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2024 (7) TMI 837 - AT - Income TaxJurisdiction assumed by the A.O, i.e. DCIT, Circle-2(1), Bilaspur for framing of the assessment - Addition u/s 68 - receipt/payment account of the assessee trust revealed, viz. Ramayan a/c., Gujrati samaj a/c. and Kayam Punya Tithi fund - HELD THAT - On a perusal of the record, it transpires that the assessee after receiving notice u/s. 143(2) of the Act dated 23.09.2011 from the ITO, Ward-1(2), Bilaspur had failed to call in question his jurisdiction within the stipulated time period, i.e. one month from the date of service of the aforesaid notice. As the assessee trust had not objected to the notice issued by the ITO-1(2), Bilaspur dated 23.09.2011 (received on 28.09.2011) within the stipulated time period of 30 days as contemplated in Section 124(3) of the Act, therefore, it cannot be permitted to have questioned the validity of the jurisdiction in the course of the present proceedings now. Addition u/s 68 - A perusal of the summary of receipts as had been placed before me reveals the names of the donors a/w. their respective addresses/ telephone numbers wherein they had categorically stated that the contributions were being made by them with specific directions, i.e. lifelong bhandara on specific dates etc. As the complete details of the persons who had made contributions a/w. their respective addresses/telephone numbers is discernible from the summary of the receipts as had been filed before me, therefore, unable to concur with the view taken by the lower authorities that the amounts so received were in the nature of unexplained cash credit u/s. 68 - also we cannot remain oblivion of the fact that the aforesaid documents as were filed before me for the first time as additional evidence were not there before the lower authorities - restore the matter to the file of the A.O with a direction to verify the authenticity of the summary receipts, i.e. details of the contributors/donors and the copies of the copies of the receipts issued by the assessee trust. Validity of the notice issued u/s. 143(2) for the reason that the same was done prior to the intimation issued u/s. 143(1) - No substance in the same. The Hon'ble Apex Court in the case of CIT Vs. Gujarat Electricity Board, 2002 (10) TMI 5 - SUPREME COURT had held that an intimation issued u/s. 143(1) of the Act after issuance of notice u/s. 143(2) of the Act would be invalid. However, in a case where the processing of the return u/s. 143(1) of the Act is carried out subsequent to the notice issued u/s. 143(2) of the Act, then the same would not render the notice so issued as invalid. Accordingly, finding no infirmity in the view taken by the CIT(A) on the aforesaid issue, uphold the same.
Issues Involved:
1. Addition of Rs. 1,69,068/- towards corpus fund as income under Section 68. 2. Validity of the assessment order passed under Section 144 without addressing objections raised under Sections 143(2) and 142(1). 3. Jurisdictional validity of the notice issued under Section 143(2). 4. Issuance of notice under Section 143(2) before processing the return under Section 143(1). 5. Addition of Rs. 20,000/- included in Rs. 1,69,068/- as unexplained cash credit. Detailed Analysis: 1. Addition of Rs. 1,69,068/- towards corpus fund as income under Section 68: The assessee trust contended that the amount of Rs. 1,69,068/- was a corpus fund collection for specific purposes and not part of its income. The Assessing Officer (A.O) treated these amounts as unexplained cash credits under Section 68 of the Income-tax Act, 1961. The CIT(A) upheld the A.O's decision, stating that the trust failed to provide evidence from donors specifying the donations as corpus fund. The Tribunal, however, admitted additional evidence provided by the assessee and directed the A.O to verify the authenticity of the donors' details and receipts. If the assessee's claim is validated, the addition under Section 68 would be vacated. 2. Validity of the assessment order passed under Section 144 without addressing objections raised under Sections 143(2) and 142(1): The assessee argued that the A.O ignored objections raised regarding the notices under Sections 143(2) and 142(1). The CIT(A) dismissed this ground, stating that the assessee must produce evidence supporting its return of income and that objections to the notice should be addressed through a writ petition in the High Court. The Tribunal upheld the CIT(A)'s decision, noting that the assessee did not raise objections within the stipulated time frame. 3. Jurisdictional validity of the notice issued under Section 143(2): The assessee challenged the jurisdiction of the A.O, arguing that the initial notice under Section 143(2) was issued by an officer without jurisdiction. The Tribunal noted that the assessee failed to object to the jurisdiction within the stipulated time period of 30 days as required under Section 124(3). Therefore, the Tribunal dismissed the assessee's claim regarding the invalidity of the jurisdiction assumed by the A.O. 4. Issuance of notice under Section 143(2) before processing the return under Section 143(1): The assessee contended that the notice under Section 143(2) was issued before the processing of the return under Section 143(1), rendering the notice invalid. The Tribunal referred to the Supreme Court's decision in CIT Vs. Gujarat Electricity Board, which held that an intimation issued under Section 143(1) after a notice under Section 143(2) would be invalid. However, if the processing under Section 143(1) occurs after the notice under Section 143(2), it does not invalidate the notice. The Tribunal found no infirmity in the CIT(A)'s view and dismissed this ground of appeal. 5. Addition of Rs. 20,000/- included in Rs. 1,69,068/- as unexplained cash credit: The assessee argued that Rs. 20,000/- included in the total addition was a provision for payment towards electricity and maintenance expenses for Bhagwat Katha and not an unexplained cash credit. The Tribunal directed the A.O to verify the details provided by the assessee and, if found correct, to vacate the addition. Conclusion: The appeal of the assessee trust was partly allowed for statistical purposes. The Tribunal directed the A.O to verify the additional evidence provided by the assessee regarding the corpus fund and the specific directions of the donors. If the evidence is found to be in order, the addition under Section 68 will be vacated. The Tribunal upheld the validity of the notices issued under Sections 143(2) and 142(1) and dismissed the jurisdictional challenge and the contention regarding the timing of the notice under Section 143(2).
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