2019 (5) TMI 1503 - AT - Income Tax

Assessment u/s 153C - non-issuance of notice u/s 143(2)/142(1) and not supplying the seized the material u/s 153C - Revision u/s 263 unchallenged - HELD THAT - Since the assessee failed to challenge the order u/s 263 of the Act, therefore, non-issuance of notice u/s 143(2)/142(1) and not supplying the seized the material u/s 153C of the Act has no consequences being the order passed by AO has already been set aside by Commissioner by virtue of order dated 04.03.2017 wherein the Commissioner has invoked the provisions u/s 263. Further, we noticed that the AO accorded the opportunity of being heard to the assessee by virtue of notice dated 01.03.2016 which has been mentioned in para no. 7 of the assessment order. We also noticed that the assessee nowhere represented before the AO seeking any legal relief. CIT(A) has rightly recorded the finding on the legal issue which is not liable to be interfere with at this appellate stage. Accordingly, this issue is decided in favour of the revenue against the assessee. Unexplained cash credit u/s 68 - HELD THAT - It is not in dispute that the amount in sum of ₹ 2,34,52,668/- was credited with the account of the assessee. The assessee nowhere explained the said amount before the AO as well as before the CIT(A). It is incumbent upon the assessee to prove his claim by adducing the sufficient evidence on record. The assessee nowhere produced any cogent and convincing evidence on the file even before us. The facts are not distinguishable at this stage also. We find no ground to interfere with the finding of the CIT(A) on the issues, therefore, we confirm the finding of the CIT(A) on these issues and decide these issues in favour of the revenue against the assessee.

Summary

Issues Involved:
1. Violation of Natural Justice
2. Addition of ?2,34,52,668/- as Unexplained Cash Credit
3. Addition of ?1,55,000/- as income as per 26AS

Detailed Analysis:

Issue No. 1 & 2: Violation of Natural Justice

The assessee contended that the CIT(A) upheld the assessment order passed by the AO without issuing any notice under sections 143(2) or 142(1) and without providing a copy of the seized material on which the notice under section 153C was issued. The assessee also argued that the AO relied on the assessment of another assessee, JIK Industries Pvt. Ltd., without providing a copy of the order or an opportunity for cross-examination, thus violating the principles of natural justice.

The Tribunal noted that the order passed under section 144/142(1) read with section 153C had already been set aside by the Commissioner of Income Tax under section 263. Since the assessee did not challenge the order under section 263, the non-issuance of notice under sections 143(2)/142(1) and the non-supply of seized material under section 153C had no consequences. The AO had provided an opportunity to the assessee by issuing a notice dated 01.03.2016, but the assessee failed to appear or provide evidence. The Tribunal upheld the CIT(A)'s findings, deciding this issue in favor of the revenue.

Issue No. 3, 4 & 5: Addition of ?2,34,52,668/- as Unexplained Cash Credit

The assessee challenged the addition of ?2,34,52,668/- as unexplained cash credit under section 68. The AO observed that the total credits in the assessee's HDFC bank account for the financial year 2005-06 amounted to ?2,44,29,863/-, which were withdrawn immediately after deposit. Initially, the AO treated the deposits as commission income, but under section 263, the entire deposit amount was added as unexplained cash credit.

The Tribunal noted that the assessee did not produce any documents or evidence to substantiate its claim before the AO or CIT(A). The CIT(A) found that the assessee did not appeal against the section 263 order and had not provided any explanation for the deposits. The Tribunal upheld the CIT(A)'s findings, confirming the addition as unexplained cash credit and deciding the issue in favor of the revenue.

Issue No. 6: Addition of ?1,55,000/- as income as per 26AS

The assessee challenged the addition of ?1,55,000/- as per the 26AS statement, arguing that the amount was reflected in the bank statement and books of the assessee, leading to double taxation. The CIT(A) noted that the assessee did not make any submission regarding this ground during the appellate proceedings, concluding that the issue was not pressed.

The Tribunal observed that the assessee did not press this issue before them either and did not provide any supporting evidence. Consequently, the Tribunal confirmed the CIT(A)'s findings and decided this issue in favor of the revenue.

Conclusion:

The Tribunal dismissed all the appeals filed by the assessee, upholding the findings of the CIT(A) on all issues. The decisions were consistent across all the assessment years involved, leading to the dismissal of the appeals on similar grounds. The order was pronounced in the open court on 23/05/2019.