2023 (10) TMI 1234 - AT - Income Tax

Assessment u/s 153C - unexplained cash credit u/s 68 - limitation period of six years - HELD THAT - As considering this admitted factual position, respectfully following the judgment of Jasjit Singh 2023 (10) TMI 572 - SUPREME COURT we hold that the assessment year 2006-07 would fall beyond six years as contemplated by the law. Therefore, we set aside the impugned assessment order being bad in law. Decided in favour of assessee.

Summary

Issues Involved:
The judgment involves issues related to the addition of unexplained cash credit u/s 68 of the Income Tax Act, 1961, jurisdiction u/s 153C, quashing of proceedings initiated u/s 153C, and assessment order validity u/s 153C.

Issue 1: Addition of Unexplained Cash Credit u/s 68:
The Revenue appealed the allowance of the appeal of the assessee regarding the addition of Rs. 3,18,00,000 made on account of unexplained cash credit u/s 68 of the Income Tax Act, 1961. The Revenue contended that the addition was not based on seized documents and Circular No. 24 of the CBDT was not applicable. The issue was whether the CIT(A) erred in not deciding the issue on the merits of the case.

Judgment:
The Tribunal held that the assessment year 2006-07 fell beyond six years as contemplated by the law u/s 153C. Consequently, the impugned assessment order was set aside as being bad in law. The additional ground raised by the assessee in its cross objection was allowed, rendering the Revenue's appeal dismissed.

Issue 2: Jurisdiction u/s 153C:
The assessee raised objections regarding the assumption of jurisdiction u/s 153C, contending that it was not in accordance with the law. The objections included the absence of a satisfaction note by the AO of the searched person, making the proceedings initiated u/s 153C ab-initio void.

Judgment:
The Tribunal held that the proceedings initiated u/s 153C were beyond the time limit as per the law. The impugned assessment order was set aside as being bad in law. The additional ground raised by the assessee in its cross objection was allowed, leading to the dismissal of the Revenue's appeal.

Issue 3: Quashing of Proceedings Initiated u/s 153C:
The assessee sought to quash the proceedings initiated u/s 153C on various legal points, including the failure to meet other mandatory conditions in accordance with the law.

Judgment:
The Tribunal held that the impugned assessment order was beyond the time limit as per the law u/s 153C. Consequently, the assessment order was set aside as being bad in law. The additional ground raised by the assessee in its cross objection was allowed, resulting in the dismissal of the Revenue's appeal.

Issue 4: Assessment Order Validity u/s 153C:
The assessee challenged the validity of the impugned assessment order on the grounds that the assumption of jurisdiction u/s 153C was not in accordance with the law and that the assessment year in question was beyond the block period.

Judgment:
The Tribunal held that the assessment year 2006-07 exceeded the six-year limit as per u/s 153C. Therefore, the impugned assessment order was set aside as being bad in law. The additional ground raised by the assessee in its cross objection was allowed, leading to the dismissal of the Revenue's appeal.

This judgment by the Appellate Tribunal ITAT DELHI addressed various legal issues concerning the Income Tax Act, 1961, specifically focusing on the addition of unexplained cash credit, jurisdiction u/s 153C, and the validity of the assessment order.