who claims to be in making the impugned assessment guided by the said BI, understanding thereof is, much less a reasonable construction, as contended, a disregard thereof; rather, contrary thereto. The argument is in fact misconceived inasmuch as a possible view, precluding revision, is only qua a provision of law, conspicuous by its absence. On merits, as explained, the Board cannot, as per settled law, travel outside its bounds under law or usurp the power of adjudication by the assessing authority. It has, as a matter of fact , not, so that questions of competence or reasonability of construction are academic, stated only to meet the arguments made during hearing. No reason for such construction, needless to add, stands furnished before us. The impugned assessment is a clear case of misapplication of law, liable for revision qua the relevant aspect. That some other authority may have read BI1916 likewise, i.e., contrary to what it says, is immaterial (Escorts Ltd. v. UoI 1992 (10) TMI 1 - SUPREME COURT The same can, under the circumstances, only be regarded as it s view in the matter, not supported by any cannon of interpretation of statutes which the BI is in fact not, drawing inference from the fact of non-seizure advocated thereby, to thus travel outside its scope and purpose. Assessee s appeal is dismissed

Summary

Issues:
The appeal involves a single issue regarding the assessment revision under section 143(3) of the Income Tax Act, 1961 for Assessment Year 2020-21.

Summary:
The case involved the assessment of gold jewellery found during a search at the assessee's residence and business premises. The Board Instruction 1916 dated 11.05.1994 (BI 1916) provided guidelines for the seizure of gold jewellery during searches. The Principal Commissioner of Income Tax, Cochin found the assessment erroneous as the gold jewellery, though not seized, was not brought to tax as per law. The revisionary authority directed the Assessing Officer (AO) to re-examine and adjudicate the matter afresh.

The assessee argued that the AO's assessment was reasonable and supported by Tribunal decisions. The Revenue and revisionary authority contended that the AO's view was incorrect, and the gold jewellery should have been assessed as unexplained investment despite BI 1916.

The Tribunal analyzed the AO's observations and the Board Instruction 1916. It found that the AO misread the instruction, which required the assessing authority to consider unseized jewellery for assessment purposes. The AO's interpretation was contrary to the law and prejudicial to the Revenue's interest, warranting revision under section 263.

The Tribunal concluded that the assessee's case lacked merit, and the appeal was dismissed without expressing a view on the assessment of the jewellery. The order was pronounced on December 07, 2023, under Rule 34 of The Income Tax (Appellate Tribunal) Rules, 1963.