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2024 (5) TMI 161 - AT - Income TaxValidity of assessment made u/s 147 instead of u/s. 153C - Addition as unexplained cash credit u/s. 68 - assessee has received accommodation entry in the form of bogus LTCG/STCG from one entry operator - HELD THAT - Upon careful consideration, we find that assessment in this case was framed pursuant to the reopening of the case u/s. 147 of the I.T Act, 1961. CIT(A) has given findings which has been duly elaborated as above, ld. CIT(A) has held that the provision 153C of the Act, were applicable in the present case for framing the assessment, which excludes the application of section 147 of the Act. Hence, notice issued u/s. 148 of the Act and the assessment framed further thereto u/s. 147 r.w.s 143(3) of the Act are void ab initio. Therefore the ld. CIT(A) held that the reassessment u/s. 147/148 of the Act for AY 2017-18 is quashed and this ground of appeal is allowed. Appeal of the Revenue is dismissed.
Issues Involved:
1. Differentiation of information concluded on the basis of seized material as per section 153C of the Act. 2. Necessity of satisfaction note by AO of the searched person for proceedings u/s 153C of the Act. 3. Overlooking the fact that no satisfaction note was sent to the AO of the assessee. Summary: Issue 1: Differentiation of information concluded on the basis of seized material as per section 153C of the Act The Ld. CIT(A) granted relief to the assessee by holding that assessment should have been done u/s 153C and not by way of reopening u/s 147 of the I.T Act, 1961. The CIT(A) analyzed Section 153C, stating it supersedes sections 147, 148, 149, 151, and 153. It was concluded that the seized paper, based on its contents and the statement of Mr. S K Gupta, acquired the nature of "Incriminating paper." Hence, any addition on the basis of this paper should be made u/s 153C. Issue 2: Necessity of satisfaction note by AO of the searched person for proceedings u/s 153C of the Act The CIT(A) held that the correct section under which any addition on the basis of the seized paper can be made is Section 153C of the Act. Judicial decisions cited, such as ITO Vs Arun Kumar Kapoor and Rajat Shubra Chatterji Vs. ACIT, supported the view that provisions of sec. 153C were applicable, which exclude the application of sections 147 and 148 of the Act. Issue 3: Overlooking the fact that no satisfaction note was sent to the AO of the assessee The CIT(A) noted that the assessment was framed pursuant to the reopening of the case u/s 147 of the I.T Act, 1961. The CIT(A) held that the provisions of sec. 153C were applicable for framing the assessment, excluding the application of section 147. Therefore, the reassessment u/s 147/148 of the Act for AY 2017-18 was quashed. This decision was upheld by the ITAT, finding no infirmity in the order of the CIT(A). Conclusion The appeal of the Revenue was dismissed, and the order pronounced in the open court on 01/05/2024.
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