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Income Tax - Case Laws
Showing 361 to 380 of 171774 Records
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2025 (2) TMI 924
Penalty u/s 271(1)(c) - defective notice u/s 274 - non specification of clear charge/Default - HC decided [2023 (8) TMI 1373 - DELHI HIGH COURT] Revenue does not dispute that none of the penalty notices issued to the respondent/assessee for the aforementioned AYs advert to the specific limb of Section 271(1)(c) which is triggered against him.
It is not clear whether the AO intended to levy a penalty on the respondent/assessee for concealment of particulars of his income, or furnishing inaccurate particulars.
HELD THAT:- There is gross delay of 371 days in filing this Special Leave Petition.
Delay in refiling is condoned.
Following the orders passed by this Court in [2024 (9) TMI 1698 - SC ORDER], [2024 (9) TMI 1698 - SC ORDER] and [2024 (7) TMI 975 - SC ORDER] in the case of the very same respondent-assessee, we dismiss the application seeking condonation of delay.
Consequently, the Special Leave Petition also stands dismissed.
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2025 (2) TMI 923
Stay of demand - deposit of 20% of the outstanding amount was made - HELD THAT:- In the matter of M/s. Aarti [2018 (4) TMI 1284 - CHHATTISGARH HIGH COURT] application for stay of demand has not been considered in the manner it was required to be considered and dealt with. Deposit of 20% of the disputed demand has been made condition precedent for hearing the application for stay which is not contemplated either under the Act of 1961 or the CBDT guidelines dated 29-2-2016 modified by the office memorandum dated 31-7-2017.
It is only when the competent authority is of the opinion that the assessee has made out a case for grant of interim relief, stay can be granted subject to deposit of 20% of the disputed demand. Likewise, there is a further clause in the circular for reduction of 20% deposit if the petitioner makes out a case, it has also not been considered. In straightway, direction of deposit of 20% of the disputed demand has been made which is not the correct way of deciding the application for stay of the disputed demand.
Since similar question is involved in this matter, the impugned order is set-aside and the matter is remitted to the competent authority to consider it afresh in light of the guidelines as stated above and pass a reasoned order within a period of 4 weeks from the date of receipt of a copy of this order.
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2025 (2) TMI 922
Validity of the additions made u/s 68 - whether ITAT has only considered cash credit to be taxable under the provisions of section 68, whereas the provision covers within its ambit ‘any sum credited in the Books? - whether order of Ld. ITAT is erroneous and untenable in law as it has failed to consider that the impugned transaction is a colorable devise to avoid tax liability and the facts clearly show that the assessee party has made the credit/ debit entries in contravention of provisions laid by the Act?
HELD THAT:- As undisputed that the shares had been issued without any monetary consideration. The respondent appears to have debited the goodwill account of the company and made a corresponding credit to the share capital account for the purposes of allotment of shares to Mr. Kaushik. It was in the aforesaid light that it had taken the position that it was merely a book entry and thus, would not have fallen within the ambit of Section 68.
the view as expressed by the CIT(A) and which came to be affirmed by the Tribunal does not merit any interference bearing in mind the undisputed fact that the transaction did not represent an actual receipt of any cash in the hands of the assessee company. In absence of any such consideration having entered the books, the provisions of Section 68 were clearly not attracted. The assessee had in any case satisfactorily explained the circumstances attached to the book entry in question. Decided in favour of assessee.
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2025 (2) TMI 921
Addition of bogus expense - CIT(A) confirmed the addition @ 20% of the bogus expense - contention of the assessee that identical addition in respect of sister concern of the assessee was restricted to the extent of 12.5% only - HELD THAT:- We are of the considered opinion that the Ld. CIT(A) had correctly appreciated the facts of the case and restricted the addition to the extent of 20% of the subcontract amount which was reasonable considering the fact that documentary evidence for a return of sub-contract amount in cash to the extent of 4.21 Crores only was found in this case. Accordingly, the order of the Ld. CIT(A) is upheld. The grounds taken by the Revenue are dismissed.
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2025 (2) TMI 920
Addition u/s. 69A - unexplained jewellery found in locker - locker was in the joint name of the assessee and her daughter - At the time of search assessee had given a categorical statement that the jewellery in the said locker belonged to her daughter, who was now a resident of UK - HELD THAT:- Daughter of the assessee filed an Affidavit stating that the jewellery seized from the locker belonged to her and that the same was received from her parents and relatives at the time of her marriage, on the occasion of birth of her children and on other occasion etc.
Nothing has been brought on record to dispute the veracity of the statement of the assessee or the contents of the Affidavit filed by the daughter of the assessee. The only reason for the addition was that since the locker was being regularly operated by the assessee, the natural presumption would be that the jewellery found in said locker, belonged to the assessee only.
Looking into the instant facts, no such presumption can necessarily be drawn, looking into the fact that the locker in question was jointly held by the assessee and her daughter.
Daughter of the assessee was residing in UK and hence it was practically not possible for her to operate the locker and further, the daughter of the assessee also filed an Affidavit stating that the jewellery impounded from the locker belonged to her and her family members. Accordingly, looking into the assessee’s set of facts, in our considered view, the additions made by the AO are liable to be deleted. Appeal of the assessee is allowed.
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2025 (2) TMI 919
Revision u/s 263 - issues not verified by AO during the course of assessment proceedings on Disallowance u/s 14A read with Rule 8D and Payment of compensation being allegedly not allowable as deduction u/s 28 to 44DA - HELD THAT:- AO has made disallowance which stands deleted by the CIT(A). Since the issue has already been examined by the AO, adjudicated by the Ld. CIT(A), the same issue cannot be again taken up the PCIT u/s 263. Further, disallowance u/s 14A cannot be made for investments made in partnership firm and the profit earned thereof. Even on merits, we find no prejudice is caused to the Revenue and hence the order of the Ld. PCIT on this issue cannot be upheld.
Compensation paid - PCIT held that assessee had neither disallowed such expense nor the Assessing Officer had verified the expense as it is not allowable within the provisions of section 28 to 44DA - Compensation expenses paid in year under consideration is on account of contractual payment and not on account of any violation of any law and hence, no disallowance in this regard is warranted under the provisions of the Act.
Since no disallowance is warranted as enumerated above, the assessment order passed u/s 143(3) of the Act by Assessing Officer can neither be held as 'erroneous' nor 'prejudicial or fatal to the interest of revenue'. We find that the AO has also examined the issue during the assessment proceedings as found in the notice issued u/s 142(1). Therefore, twin pre-conditions to assume revisionary jurisdiction u/s 263 of the Act are not satisfied in the issue on hand.
Appeal of the assessee is allowed.
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2025 (2) TMI 918
Ex-parte order - non-compliance to the hearing notices issued - HELD THAT:- CIT(A) proceeded to pass impugned order on 03.12.2024 ex-parte, even before the time for furnishing response by the assessee has not expired. Moreover, we find notices of hearing sent from Office of the First Appellate Authority was not sent to e-mail ID shown in Form No.35. Therefore, there was non-compliance to the hearing notices issued from the Office of First Appellate Authority, which had resulted in ex-parte order.
Denial of concessional rate of tax at 22% as per provisions of section 115BAA - delay in filing Form 10-IC - HELD THAT:- CBDT in its Circular No.6 of 2022 dated 17.03.2022 had stated that delay in filing Form No.10-IC, as per Rule 21AE of the Rules for the previous year relevant to AY 2020-21 is condoned in cases where following conditions are satisfied:-
i) The return of income for AY 2020-21 has been filed on or before the due date specified u/s. 139(1) of the Act;
ii) The assessee company has opted for taxation u/s/115BAA of the Act in (e) of ‘Filing Status’ in Part A-‘GEN’ of the Form of Return of Income ITR-6; and
iii) Form 10-IC is filed electronically on or before 30.06.2022 or 3 months from the end of the month in which this Circular is issued, whichever is later.”
As assessee had satisfied all the aforesaid three conditions mentioned in the Board’s Circular No.6 of 2022 dated 17.03.2022. In view of the assessee satisfying all the three conditions mentioned above, delay in filing Form 10-IC stands condoned and accordingly, the assessee would be entitled to be taxed at concessional rate of tax at 22% as per provisions of section 115BAA - Appeal filed by the assessee is allowed.
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2025 (2) TMI 917
Penalty order u/s 271AAB - Disclosure made in search proceedings - DR held that in case there was no search, no disclosure would have been made and a similar mention is also made in the assessment order - AR re-emphasized the fact that the assessee had voluntarily disclosed the income and the income was not represented by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other transactions found in the course of search - HELD THAT:- As gone through the statement of Poonam Mohta recorded on 08.05.2015, produced in the course of proceeding before us and a perusal of the same shows that though certain valuables were found in the locker of the assessee however, the assessee had not made any disclosure in the statement recorded while the locker no. 932A was subjected to search and seizure on 08.05.2020.
Hence, as the disclosure did not relate to the finding of the search and was made suo motu and though the Ld. AO has referred to certain seized documents in the penalty order, but he has not corelated how the disclosure of Rs. 50 lakhs had any reference to the seized documents; therefore, the disclosure could not be treated as undisclosed income for the purpose of imposition of penalty u/s 271AAB and the penalty imposed is liable to be cancelled. Hence, Ground No. 1 is allowed and the penalty is hereby cancelled.
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2025 (2) TMI 916
Addition made on account of short deduction of TDS - payments were made to M/s Steel Authority for supply of railways tracks in terms of contracts or for purchase of goods - CIT(A) deleted addition - HELD THAT:- We are in agreement of the finding of the Ld. CIT(A) that no liability for deduction of tax arises in respect of the contract related to supply of the material. As there is no provision of the Act that mandates for deduction of tax on the payment made for supply of material during the relevant year, we hold accordingly.
However, in respect of the short deduction of deduction and interest, it is the case of the assessee that short deduction was due to exclusion of the service tax component as per the CBDT Circular.
This fact is required to be verified at the end of the assessing authority. Therefore, the impugned order on the short deduction of tax is set aside and the issue is restored to the AO who would verify from the accounts of the assessee whether the short deduction was due to the exclusion of the service tax component and if so, same shall be decided in the light of the CBDT Circular No. 01/2014 dated 13.01.2014 (F.No 275/59/20124T(B). All the grounds of appeal of the Revenue are disposed off in the terms of the above.
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2025 (2) TMI 915
Validity of assessment u/s 153A - invalid approval u/s 153D - HELD THAT:- Violation of the mandatory provisions of section 153D of the Act which require the approval to be issued after application of mind to the assessment record and incriminating materials. We find that the case of the assessee is squarely covered on facts with the case relied by the learned DR in the case of Uttarkhand Uthan Samiti [2020 (4) TMI 878 - ITAT DELHI]. Further, it is now a settled provision of law that exercise of powers u/s 153D have to pass the scrutiny that the same were not exercised mechanically. The appeal of the assessee is allowed.
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2025 (2) TMI 914
Penalty levied u/s. 270A - under reporting of income - assessee didn’t file Form 68 before AO - assessee’s failure to explain on merits against disallowance/addition made in the assessment order - Pursuant to survey u/s. 133A return was selected for scrutiny and the AO made an addition - HELD THAT:- Since, the assessee offered Rs. 30 lakhs under PMGKY scheme, the net-assessed income was computed at Rs. 25,46,812/-. Pursuant thereto, assessee paid tax & interest within the period/time given in the assessment order/demand notice and thus it is an undisputed fact that the assessee has fulfilled conditions prescribed u/s. 270AA of the Act for claiming immunity from imposition of penalty.
Assessee has fulfilled both the conditions for grant of immunity as stipulated under clause (a) & (b) of sub-section (1) of section 270AA of the Act, which are substantive in nature except didn’t file Form 68 before AO. Therefore, in substance assessee was entitled for claiming immunity from imposition of penalty u/s. 270A of the Act. In this context, it has to be kept in mind that courts are meant to do substantial justice between the parties, and that technical rules or procedure should not be given precedence over doing substantial justice.
Undoubtedly, justice according to the law, doesn’t merely mean technical justice, but means that law is to be administered to advance justice [refer the decision Pankaj Bhai Rameshbhai Zalavadiya v. Jethabhai Kalabhai Zalavadiya [2017 (10) TMI 1397 - SUPREME COURT]]. In the given factual background, according to us, non-filing of Form 68 is only a technical or venial breach which should not snatch away the substantive right to claim immunity from levy of penalty, which assessee got vested with on fulfillment of substantive conditions mandated in Clause (a) & (b) of sub-section (1) of section u/s. 270AA of the Act.
Thus no penalty ought to have been levied u/s. 270A of the Act for under-reporting of income - Decided in favour of assessee.
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2025 (2) TMI 913
TDS u/s 194H - disallowance of discount extended to prepaid distributors u/s. 40(a)(i) - assessee has paid sum to its various distributors of prepaid SIM cards/recharge coupons as amount represents the difference between MRP of the talk time and prepaid connections and the price at which these are transferred to pre-paid distributors and discount in nature - HELD THAT:- Whether TDS is to be deducted by the cellular mobile services company on the discount given to distributor has now been settled by the decision of Bharti Cellular Ltd [2024 (3) TMI 41 - SUPREME COURT] wherein as held that Section 194H of the Act is not applicable in respect of payment made by the distributor/franchise - Thus, disallowances made by AO is not sustainable. The ground of appeal is accordingly allowed.
Disallowance of year-end accruals u/s. 40(a)(ia) - AO has disallowed the year end provision debited on the last day of accounting - HELD THAT:- Provision has been reversed and credited back on the next day and such expenditure has been debited on the basis of actual bill and TDS deducted, wherever applicable in the next financial year. We find that the issue whether TDS is to be deducted on year-end provisions which is reversed on the first day of the subsequent year has been decided in the case of Subex Ltd. [2023 (1) TMI 778 - KARNATAKA HIGH COURT] held if no income is attributable to the payee there is no liability to deduct tax at source in the hands of the tax deductor. The existence or absence of entries in the books of accounts is not decisive or conclusive factor in deciding the right of the assessee claiming deduction. See KEDARNATH JUTE MANUFACTURING COMPANY LIMITED [1971 (8) TMI 10 - SUPREME COURT] - Decided in favour of assessee.
Nature of expenses - Disallowance of club expenses - AO has made disallowance of entry fee/subscription charges paid by the assessee on the ground that the said expenditure is capital expenditure - HELD THAT:- The assessee has incurred club expenses and claimed as revenue expenditure. The A.O without examining the nature of expenditure has held it capital expenditure.
As decided in the case Ingersoll-Rand India Ltd. [2020 (4) TMI 550 - KARNATAKA HIGH COURT] has held that expenditure spend on club expenses are revenue in nature. Respectfully following the decision of Hon’ble Karnataka High Court, supra, the addition made on disallowance of club expenses is deleted. The ground of appeal is accordingly deleted.
Appeal filed by the assessee is allowed.
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2025 (2) TMI 912
Rejection of application for registration u/s 12AA - Assessee trust was required to file application under clause (iii) of section 12A(1)(ac) of the IT Act but due to inadvertent error the application was filed under clause (vi) of section 12A(1)(ac) - assessee is a non-profit company registered u/s 8 of Companies Act -
HELD THAT:- As relying on Raj Krishan Jain Charitable Trust [2024 (6) TMI 1400 - ITAT DELHI] and in the light of the circular no 7/2024 issued by CBDT on 25-04-2024, i.e. after the filing of application by the assessee wherein the issue of mentioning wrong section code has been addressed / considered as a common & frequent error and also observing the fact that in the instant case CIT, Exemption, Pune has not given any adverse finding on merits of the case, against the assessee, accordingly considering the totality of facts of the case and in the interest of justice we deem it fit to set-aside the order passed by Ld. CIT, Exemption, Pune and direct him to treat the application already filed by the assessee as under clause (iii) of section 12A(1)(ac) of the IT Act instead of under clause (vi) of section 12A(1)(ac) of the IT Act and decide the same as per fact and law after providing reasonable opportunity of hearing to the assessee. Appeal filed by the assessee is allowed for statistical purposes.
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2025 (2) TMI 891
Reopening of assessment - Period of limitation - Bogus purchases - HELD THAT:- Admittedly, as per facts of the case, dates of the notices issued and the decision in the case of Kachrulal Jitendra Kuma [2025 (2) TMI 865 - ITAT RAIPUR] we find that the issue in the present case is squarely covered in favour of the assessee.
Evidently, under the facts and circumstances of the present case, the notice u/s 148 (under new regime) was issued on 29.06.2022, whereas the same was required to be issued on or before 23.06.2022, therefore, it can be safely held that the notice u/s 148 (new regime) was issued belatedly beyond the limitation provided in the Act, which was further extended in terms of judgment of Ashish Agrawal [2022 (5) TMI 240 - SUPREME COURT] In view of such facts, the assessment framed on the basis of a notice u/s 148 (new regime) dated 29.06.2022, which is barred by limitation, thus, is rendered as bad in law, therefore, stands quashed.
As the impugned assessment for AY 2014-15 in the instant case has been rendered as quashed for the want of valid assumption of jurisdiction by the Ld. AO, therefore, we refrain to deliberate upon and to deal with the other contentions raised by the assessee qua the impugned addition made by the Ld. AO and to the extent sustained by the Ld. CIT(A), thus, the same is left open.
Assessment for the want of valid assumption of jurisdiction by the Ld. AO quashed, therefore, the issues raised by the revenue become infructuous, accordingly, the appeal of the revenue stands dismissed.
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2025 (2) TMI 875
Revision u/s 263 - additions on account of notional rent under the head ‘income from house property’ - reopening is sought to be done beyond the period of 4 years from the end of the relevant assessment year.
HELD THAT:- The issues raised in the reasons recorded for reopening are identical to the reasons for which revisional proceedings u/s 263 were initiated by the PCIT. The said revisional order under Section 263 of the Act was passed directing the assessing officer to examine the issues raised in the revisional proceedings and pass a fresh order.
Therefore, on the same ground the assessing officer is not justified to reopen the case, moreso, after a period of 4 years. In our view, even the approving authority should not have given his approval after he himself having passed the order under Section 263. Therefore, even on this ground since the issues were subject matter of 263 proceedings, the impugned proceedings are barred by 3rd proviso of Section 147 of the Act.
The reasons recorded initially states that there has been no disclosure of material facts necessary in the assessment but, what were the material facts which were not disclosed has not been stated. On perusal of the reasons recorded it is observed that the officer himself has recorded that it is based on the perusal of records and verification of records that reopening proceedings are initiated. In our view, on this ground also the pre-condition required of failure to disclose truly and material facts necessary for the assessment is not satisfied and therefore, the proceedings are bad in law as per the proviso of Section 147 of the Act.
In the order rejecting the objections, the officer states that the reopening is permissible if in the original assessment the Assessing Officer has through inadvertence oversight given relief.
If that be the case, then, certainly no proceedings could have been initiated by the respondent by virtue of first proviso to Section 147 of the Act because according to the respondent, it is the mistake of the predecessor Officer and, therefore, the issue of any failure to disclose fully and truly all necessary facts for the assessment by the petitioner would not arise. In any case, pursuant to the direction under Section 263 of the Act, the Assessing Officer examined all the issues which are also subject matter of the present proceedings and passed the assessment order on 14 December 2018.
Therefore, any attempt now to re-agitate the issues which were already examined while passing the assessment order pursuant to directions in 263 proceedings would be based on change of opinion and review of the earlier order which is not permissible. Decided in favour of assessee.
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2025 (2) TMI 874
Validity of reopening of assessment proceedings - denial of principle of natural justice - despite the reply having being filed within the statutory period of seven (7) days, AO proceeded to pass an order u/s 148A (d) without considering the reply so filed by the petitioner - HELD THAT:- Revenue fairly states that the petitioner may be given one more opportunity to respond to the notice dated 21.08.2024.
The impugned order passed u/s 148A (d) as well as the notice issued u/s 148 are set aside. AO shall consider the reply already filed by the petitioner and pass an appropriate order within a period of four weeks.
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2025 (2) TMI 873
Claim of Unconditional stay on the proclamation and sale of the immovable property of which the Petitioner is the joint owner - HELD THAT:- The conduct of the Petitioner is important. The fact that the Petitioner or the Company are unwilling to pay any taxes, though the tax demands have attained finality, is also relevant. The fact that none of the foundational orders are challenged is important. The fact that no severe financial hardships are pleaded or urged is also important.
In the case of Dunlop India Ltd and Others [1984 (11) TMI 63 - SUPREME COURT (LB)] has held that in fiscal matters, there is no justification for granting unconditional interim reliefs merely upon the Petitioner making out a prima facie case. The aspects of balance of convenience must also be considered. Here, assuming that a prima facie arguable case is made out, still, the balance of convenience does not favour grant of an unconditional stay.
We are satisfied that the ad interim orders granted earlier can be confirmed if the Petitioner deposits 50% of the demanded amount with the Respondents within eight weeks of today. If no such deposit is made within eight weeks of today, this interim order will stand vacated without further reference to this Court. We order accordingly.
We clarify that this interim order only restrains the Respondents from selling the attached property. Based on this interim relief, the Petitioner must not deal with the attached property or otherwise sell, transfer, convey, or create any third-party rights in it.
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2025 (2) TMI 872
Penalty u/s 270A - HELD THAT:- This is not a case where the Assessing Officer, after being conscious of the institution of the Appeal, has nevertheless deemed it appropriate to exercise the powers u/s 275(1)(a). AO has only observed that since the ITBA data did not reflect the institution of the quantum Appeal, the Assessing Officer felt that he had no alternative but to impose a penalty.
Thus, this is not a case where the penalty was imposed after independent application of mind. The main grounds for imposing the penalty were because the AO felt that he had no alternative but to impose the penalty in the absence of the ITBA portal, reflecting the institution of the quantum Appeal by the Petitioner.
Petitioner had pointed out that the quantum Appeal was indeed instituted. The Petitioner also produced the acknowledgment receipt evidencing the institution of the quantum Appeal. Because of a technical glitch, if this institution was not being reflected on the ITBA portal, no penalty should have been imposed by holding that the AO had no alternative but to impose a penalty.
We quash and set aside the impugned penalty order. However, we clarify that the quashing of this order will not preclude the Respondents from initiating fresh proceedings for the imposition of penalty should they so desire upon the disposal of the Petitioner’s quantum Appeal before the Commissioner (Appeals).
Based upon this statement, the Petitioner’s Appeal against the penalty order before the Commissioner (A) is disposed of as withdrawn. Mr Jain states that this order will be placed before the Commissioner (Appeals) within 15 days from today so that the Appeals can be shown as disposed of for statistical purposes.
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2025 (2) TMI 871
Reopening of assessment u/s 147 - failure to disclose all material facts necessary for assessment - HELD THAT:- No fresh tangible material could be said to have come to the knowledge of the assessing officer for reopening of the assessment.
Admittedly, the Petitioner’s case was selected for scrutiny, and several queries were raised. In particular, the queries were raised regarding the claims u/s 35AC and deductions u/s 80G of the IT Act. Upon considering the Petitioner’s response, these claims were allowed in the assessment order u/s 143 (3) of the IT Act.
Though, this was a case of reopening within 4 years, still, in the absence of any fresh tangible material coming to the knowledge of the assessing officer, reopening of the assessment only on re-examination of the very same material based on which the original assessment order was passed cannot be permitted.
In this case, the Petitioner has not claimed any benefits under Section 37. Petitioner has, however, claimed deductions under Section 35AC. No provision was shown to us based on which we could infer that such a deduction could not, at least prima facie, be claimed. On the contrary, Mr Kamdar referred us to the statement of objects and reasons accompanying the Finance (No. 2) Bill, 2014 by which these amendments were introduced.
In any event, we do not propose to go into the merits of the matter. This Petition must be allowed because there was no tangible fresh material based upon which the AO could have reason to believe that any income had escaped assessment. This is, as noted earlier, a scrutiny case where several queries, including queries particular to this issue, had been raised. The queries were answered by the Petitioners, and upon consideration of all these materials, an assessment order was made u/s 143 (3) of the IT Act.
On the ground that some other view was possible, the AO could not have changed his earlier opinion and, based upon such change of opinion, issued the impugned notice seeking to reopen the assessment. For all these reasons, the impugned notice and the consequential orders will have to be set aside.
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2025 (2) TMI 870
Validity of reassessment proceedings on the basis of a search action u/s 132 - HELD THAT:- As in the event any incriminating material is found during the search, the Revenue necessarily would be required to take recourse to the provisions of Section 153A and in the event no incriminating material found during the search, then the power of the Revenue to have the reassessment u/s 147/148 stands saved, failing which, the Revenue would be left without remedy.
Rajasthan High Court in Shyam Sunder Khandelwal s/o. Late Damodar Lal Khandelwal [2024 (4) TMI 196 - RAJASTHAN HIGH COURT] also had taken a similar view when the issue which had arisen before the Court was in regard to the notice issued u/s 148 the basis of issuance of such notice was the material seized during search. The contention of the assessee was to the effect that in the said circumstances, the proceedings ought to have been initiated u/s 153C. The Division Bench referring to the decision of Supreme Court in Abhisar Buildwell P. Ltd. [2023 (4) TMI 1056 - SUPREME COURT] as also the decision of Sri Dinakara Suvarna [2022 (7) TMI 800 - KARNATAKA HIGH COURT] allowed the petitions observing that the department had not set up a case, that for initiating proceedings under Section 148, it had material other than the material seized during the search of a related party.
We are of the clear opinion that the foundation of the present case was certainly a search action which was undertaken by the Revenue against one Shilpi Jewellers Pvt. Ltd. and in such search and seizure action, materials were seized and such materials were further explored and enquired. Such enquiry revealed significant information in regard to M/s. Green Valley Gems Pvt. Ltd., which according to the Revenue had provided accommodation entries to the petitioner, in which it was also revealed that Green Valley Gems Pvt. Ltd. was a shell company. We do not find that the record would indicate something which is not on the basis of such new materials gathered under the search and seizure action under Section 132.
There cannot be any doubt on the position in law when the Revenue intends to proceed purely on materials relevant for an action under Section 148 r.w.s. 147. The provisions of Sections 147, 148 vis-a-vis Section 153A and Section 153 are quite compartmentalized. To avoid any overlapping of these provisions, the legislature in its wisdom has thought it appropriate to provide for an independent effect, to be given u/s 153A r.w.s. 153C by incorporating the “non-obstante” clause, in these provisions, which carves out an exception to any normal/regular action being resorted u/s 147.
We are of the clear opinion that the impugned notice u/s 147 and all actions consequent thereto are required to be held to be without jurisdiction and bad in law. The petition is accordingly allowed in terms of prayer clauses (a) and (b).
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