TMI Blog2010 (12) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... cut ('CIT(A)' for short) for the block period commencing 1.4.1990 to 21.9.2000, the date of search. 2. The assessee's appeal contests its assessment vide order u/s. 158BC r/w s. 158BD of the Income-tax Act, 1961 [in short, 'the Act'] dated 30.11.2004; having been dismissed on the legal grounds, as also confirmed substantially on facts, by the first appellate authority. Vide its' legal grounds, the assessee impugns the validity of the block assessment proceedings in its case, questioning the issue of notice u/s. 158BD r/w s. 158 BC, both on the ground of absence of any material found in search relating the assessed undisclosed income or generally with regard to any source of income, as well on the basis that as she was a minor during some of the previous years for which the undisclosed income stands assessed. 3. A brief recount of the facts would be necessary before we could consider, issue wise, the merits of the assessee's case. A search u/s. 132 of the Act was conducted on 21.9.2000 at the business and residential premises of one, Shri K.P. Beeran (of M/s. Riyaz Jewellery, Kozhikode), the assessee's father. The documents seized thereat included a sale deed for the purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 158 BD read with section 158 BC of the Act, initiating assessment proceedings for the assessment of undisclosed income for the block period ending on that date, stood rightly issued on her. 4.3 As would be apparent from the foregoing, in our view, the assessee's legal ground merits admission; the primary facts on which the same is based being on record and, equally important, undisputed. As rightly pointed out by the assessee even before the Id. CIT(A), the fact of the assessee becoming a major on 7.1.2000 is borne out by the assessee's date of birth, which finds mention in the return of income in Form 2B as duly verified and filed by the assessee. As such, we are unable to subscribe to the view of the Id. CIT(A) that the decision in the case of NTPC (supra) would not apply, precluding the assessee from raising this ground before him. On the merits of the issue, the assessee was admittedly a major on the date of search, so that the assessment for the block period u/s. XIV-B of the Act had to be framed on her by the issue of notice in her name. The fact of the assessee being a minor for a part of the block period, and for which the assessee adverts to the mention of her date of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclosed to the Revenue, i.e., "undisclosed income', by definition. In the present case this satisfaction is impelling and manifest in the assessment order of the person searched. Reference in this context is drawn to the decision by the tribunal in the case of Subhan Javeed v. CIT (Asstt) [2010] 122 ITD 307 (Bang.). The satisfaction has only to be a prima facie one, and inferable to the said materials. Whether the same shall result in the assessment of undisclosed income or the assessee would furnish a satisfactory explanation with regard thereto, and which could again be so either for the whole or a part of the 'income' under reference, is a matter subsequent, which would depend on the relative merits of the case, and cannot decide the question of validity or otherwise of the issue of notice u/s. 158BD and, thus, of the initiation of the proceedings thereby, for which the sole criteria is the existence of a prima facie satisfaction on the part of the AO of the person searched, and which we have found as so. Reference in this context is made to the decision in the case of Harvey Heart Hospitals Ltd. v. Asstt. CIT [2010] 130 TTJ (Chennai) 700. This is trite law, and for which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee. We have carefully perused the same, and also examined the issue of its applicability in the facts and circumstances of the present case. The said decision clarifies that the word used in section 69 being 'may' and not 'shall', the deeming of unexplained income thereunder could not follow automatically or as a matter of course, i.e., whenever the assessee is found wanting in furnishing a satisfactory explanation with regard to the investment/s. That is, the same, or the non-satisfactory explanation, confers a jurisdiction on the AO, which is to be exercised judiciously, regard being made to all the surrounding facts and circumstances of the case. In that case, the assessment years being 1968-69 and 1969-70, all the authorities below were in agreement as to the unsatisfactory status of the assessee's explanation toward her investment/s. However, given the circumstances she was placed in, she could not have, by any stretch of imagination, even by working for a decade, earn the requisite amount being credited to her, so as to have made the impugned investment(s). In other words, the said decision stood based on the peculiar facts of the case, and rested on the tribunal' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s personal efforts. 5.4 Continuing further, we may also clarify; the law in the matter being trite, that the deeming provisions, viz., sections 68, 69, etc., only embody the salutary principles of common law jurisprudence and, further, once the condition(s) precedent for the application of the section(s) is met, the Assessing Officer is under no further obligation to show that the income is from a particular source or earned in a particular year. Reference in this context may be drawn to the decisions in the case of A. Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807 (SC); Kale Khan Mohammad Hanif v. CIT [1963] 50 ITR 1(SC); CIT v. Devi Prasad Vishwanath [1969] 72 ITR 194 (SC); Chuharmal v. CIT [1988] 172 ITR 256 (SC), to cite a few. 6. The next issue that we may address is the assessee's plea that the assessment of undisclosed income cannot be made on an estimate basis. Toward this, we find that there is in law no, and rather cannot be a, legal bar on the power of the AO to frame an assessment, which is plenary; the only requirement being that the same is to be based on relevant materials, and by drawing cogent inferences therefrom. True, its open to the assessee to contest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to the house warming expenses (Ground # 7), which stand assessed at Rs.50,000, as against nil by the assessee, we find the same stands not agitated by the assessee before the first appellate authority. There is neither any ground raised in its respect before him nor, therefore, any adjudication by him. Even before us, the assessee, whose case as we observe remains only of bald assertion/s, i.e., de hors any factual inputs, did not raise this issue at the time of hearing. Under the circumstances, we are unable to see as to how the same is maintainable before us. The assessee, we find, has relied on the decision in the case of Bima Singh v. CIT, 308 ITR 171 (Patna), to the effect that where the investment as disclosed, and as valued by the DVO, reflects a meager difference, there is no cause for making any addition. The reliance is misplaced, for the reason, as also observed earlier, the AO has adopted the value as furnished by the assessee itself, so that there is no addition on this account. 8. The assessee's next and last ground relates to the levy of surcharge on the assessed tax, which, again, stands not raised before the Id. CIT(A), though being legal, stands admit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
