2015 (8) TMI 78 - AT - Income Tax

Substantive addition to the income u/s 158BC r.w.s. 158BD - Assessee an individual is a doctor by profession - Allegation that assessee has received substantial amount of consultation fee from the hospital - Protective assessment - Held that - material gathered behind the assessee could not be used by the AO to make addition to the income of the assessee - The assessee had denied to have received professional fees from the hospital and based on the submissions of the assessee the AO had made addition to the income of DTHL. In our, opinion, considering the peculiar facts and circumstances of the case the FAA was not justified in confirming the addition for the AY.s. concerned. For the AY. 1995-96 addition was made by the AO on substantive basis. During the course of hearing before us, the AR stated that considering the smallness of tax effect he would not like to press the issue. Therefore, we confirm the addition made by the AO for the AY.1995-96. - Decided partly in favour of assessee.

Issues:
1. Validity of assessment order u/s 158BC(c)/144
2. Jurisdiction of Assessing Officer below specified rank
3. Legality and validity of notices issued
4. Lack of evidence in seized documents
5. Assessment of undisclosed income on protective basis
6. Assessment of undisclosed income on substantive basis
7. Gross professional receipts computation accuracy

Issue 1: Validity of assessment order u/s 158BC(c)/144
The appellant challenged the order confirming the assessment under section 158BC(c)/144 of the Income-tax Act, 1961. The appellant argued that the assessment was bad in law and fact. The grounds of appeal included errors in law and jurisdiction, questioning the validity of the assessment order.

Issue 2: Jurisdiction of Assessing Officer below specified rank
The appellant contended that the Assessing Officer who initiated the proceedings was below the specified rank for Chapter XIV-B, rendering the assessment void ab initio. The appellant argued that the proceedings were invalid due to the authority's rank and issuance of notices beyond their jurisdiction.

Issue 3: Legality and validity of notices issued
The appellant challenged the legality and validity of notices issued by different authorities, questioning the basis for assessing undisclosed income in their hands. The appellant raised concerns about the legality of the letters and notices issued, alleging procedural irregularities and lack of jurisdiction.

Issue 4: Lack of evidence in seized documents
The appellant argued that the seized documents did not contain evidence to prove the appellant received specific amounts mentioned in the assessment order. The appellant contended that the Assessing Officer failed to provide corroborative evidence supporting the assessment of undisclosed income.

Issue 5: Assessment of undisclosed income on protective basis
The appellant objected to the assessment of undisclosed income on a protective basis for certain assessment years. The appellant argued that the assessment was not supported by sufficient evidence and that the amounts were previously deleted in the hands of the searched person due to procedural violations.

Issue 6: Assessment of undisclosed income on substantive basis
The appellant contested the assessment of undisclosed income on a substantive basis for a specific assessment year. The appellant raised concerns about the justification for assessing the income and argued against the validity of the assessment made for that year.

Issue 7: Gross professional receipts computation accuracy
The appellant disputed the accuracy of the computation of gross professional receipts, highlighting discrepancies and uncertainties in the assessment. The appellant argued that the assessment based on uncorroborated figures should be deleted due to the lack of reliable evidence.

In conclusion, the Tribunal partially allowed the appeals filed by the appellant, addressing various issues related to the validity of the assessment orders, jurisdictional concerns, procedural irregularities, lack of evidence, and accuracy of income computations. The Tribunal directed a fresh adjudication for certain assessment years and confirmed or allowed the appeals in part for other issues raised by the appellant.

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