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2024 (10) TMI 75 - AT - Income TaxLegality of proceedings due to non-communication of case transfer u/s 127 - main contention that no information about change of incumbent was communicated to the assessee, thereby, the assessee has been deprived from exercising his right to be reheard conferred by the proviso to section 129 - HELD THAT - We find that this ground is raised without prejudice to the additional ground No. 1 2. In the aforementioned paragraphs, we held that there is no applicability of section 127 of the Act to the facts of the present case and the assessment proceedings are valid under law. Against the second additional ground, we held that the notice u/s 143(2) of the Act is not barred by limitation. We hold that there is nothing remain for the additional ground raised by the ld. AR as there is no significance for the reason that the assessee participated in the assessment proceedings through his authorized representative, which is evident from para 2 of the assessment order. Therefore, the contention of the ld. AR that the notice under section 143(2) r.w.s. 129 does not contain any information about change of incumbent, is not justified. Thus, the additional ground raised by the ld. AR on behalf of the assessee is dismissed. Action of the CIT(A) in not deciding the validity of revised return filed on 05.03.2014 - DR submits that the AO issued notice u/s 143(2) of the Act is with reference to the revised return of income and argued that the AO conducted the assessment proceedings based on the revised return of income as filed by the assessee - HELD THAT - CIT(A) containing gist of arguments an assessment based on non-est return of income , whereas, the impugned order was passed on 28.12.2018. On a careful examination of the same, we find no indication proof of receipt, filed, any sign of Office of the CIT(A), therefore, we hold that there was nothing before the ld. CIT(A) to decide the issue an assessment based on non-est return of income . Be that as it may, the assessee contended that the entire assessment proceeding is illegal in the eye of the law for not informing about the transfer of case from one jurisdiction to another jurisdiction as per section 127 of the Act in first additional ground. We discussed the said additional ground in the aforementioned paragraphs, where we held that the provisions of the section 127 of the Act are not applicable and held the entire assessment proceedings are valid under law. Therefore, since, we held that assessment proceedings are valid under law, again remanding the matter to the file of the CIT(A) on the issue of deciding as to whether the assessment proceedings made under revised return of income is valid or not does not arise. Therefore, in view of our decision in additional ground No. 1, we find no force in the argument of the ld. AR in remanding the matter to the file of the ld. CIT(A) Thus, ground No. 2 raised by the assessee fails and it is dismissed. Validity of exercise of re-drawing cash book - Tribunal in assessee s own case for AY 2008-09 to 2012-13 held that no explanation was offered by the assessee, failed to discharge the burden to prove the source of income of the assessee and confirmed the order of the AO in computing the unexplained income by redrawing the cash book and peak value of the credit, which was arrived after due credit for the amount of cash withdrawn from the bank. On an examination of the assessment order, we find that the AO adopted the same method as it was adopted in AYs 2008-09 to 2012-13, which is clear from the assessment order. AR did not bring on record any view contrary to the view taken by the ITAT in assessee s own case for the AYs. 2008-09 to 2012-13. Thus, we find no infirmity in the order of the ld. CIT(A) in confirming the order of the Assessing Officer and accordingly, ground Nos. 3, 4 5 raised by the assessee are dismissed. Addition towards credit card payments - AO with AIR information found the assessee made credit card payments - AO added the same to the total income of the assessee for not producing any evidence in substantiating the payments - There was no evidence before the authorities below and even before us to substantiate the credit card payments, we find that the facts before the ITAT Delhi Bench are not similar to the facts on hand and thus, the Delhi Bench order in the case of Shivam Industries 2024 (2) TMI 1399 - ITAT DELHI is not applicable to the present case. Reliance of Mumbai Bench decision in the case of ANS Law Associates 2014 (12) TMI 1201 - ITAT MUMBAI , the Tribunal remanded the matter back to the file of the AO for his consideration afresh. We note that the AO made the addition solely on the basis of AIR information and the assessee, therein, denied the receipt of income from a particular source. It was contended that it is for the AO to prove that the assessee has received the income as the assessee cannot prove with evidence. We find the facts and circumstances in the said case are not similar to the facts of the present case and the finding of the ITAT Mumbai bench is not applicable to the facts on hand. Admittedly, there was no evidence before us to substantiate the credit card payments, except by placing reliance on case law as discussed herein above and thus, we find no infirmity in the order of the ld. CIT(A) and we agree with the reasons recorded by the ld. CIT(A). Appeal filed by the assessee is dismissed.
Issues Involved:
1. Legality of proceedings due to non-communication of case transfer under Section 127 of the Income Tax Act. 2. Validity of notice under Section 143(2) read with Section 129 due to alleged limitation. 3. Failure to inform the assessee about the change in the incumbent officer under Section 129. 4. Validity of the revised return filed on 05.03.2014. 5. Validity of the redrawn cash book and addition on account of unexplained investments using peak deficit balance. 6. Addition towards credit card payments. Detailed Analysis: 1. Legality of proceedings due to non-communication of case transfer under Section 127: The assessee argued that the entire proceedings were illegal as the transfer of the case from one jurisdiction to another was not communicated as required under Section 127 of the Income Tax Act. The written submissions cited the Supreme Court decision in Ajantha Industries, emphasizing the necessity of communicating the transfer order and reasons to the assessee. The Revenue countered that the transfer was within the same range and thus Section 127 was not applicable. The Tribunal agreed with the Revenue, noting that the transfer was due to a change in the monetary limit in the revised return, and dismissed the first additional ground raised by the assessee. 2. Validity of notice under Section 143(2) read with Section 129 due to alleged limitation: The assessee contended that the notice issued under Section 143(2) read with Section 129 was barred by limitation, as it was served after the expiry of six months from the end of the financial year in which the return was furnished. The Tribunal noted that the original notice under Section 143(2) was issued within the prescribed time limit, and the subsequent notice was merely a continuation of the original notice. Therefore, the argument of being time-barred was not acceptable, and the second additional ground was dismissed. 3. Failure to inform the assessee about the change in the incumbent officer under Section 129: The assessee argued that the notice under Section 143(2) read with Section 129 did not contain information about the change in the incumbent officer, depriving the assessee of the right to be reheard. The Tribunal observed that the assessee participated in the assessment proceedings through an authorized representative, and there was no significant impact due to the alleged non-communication. Thus, the third additional ground was dismissed. 4. Validity of the revised return filed on 05.03.2014: The assessee challenged the validity of the revised return filed on 05.03.2014, arguing that the CIT(A) did not adjudicate this issue. The Tribunal found no mention of this challenge in the grounds of appeal before the CIT(A) and noted that the assessment proceedings were conducted based on the revised return. Since the assessment proceedings were deemed valid, the Tribunal dismissed the ground challenging the validity of the revised return. 5. Validity of the redrawn cash book and addition on account of unexplained investments using peak deficit balance: The assessee contested the addition made on account of unexplained investments by redrawing the cash book and using the peak deficit balance method. The Tribunal referred to its previous decision in the assessee's own case for earlier assessment years, where similar contentions were raised and dismissed. The Tribunal found no infirmity in the method followed by the lower authorities and confirmed the addition, dismissing the related grounds raised by the assessee. 6. Addition towards credit card payments: The assessee challenged the addition of Rs. 7,52,550 towards credit card payments, arguing that the Assessing Officer did not reject the books of accounts and made the addition solely based on AIR information. The Tribunal noted that no evidence was provided to substantiate the credit card payments, and the case law cited by the assessee was not applicable to the facts of the case. Therefore, the Tribunal found no infirmity in the addition made by the Assessing Officer and confirmed by the CIT(A), dismissing the related ground. Conclusion: The appeal filed by the assessee was dismissed, with the Tribunal upholding the validity of the assessment proceedings, the method of computing unexplained investments, and the addition towards credit card payments. The Tribunal found no merit in the grounds raised by the assessee regarding the non-communication of case transfer, limitation of notice, and failure to inform about the change in the incumbent officer.
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