2025 (4) TMI 282 - AT - Income Tax

A ddition in respect of cash seized from locker - CIT(A) deleted addition - HELD THAT - CIT(A) has found the cash to be accounted in the hands of Temple Trust. Since the audited accounts of Temple Trust are not disturbed and the exemption benefits of Temple Trust are not disturbed by the department there is no reason to disturb the findings of ld. CIT(A) and the factual acceptance of same in the case of Vinod Kumar Bajaj 2024 (11) TMI 1059 - ITAT DELHI thus without entering into the merits of assertions again on first principles we are inclined to follow the co-ordinate bench decision and find no substance in the grounds no 1, 2 and 4 of revenue qua the present assessee too. Cash in hand shown in the audited books / cash book of the business concerns - Since the ld. AO having opportunity in remand proceedings to examine the veracity of claim of assessee has failed to rebut the same with any material discrepancy in the books of business concerns of the group the conclusion of ld. CIT(A) qua the amount of Rs. 19, 26, 234/- deserve no interference. Addition of Rs. 3, 29, 445/- in the hands of assessee we are of considered view that the existence composition and operations of Vikram Bajaj (HUF) being not pleaded immediately at time of search statement so we find no error in the findings of ld. CIT(A) while sustaining the addition to extent of Rs. 3, 29, 446/-. The grounds of both the sides have no merit.

2024 (11) TMI 1059 - AT

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered in this judgment were:

Whether the order passed under section 153A read with section 143(3) of the Income Tax Act, 1961, was valid and within jurisdiction.
Whether the search and seizure operation was lawful and valid, and whether the subsequent assessment was justified.
Whether the cash seized from the premises and lockers was unaccounted income or belonged to various entities and trusts, as claimed by the assessee.
Whether the additions made by the Assessing Officer (AO) regarding cash found during the search were justified or should be deleted based on the explanations and evidence provided by the assessee.
Whether the CIT(A) correctly deleted or sustained specific additions made by the AO.
Whether the procedural requirements, including those related to Document Identification Number (DIN) and section 153D approval, were adequately followed.

2. ISSUE-WISE DETAILED ANALYSIS

Validity of the Order under Section 153A/143(3)

Relevant Legal Framework and Precedents: The legal provisions under section 153A empower the AO to assess or reassess income in cases where a search is conducted. The validity of such orders depends on adherence to procedural requirements and the existence of incriminating material.
Court's Interpretation and Reasoning: The Tribunal examined whether the procedural requirements were met and whether the order was based on valid jurisdiction. The assessee contended that the order was illegal due to lack of jurisdiction and procedural violations.
Key Evidence and Findings: The Tribunal found that the procedural requirements, including the issuance of a valid DIN and approval under section 153D, were not adequately addressed by the AO.
Application of Law to Facts: The Tribunal noted that the absence of incriminating material found during the search weakened the basis for the assessment order.
Conclusions: The Tribunal found merit in the assessee's contention regarding the procedural lapses and lack of jurisdiction, affecting the validity of the order.

Legality of Search and Seizure Operation

Relevant Legal Framework and Precedents: The legality of a search operation is governed by the provisions of the Income Tax Act, which require proper authorization and adherence to procedural safeguards.
Court's Interpretation and Reasoning: The Tribunal considered the assessee's claim that the search was initiated under false pretenses and was therefore unlawful.
Key Evidence and Findings: The Tribunal did not find substantial evidence to support the claim that the search was unauthorized or conducted improperly.
Conclusions: The Tribunal upheld the legality of the search operation, dismissing the assessee's claims of it being unlawful.

Ownership and Accounting of Seized Cash

Relevant Legal Framework and Precedents: The burden of proof lies on the assessee to demonstrate that the cash seized during a search is accounted for and not unaccounted income.
Court's Interpretation and Reasoning: The Tribunal examined the explanations and evidence provided by the assessee, including audited financial statements and trust deeds.
Key Evidence and Findings: The assessee provided evidence that the cash belonged to the RNB Temple Trust and other entities, supported by audited financial statements and trust registration documents.
Application of Law to Facts: The Tribunal noted that the evidence presented was consistent with the claims of the cash being accounted for in the books of the trust and entities.
Conclusions: The Tribunal found the explanations credible and upheld the CIT(A)'s decision to delete the addition related to the cash attributed to the trust and entities.

Procedural Compliance and Approval under Section 153D

Relevant Legal Framework and Precedents: Section 153D requires prior approval for assessments made under section 153A, ensuring checks and balances in the assessment process.
Court's Interpretation and Reasoning: The Tribunal scrutinized whether the AO obtained the necessary approval and whether the procedural requirements were met.
Key Evidence and Findings: The Tribunal found lapses in the approval process, with the assessee arguing that the approval was not properly documented or considered.
Conclusions: The Tribunal acknowledged the procedural lapses and found the lack of proper approval under section 153D to be a significant issue.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "The Tribunal found that the procedural requirements, including the issuance of a valid DIN and approval under section 153D, were not adequately addressed by the AO."
Core Principles Established: The judgment reinforced the importance of adhering to procedural requirements and the burden of proof on the assessee to substantiate claims regarding seized assets.
Final Determinations on Each Issue: The Tribunal partially allowed the appeals, upholding the CIT(A)'s deletions of certain additions while acknowledging procedural lapses affecting the assessment's validity.

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