Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2023 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 204 - HC - Income TaxAssessment u/s 153A - ‘unexplained asset’ found in the course of search - assessee raised an objection as the AY 2011-12 was beyond the normal period of six assessment years and reopening of the ninth AY in terms of the fourth proviso to Section 153A of the Act was beyond jurisdiction - As argued contents of seized material are neither incriminating in nature nor do they in any manner reveal “income represented in form of ‘assets’ which had escaped assessment - HELD THAT:- We have no hesitation in holding that the AO did not have in his charge, any “Jurisdictional fact ”(on or prior to 05.12.2019) to invoke and issue notice u/s 153C of the Act to the respondent assessee. The extended jurisdiction to invoke/assess 7th to 10th AY is conferred on the AO by authority of law and the AO cannot confer to himself the jurisdiction in a casual manner by stating/substituting the specific jurisdictional fact. As imperative that before issuance of notice u/s 153C (for the extended period) the AO sets out his objective satisfaction from the seized material, the details of the specified/undisclosed assets in possession qua the assessee for AY 2011-12 valued at Rs. 50 lacs or more. If this essential requirement of law is not satisfied, the AO does not get the authority of law to invoke the jurisdiction u/s 153A of the Act for 7th to 10th AY. As assessee had disclosed the sale transactions and liquidation of shares in his regular books of accounts and the liquidation of shares were received in bank. Thus the aforementioned assets cannot be termed as undisclosed assets. It has been appositely concluded in the concurrent decisions of the CITA and ITAT that it cannot be held that the allegedly undisclosed assets have escaped assessment. Addition was on account of unexplained ‘cash credit’ represented by sale proceeds u/s 68 - The additions on account of unexplained ‘cash credit’, could not have been made by the AO, unless he initially made an addition of undisclosed ‘asset’ valued at Rs. 50 lacs or more. In this case, as there was no addition made by the AO on account of undisclosed assets, ex consequenti, an inference deserves to be drawn that there was no ‘jurisdictional fact’ for the AO to assume jurisdiction u/s 153C for AY 2011-12. The usurpation of jurisdiction u/s 153C of the Act is bad in law, for want of jurisdiction as the AO was precluded from making any other addition in the assessment for AY 2011-12. Therefore, the AO’s action of addition u/s 68 of the Act for the relevant AY 2011-12 is untenable in the eyes of law. As observed in Singhad Technical Education Society’s case [2017 (8) TMI 1298 - SUPREME COURT] that unless and until the AO establishes correlation between what has been seized from the searched person and how the same is incriminating in nature qua each of the assessment years in question for which jurisdiction u/s 153C is sought to be invoked for the other person (assessee in this case), then the notice u/s 153C to the assessee/third party qua the assessment year would be without satisfying the jurisdictional fact required to invoke Section 153C. As held by the ITAT that on the date of search the income tax assessment for AY 2011-12 of the assessee stood unabated. The concurrent decisions of both the CITA and the ITAT reflect that no incriminating materials were found during the search conducted by the AO. The pages 61 to 69 cannot be termed as undisclosed or unaccounted assets on the basis of the assessment order (Annexure-A). The addition to the income of the assessee u/s 68 of the IT Act for the relevant AY 2011-12 was found to be untenable in law.
|