9911796707
TMI Blog2024 (9) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... thority has a reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, it shall serve a notice on the assessee specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him to produce any evidence or particulars specified therein or on which the assessee may rely in support of such claim. Similarly, under Sub-section (2) of Section 143 of the Act, if Assessing Officer considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax, it shall serve on the assessee a notice either to attend his office or produce any evidence on which the assessee may rely in support of the return. This is notwithstanding anything contained in Clause (1). The power conferred upon the Assessing Authority under Sub-section (2) of Section 143 of the Act is statutory in character and cannot be tinkered with or taken away by any order or instruction issued by the CBDT in the exercise of the power conferred upon it under Section 119 of the Act, for, issuance of such order or direction would be tantamount to req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - on account of plant and machinery added by the assessee during the year under appeal. The Assessing Officer, thus, made a total addition of Rs. 20,28,855.00 (13,29,206 + 6,99,679). 4. Feeling dissatisfied and aggrieved by the assessment made by the Assessing Officer, the appellant filed an appeal before the Commissioner of Income Tax (Appeals), Jammu [ CIT (A) ] raising a plea that the assessment order was framed in violation of the CBDT guidelines and, therefore, null and void. The CIT (A) confirmed the assessment order and aforesaid additions made by the Assessing Officer vide order dated 14th July, 2008. The appellant took the matter before ITAT, Amritsar by way of an appeal registered as ITA No.478(ASR)/2008. Vide judgment and order impugned, the ITAT has dismissed the appeal and upheld the order of CIT (A), Jammu. It is this order the appellant is aggrieved of and is before us by way of instant appeal. 5. The impugned order of the ITAT is challenged by the appellant primarily on the ground that the CIT (A) as well as ITAT failed to appreciate that assumption of jurisdiction by the Income Tax Assessing Officer for framing an assessment order under Section 144 of the Act did n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that the explanation of assessee that he had previously acquired the assets on hire basis in order to run the business smoothly and to save cost, which were later on acquired by the assessee was rightly not accepted by the Assessing Officer as also by both the appellate authorities below. 9. Having heard learned counsel for the parties and perused the material on record, following two question of law arise for determination:- i) Whether ITAT erred in law in upholding the validity of jurisdiction assumed by the Assessing Officer to frame the assessment order under Section 144 of the Act? ii) Whether ITAT erred in law in upholding the addition of undisclosed investment on account of addition to fixed assets made by the assessee ? 10. Question No.(ii) framed herein above subsumes question No. B C framed by this Court while admitting the appeal for hearing vide order dated 23rd May, 2013. Question No.(i) 11. So far as question No. (i) is concerned, the plea of the appellant is that his case was picked up for compulsory scrutiny contrary to the CBDT guidelines and therefore, the assumption of jurisdiction by the Assessing officer to issue notice under Section 143 (2) of the Act a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CBDT laying down guidelines for income tax authorities for doing a particular thing in a particular manner are administrative in nature. Such circular/instructions of CBDT, though binding on the Assessing Officers, cannot be in derogation of the statutory provisions contained in Sections 143 and 144 of the Act. The CBDT circular in question only deals with cases where Assessing Officer is under an obligation to hold compulsory scrutiny to find out compliance with the provisions of the Act and Rules framed thereunder and to ensure that the income assessable to tax does not escape assessment. It is in the exercise of this power conferred upon the Assessing Officer under Sub-section (2) of Section 143 of the Act, appellant-assessee was put on notice with regard to additions made to the fixed assets from out of the undisclosed income. The Assessing Officer found that as per the balance sheet of the appellant as on 31st March, 2004, the assessee had disclosed to have purchased plant and machinery of the value of Rs. 21,58,400/- whereas in the schedule of fixed assets i.e. plant and machinery as on 01st April, 2004 an amount of Rs. 34,87,606/- was indicated. There was, thus, an incre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under Section 144 of the Act after following the procedure laid down in Section 143, in particular Sub-section (2) of Section 143 of the Act. 18. It is true that in the instant case, the case of the appellant was processed under Section 143 (2) in reference to paragraph 2 (q) of the guidelines issued for the financial year 2006-07, which, prima facie, was not applicable/attracted in the case of the appellant. However, for the reasons explained above, we are of the considered opinion that even if case of the appellant was not liable to compulsorily scrutiny in terms of the aforesaid clause of CBDT guidelines, yet the case of appellant squarely fell within the purview of Sub-section (2) of Section 143 of the Act. The Assessing Officer having noticed that certain income had escaped assessment was well within its power to issue notice under Sub-section (2) of Section 143 of the Act and proceed to frame assessment under Section 144 of the Act. The order of assessment framed under Section 144 of the Act by the Assessing Officer in the case of the appellant, therefore, cannot be found fault with. 19. The first appellate authority and the second appellate forum have rightly concurred wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the circular of CBDT in question issued for the financial year 2006-07. CBDT circular for the financial year 2006-07 only enumerates categories of returns which are required to be selected by the Assessing Officer compulsorily for detailed scrutiny. The scrutiny of other returns is in the discretion of the Assessing Authority governed by mandate of Section 143 and Section 144 of the Act. 24. At this stage, we would like to refer to the provisions of Section 119 of the Act, which confers upon CBDT power to issue such orders, instructions and directions to income tax authorities for proper administration of the Act providing further that all such persons employed in the execution of the Act shall observe and follow such orders, instructions and directions of the Board. The proviso first is very relevant and provides that no such order, instruction or order shall be issued by the CBDT so as to require an income tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or so as to interfere with the discretion of the Commissioner of Income Tax (Appeals) in the exercise of its appellate functions. The CBDT circulars are issued in the exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
