2001 (2) TMI 297 - AT - Income Tax

Summary

Issues Involved:
1. Limitation of assessment.
2. Validity of jurisdiction transfer.
3. Compliance with procedural requirements.
4. Merits of various additions to undisclosed income.

Detailed Analysis:

1. Limitation of Assessment:
The assessee contended that the assessment framed on 3-12-1998 was barred by time, arguing that the High Court's stay left only 28 days to complete the assessment. The assessee claimed that the assessment should have been completed by 30-9-1997. However, the tribunal noted that the High Court had not quashed the initial notification but only stayed the proceedings, and the assessment was completed within the allowed time after the stay was vacated on 6-11-1998. Consequently, the assessment was deemed within time.

2. Validity of Jurisdiction Transfer:
The assessee argued that the initial notification transferring jurisdiction was invalid due to non-compliance with section 127 of the Act. The High Court directed the issuance of a fresh notification, which was done on 13-4-1998, effective from 16-4-1998. The tribunal held that the initial procedural irregularity was cured by the fresh notification, and the actions of the Assessing Officer during the interim period were valid. The tribunal rejected the assessee's claim that the jurisdiction should revert to the original officer at Trichy.

3. Compliance with Procedural Requirements:
The assessee argued that the Assessing Officer failed to issue a fresh notice under section 158BC after the new notification. The tribunal dismissed this claim, citing a provision effective from 1-4-1998, which states that re-issuing a notice is unnecessary when a case is transferred. The tribunal concluded that the Assessing Officer acted within his jurisdiction and followed legal procedures.

4. Merits of Various Additions to Undisclosed Income:
The tribunal addressed several additions made by the Assessing Officer, including:
- Jewellery found at the residence and in a locker, valued at Rs. 4,57,021 and Rs. 43,47,182 respectively.
- Valuable articles, bank deposits, inadequate drawings, and gifts, totaling Rs. 2,44,91,270.
- Additions based on loose sheets indicating payments and unexplained deposits in bank accounts.

The tribunal noted that the assessment was framed ex parte due to non-cooperation by the assessee. Given the complexity and sensitivity of the case, the tribunal set aside the ex parte assessment, directing the Assessing Officer to re-do the assessment after allowing the assessee sufficient opportunity to present evidence and examine witnesses.

Conclusion:
The appeal was treated as allowed in part. The tribunal upheld the validity of the assessment within the prescribed time and the procedural compliance of the jurisdiction transfer. However, it set aside the ex parte assessment on merits, directing a fresh assessment with adequate opportunity for the assessee to present evidence.